Theory of two-level planning

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The Theory of two-level planning, better known in the West as the Kornai-Liptak decomposition, is a method for the decomposition of large linear programs into sub-problems so as to make the solution of the overall problem easier. It provides a model of how economic decisions might be decentralized and yet coordinated so as to achieve a global optimum. It was introduced by the Hungarian economist János Kornai and the mathematician Tamás Lipták in 1965. It is an alternative to Dantzig-Wolfe decomposition.