IDEAS home Printed from
   My bibliography  Save this article

Transition To A Market. Why Gradualism Works And Radicalism Fails?


  • Grzegorz Kolodko


Years after commencement of the systemic reforms in Central East Europe and the former Soviet Union the debate on the way of conducting reforms is still on. The main question remains: gradualism or radicalism? Unfortunately many countries decided to embark on a radical way of transformation which resulted in a number of cases in decrease of GDP, and consequently substantial lowering in the standard of living of their citizens. By the year 2004 many countries still have not reached the GDP level from the year 1989. Transformation, however, in its very meaning is a gradual process. It consists of three main elements: liberalisation and stabilisation; institutional building; and macroeconomic restructuring. Completion of all three processes requires time, in particular as far as institutional building and microeconomic restructuring are concerned. Poland, although unnecessarily started loosing its GDP at the beginning, recovered relatively rapidly. The economic systemic reforms here can be divided into four periods: "shock without therapy" (1989-1993), "Strategy for Poland" (1994-1997), overcooling (1998-2001) and from 2002 until now the period of accelerated growth. During realisation of the "Strategy for Poland" the country gained 28 percent in economic growth per capita, unemployment shrank from 17 to 10 percent. Results in economic performance are also dependent on the long-term development policy. The Chinese experience proves the importance of it.

Suggested Citation

  • Grzegorz Kolodko, 2005. "Transition To A Market. Why Gradualism Works And Radicalism Fails?," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 1(1), pages 19-25.
  • Handle: RePEc:mje:mjejnl:v:1:y:2005:i:1:p:19-25

    Download full text from publisher

    File URL:
    Download Restriction: no

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Teece, David J, 1993. "The Dynamics of Industrial Capitalism: Perspectives on Alfred Chandler's Scale and Scope," Journal of Economic Literature, American Economic Association, vol. 31(1), pages 199-225, March.
    2. Feldman, Maryann P. & Audretsch, David B., 1999. "Innovation in cities:: Science-based diversity, specialization and localized competition," European Economic Review, Elsevier, vol. 43(2), pages 409-429, February.
    3. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 577-598.
    4. Stephen Nickell, 1997. "Unemployment and Labor Market Rigidities: Europe versus North America," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 55-74, Summer.
    5. Richard R. Nelson, 1981. "Assessing Private Enterprise: An Exegesis of Tangled Doctrine," Bell Journal of Economics, The RAND Corporation, vol. 12(1), pages 93-111, Spring.
    6. Audretsch, David B & Feldman, Maryann P, 1996. "R&D Spillovers and the Geography of Innovation and Production," American Economic Review, American Economic Association, vol. 86(3), pages 630-640, June.
    7. Jaffe, Adam B, 1989. "Real Effects of Academic Research," American Economic Review, American Economic Association, vol. 79(5), pages 957-970, December.
    8. Teece, David J. & Rumelt, Richard & Dosi, Giovanni & Winter, Sidney, 1994. "Understanding corporate coherence : Theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 23(1), pages 1-30, January.
    9. Richard Nelson, 1995. "Co-evolution of Industry Structure, Technology and Supporting Institutions, and the Making of Comparative Advantage," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 2(2), pages 171-184.
    10. Stiglitz, Joseph E, 1996. "Some Lessons from the East Asian Miracle," World Bank Research Observer, World Bank Group, vol. 11(2), pages 151-177, August.
    11. Noland, Marcus, 1993. "The Impact of Industrial Policy on Japan's Trade Specialization," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 241-248, May.
    12. Pugel, Thomas A., 1984. "Japan's industrial policy: Instruments, trends, and effects," Journal of Comparative Economics, Elsevier, vol. 8(4), pages 420-435, December.
    13. Audretsch, David B & Stephan, Paula E, 1996. "Company-Scientist Locational Links: The Case of Biotechnology," American Economic Review, American Economic Association, vol. 86(3), pages 641-652, June.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Svetlana Kirdina, 2012. "From Marxian School Of Economic Thought To System Paradigm In Economic Studies: The Institutional Matrices Theory," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 8(2), pages 53-71.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mje:mjejnl:v:1:y:2005:i:1:p:19-25. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nikola Draskovic Jelcic). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.