Post-Adaptation Growth Recovery in Poland and Russia - Similarities and Differences
AbstractThe purpose of this paper is to analyze the sources, economic and social characteristics, of growth recovery, which followed the first period of output decline in two transition countries – Poland and Russia. They represent two different groups of transition countries (new EU member states vs. CIS) in terms of adopted transition strategy and accomplished results. Generally, fast reformers succeeded and slow reformers experienced a lot of troubles. Although eventually all former communist countries entered the path of economic growth, those which moved slowly lost sometimes the whole decade. Social costs of slow reforms were also dramatic: income degradation and rising inequalities, high level of poverty and corruption, various social and institutional distortions and pathologies, violation of human rights and civil and economic liberties, attempts of authoritarian restoration, etc. The period of ‘adaptation’ output decline was much more severe and longer in Russia than in Poland, and recovery came later. Unlike in the leading transition countries, the role of new private firms and FDI in Russia has been very limited what can be explained by administrative barriers, widespread corruption, lack of transparency, instability and contradictions in economic legislation, reflecting poor business climate. In the absence of FDI and with limited role of SME Russian economy is dominated by large domestic corporations, many of them having an ‘oligarchic’ characteristic. This additionally complicates the political economy of market reforms and weakens constituency of favor of open democratic society and liberal economic policies. The high oil prices helped in economic recovery and fiscal adjustment in Russia in early 2000s. However, Russian economy has become increasingly oil-dependent. While major obstacles to future Russia’s growth can origin from its structural monoculture dominated by the oil and energy sector, and poor business climate, the excessive welfare state can be considered as the main development burden in the case of Poland. In both analyzed countries poverty and inequality increased substantially during 1990s, to much bigger extent in Russia compared to Poland. While part of the income polarization was inevitably connected with departure from communist egalitarianism and part of poverty phenomenon reflected transition adaptation costs, other factors such as continuous structural distortions, incomplete liberalization, high inflation, insufficient competition, barriers to entrepreneurship, institutional weaknesses of the state captured by oligarchs, corruption, etc.,played a significant role here.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by CASE-Center for Social and Economic Research in its series CASE Network Studies and Analyses with number 0280.
Length: 63 Pages
Date of creation: 2004
Date of revision:
transition; transition strategy; growth; poverty; income inequality; Poland; Russia; Central and Eastern Europe; CIS;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- John Flemming & John Micklewright, 1999.
"Income Distribution, Economic Systems and Transition,"
Innocenti Occasional Papers, Economic Policy Series
iopeps99/69, UNICEF Innocenti Research Centre.
- Flemming, J.S. & Micklewright, John, 2000. "Income distribution, economic systems and transition," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 14, pages 843-918 Elsevier.
- Dabrowski, Marek, 1996. "Different strategies of transition to a market economy : how do they work in practice?," Policy Research Working Paper Series 1579, The World Bank.
- Nauro F. Campos & Abrizio Coricelli, 2002.
"Growth in Transition: What We Know, What We Don't, and What We Should,"
Journal of Economic Literature,
American Economic Association, vol. 40(3), pages 793-836, September.
- Nauro F. Campos & Fabrizio Coricelli, 2002. "Growth in Transition: What We Know, What We Don't, and What We Should," William Davidson Institute Working Papers Series 470, William Davidson Institute at the University of Michigan.
- Campos, Nauro F & Coricelli, Fabrizio, 2002. "Growth in Transition: What we Know, What we Don't and What we Should," CEPR Discussion Papers 3246, C.E.P.R. Discussion Papers.
- Anders Åslund & Peter Boone & Simon Johnson, 1996. "How to Stabilize: Lessons from Post -communist Countries," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 27(1), pages 217-314.
- Yemtsov, Ruslan, 2003. "Quo Vadis? Inequality and Poverty Dynamics across Russian Regions," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Simon Commander & Andrei Tolstopiatenko & Ruslan Yemtsov, 1999.
"Channels of redistribution: Inequality and poverty in the Russian transition,"
The Economics of Transition,
The European Bank for Reconstruction and Development, vol. 7(2), pages 411-447, July.
- Simon Commander & Andrei Tolstopiantenko & Ruslan Yemtsov, 1997. "Channels of Redistribution: Inequality and Poverty in the Russian Transition," William Davidson Institute Working Papers Series 42, William Davidson Institute at the University of Michigan.
- Miriam Beblo & Stanislawa Golinowska & Charlotte Lauer & Katarzyna Pietka & Agnieszka Sowa, 2002. "Poverty Dynamics in Poland. Selected Quantitative Analyses," CASE Network Reports 0054, CASE-Center for Social and Economic Research.
- Marek Dabrowski & Stanislaw Gomulka & Jacek Rostowski, 2001.
"Whence reform? A critique of the stiglitz perspective,"
Journal of Economic Policy Reform,
Taylor & Francis Journals, vol. 4(4), pages 291-324.
- M Dabrowski & Stanislaw Gomulka & J Rostowski, 2000. "Whence Reform? A Critique of the Stiglitz Perspective," CEP Discussion Papers dp0471, Centre for Economic Performance, LSE.
- Marek Dabrowski & Stanislaw Gomulka & Jacek Rostowski, 2000. "Whence reform? A critique of the Stiglitz perspective," LSE Research Online Documents on Economics 20167, London School of Economics and Political Science, LSE Library.
- Olivier Jean Blanchard & Maxim Boycko & Marek Dabrowski & Rudiger Dornbusch & Richard Layard & Andrei Shleifer, 1993. "Post-Communist Reform: Pain and Progress," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262023628, December.
- Vladimir Mau & Konstantin Yanovskiy, 2002. "Political and Legal Factors of Economic Growth in Russian Regions," Post-Communist Economies, Taylor & Francis Journals, vol. 14(3), pages 321-339.
- Milanovic, Branko, 1998. "Explaining the increase in inequality during the transition," Policy Research Working Paper Series 1935, The World Bank.
- Forster, Michael & Jesuit, David & Smeeding, Timothy, 2003. "Regional Poverty and Income Inequality in Central and Eastern Europe: Evidence from the Luxembourg Income Study," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Marek Dabrowski, 2005. "A Strategy for EMU Enlargement," CASE Network Studies and Analyses 0290, CASE-Center for Social and Economic Research.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Katarzyna SidÅ‚o).
If references are entirely missing, you can add them using this form.