What is allocation by need

Allocation by need is an economic principle or system in which resources are distributed based on the needs of individuals, groups, or society as a whole. Unlike other allocation systems, such as allocation by market or allocation by merit, allocation by need prioritizes the satisfaction of essential needs over other criteria.

In an allocation by need system, resources are distributed according to the basic necessities of individuals or groups, such as food, shelter, healthcare, education, and other essential goods and services. The aim is to ensure that everyone's basic needs are met using available resources in a fair and equitable manner.

This principle is often associated with socialist or communist economic models, where the central planning authority or government is responsible for determining and fulfilling the needs of the population. The idea behind allocation by need is to reduce inequality, promote social welfare, and ensure social justice by targeting resources to those who require them the most.

Critics of allocation by need argue that it can lead to inefficiencies and disincentives for productivity due to the lack of market mechanisms and individual incentives. They argue that market-based allocation systems, where resources are distributed based on demand and supply, provide better incentives for innovation, productivity, and economic growth.

Overall, allocation by need is an economic concept that emphasizes the fair and equal distribution of resources based on individuals' or groups' necessities, as determined by a central planning authority or government.