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A palace economy or redistribution economyde Blois, Lukas; R.J. van der Spek; Susan Mellor (translator) (1997). An Introduction to the Ancient World. Routledge, pages 56-60. ISBN 0415127734. is a system of economic organisation in which a substantial share of the wealth flows into the control of a centralized secular administration, the palace, and out from there to the general population, which may be allowed its own sources of income, but relies heavily on the wealth redistributed by the palace.
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Many pre-industrial civilizations practised economies that fit this economic model.
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The contemporary economy of North Korea has also been characterized as a palace economy. It is entirely state-controlled, and so inefficient that the country depends on foreign aid for the survival of its population[citation needed].
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