User:Grobinson22/Balcerowicz Plan

Balcerowicz Plan “Shock Therapy” Poland’s transition to market economy after its political liberalization in 1989 is generally regarded as one of the most successful transitions of all post-Soviet economies. This success is commonly attributed to The Balcerowicz Plan, also termed "Shock Therapy", It was a method for rapidly transitioning from a communist economy, based on state ownership and central planning, to a capitalist market economy. Named for its author, the Polish minister and economist Leszek Balcerowic The Polish post-communist experience is unique. Despite facing formidable economic, political and social challenges upon democratization, today Poland is a developed nation that has high levels of economic development and European integration, especially compared to its fellow Eastern European states. The credit for Poland’s success rests partly on its quick adoption of liberal free market policies in the immediate aftermath of revolution termed “shock therapy”, which included market liberalization and the end of the soviet-era. State planners directly controlled the output of the industrial sector, preferring capital goods manufacturing over consumer goods (Kondratowicz 1993, 7), a preference that led to the widespread shortages of basic foodstuffs in the shops. While shortages and consumer good scarcity were common in communist nations, they were much more severe in Poland (Adam 1999, 22). Consumers responded to chronic shortages by establishing an extensive black market economy that official price controls and regulation. ignored