Economic transition in Poland: the relevance of the Latin-American experience

Abstract

Shock therapy was used in Poland causing many problems. It is true that four years later the economy started to grow again, but the transition to the market economy took place with high unemployment rates and increasing social inequalities. Poland’s liberalization and economic stabilization program has a lot to do with similar programs experienced in Latin America and could be useful to Poland. In the short term, costs are similar to those of the Latin American experience. Even though stabilization was partially achieved, the social costs that took off were large, making the continuation of economic reform politically indigestible in the democratic context.