What is the incentive problem in central planning?

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In a centrally planned economy the incentives are ineffective for encouraging economic initiative and work, or for directing the most efficient use of productive resources. In a market economy, profits and losses signal what firms should produce, how they should produce, and how productive resources should be allocated to best meet the wants of a nation. Central planning also lacked entrepreneurship and stifled innovation, both of which are important forces for achieving long-term economic growth. Individual workers lacked much motivation to work hard because pay was limited and there were few consumer goods to buy or they were of low quality.