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The Economic Transformation of Eastern Europe: The Case of Poland


  • Sachs, Jeffrey D


This article identifies the main features of Poland's radical transition to capitalism--stabilization program, trade liberalization, and privatization reform. The "shock therapy" adopted by Poland in 1991 is presented as the most effective approach, though not without political risk. In fact, the major threat to Poland's transition process is the emergence of well organized "interest groups" putting increasing demand on the government to relax financial restrictions and re-open large-scale subsidization. These political pressures have already caused a slowdown in the privatization program, so that there is a possibility of the renewal of rapid inflation. Several methods for accelerated privatization, including the distribution of vouchers and setting up investment funds to manage portfolios of shares, are discussed in detail. Copyright 1992 by Kluwer Academic Publishers

Suggested Citation

  • Sachs, Jeffrey D, 1992. "The Economic Transformation of Eastern Europe: The Case of Poland," Economic Change and Restructuring, Springer, vol. 25(1), pages 5-19.
  • Handle: RePEc:kap:ecopln:v:25:y:1992:i:1:p:5-19

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    References listed on IDEAS

    1. de Mello, L. Jnr. & Teixeira, J. R., 1993. "The updating of input-output matrices a systematic survey," Economics Letters, Elsevier, vol. 41(3), pages 241-245.
    2. F J Harrigan & J W McGilvray & I H McNicoll, 1980. "Simulating the structure of a regional economy," Environment and Planning A, Pion Ltd, London, vol. 12(8), pages 927-936, August.
    3. F J Harrigan & J W McGilvray & I H McNicoll, 1980. "Simulating the Structure of a Regional Economy," Environment and Planning A, , vol. 12(8), pages 927-936, August.
    4. R. C. Jensen, 1980. "The Concept of Accuracy in Regional Input-Output Models," International Regional Science Review, , vol. 5(2), pages 139-154, August.
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    Cited by:

    1. Everett, Jeff & Neu, Dean & Rahaman, Abu Shiraz, 2007. "Accounting and the global fight against corruption," Accounting, Organizations and Society, Elsevier, vol. 32(6), pages 513-542, August.
    2. Cesar Martinelli & Mariano Tommasi, 1993. "Sequencing of Economic Reforms in the Presence of Political Constraints," UCLA Economics Working Papers 701, UCLA Department of Economics.
    3. Lawrence King & Patrick Hamm, 2005. "Privatization and State Capacity in Postcommunist Society," William Davidson Institute Working Papers Series wp806, William Davidson Institute at the University of Michigan.
    4. Tihomir Enev & Kenneth Koford, 2000. "The Effect of Incomes Policies on Inflation in Bulgaria and Poland," Economic Change and Restructuring, Springer, vol. 33(3), pages 141-169, October.
    5. William J. Baumol, 1993. "On the Perils of Privatization," Eastern Economic Journal, Eastern Economic Association, vol. 19(4), pages 419-440, Fall.
    6. repec:kap:iaecre:v:9:y:2003:i:1:p:35-47 is not listed on IDEAS
    7. George, Emmanuel & Odejimi, Deborah & Matthews, Oluwatoyin & Ojeaga, Paul, 2013. "Is Privatization Related With Macroeconomic Management? Evidence From Some Selected African Countries," MPRA Paper 62211, University Library of Munich, Germany, revised 04 Aug 2014.
    8. Marcello Signorelli & Enrico Marelli, 2007. "Institutional change, regional features and aggregate performance in eight EU’s transition countries," Quaderni del Dipartimento di Economia, Finanza e Statistica 37/2007, Università di Perugia, Dipartimento Economia.
    9. Patrick Hamm & David Stuckler & Lawrence King, 2006. "Mass Privatization and the Postcommunist Mortality Crisis," Working Papers wp118, Political Economy Research Institute, University of Massachusetts at Amherst.
    10. Blangiewicz, Maria & Charemza, Wojciech W., 2001. "East European economic reform: Some simulations on a structural VAR model," Journal of Policy Modeling, Elsevier, vol. 23(2), pages 147-160, February.
    11. ter Horst, H.A.F., 1996. "Socialism, Capitalism, and Transition with Special Reference to Poland," Other publications TiSEM 58e2e881-80c1-45a0-8ce8-7, Tilburg University, School of Economics and Management.
    12. Cesar Martinelli, 2001. "Essays on Political Economy of Political Reform," Levine's Working Paper Archive 625018000000000135, David K. Levine.
    13. Jordi Pons & Ma Lacasta, 2003. "Exchange rate and long run equilibrium in transition economies," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 9(1), pages 35-47, February.
    14. Gerber, Theodore P. & Hout, Michael, 1999. "More Than Shock Therapy: Market Transition, Employment, and Income in Russia, 1991-1995," Center for Culture, Organizations and Politics, Working Paper Series qt8kv6v960, Center for Culture, Organizations and Politics of theInstitute for Research on Labor and Employment, UC Berkeley.
    15. Raiser, Martin, 1992. "Soft budget constraints: An institutional interpretation of stylised facts in economic transformation in Central Eastern Europe," Kiel Working Papers 549, Kiel Institute for the World Economy (IfW).

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