State-owned companies are privatized, trade is liberalized and subsidies are withdrawn within a short period of time. Proponents argue that shock therapy can rapidly kick-start a country’s economy when it transforms from a socialist into a capitalist one. Many proscribe this success to economic “shock therapy”. Without doubt, Poland’s transition from a socialist into a market economy is one of the most successful such transformations in history. So, the story of 25 years of Polish post-socialist history varies considerably from period to period. But during the early and late 1990s we were not that successful at all. When we were working towards a social market economy following the line of my new pragmatism, we were more and more successful. And this combination of the power of the invisible hand of the market and the power of rational, reasonable and accountable government is behind our relative success. Transition is not just about privatization and liberalization (which is of utmost importance), but first and foremost about building institutions which are compatible with the flows of private entrepreneurship and business, while at the same time ensuring social cohesion. Secondly, there were periods of time – also under my stewardship as Deputy Prime Minister – when we did pay proper attention to structural reforms and institution building. I would say we are doing this for two reasons. First of all, due to the reforms of the late socialist system, we were prepared better for the jump into a full-fledged market economy and democracy than anyone else in the region. But, together with countries like the Czech Republic, Slovenia, and to some extend Slovakia and Estonia, we are leading this post-socialist transition. Without the periods of ‘shock-without-therapy’ at the beginning of the early 1990s and the mistakes of the late 1990s, we would be doing much better. Poland is a relative success story, but I’m emphasising ‘relative’. Kolodko, former Deputy Prime Minister and Minister of Finance during Poland’s transition to a liberal democracy with a market economy.

To get a response, we spoke to Professor Grzegorz W. Why has Poland done so well in comparison to many other former socialist economies? What’s Poland’s secret? And in 2009 it was the only EU member state that did not post a negative growth rate as a result of the financial crisis.īy comparison, average economic growth rates in Hungary and Czech Republic during the 1990s were much lower, 1.7% and 2.1% respectively. In those twenty years, Poland’s GDP has almost quadrupled. Of all the former socialist countries, Poland is the one most often held up as a success story, both economically and politically. According to the World Bank, Poland hasn’t experienced negative economic growth since 1992, with an average annual growth rate of 5.1% over the 1990s and 3.8% between 20.

Alexandros steward wow