Summary Effective planning makes a vital contribution to developmental success. It is generally perceived as being either centralized (top‐down) or decentralized (bottom‐up). Centralized planning dominated the early development decades, but disappointing results greatly lessened its appeal and paved the way for participatory and decentralized planning. Both types of planning are evident today, but the question has arisen as to whether top‐down and bottom‐up planning can be successfully combined into one effective, efficient, and popular system. This question is examined through the case of Bhutan where central planning was introduced at the outset of the country's push for modernization and today leads the way in the country's pursuit of Gross National Happiness (GNH). However, central planning has been complemented with decentralized participatory planning at the subnational levels. Success in aligning the two planning modes has been achieved by incremental development of the planning system, orientation to the unifying national vision of GNH, a powerful central planning agency, actors at all levels who are able and knowledgeable in their planning roles, and processes that are well organized and proven to work to the satisfaction of all participants.
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