The politics of economic transition : 'shock therapy' in Poland 1990-1991.
In the context of the profound transformative developments in Eastern Europe since 1989. this
study examines the political conception and evolution of 'shock therapy' in Poland. As the
region's pioneer of neo-liberal engineering, Poland embarked on its post-communist reforms
with a singular determination to eliminate hyperinflation and transfer the bulk of its state
enterprises into private hands. Emboldened by a unique window of opportunity in the secondhalf
of 1989 and driven by a philosophical attraction to Anglo-Saxon-style capitalism. Finance
Minister Leszek Balcerowicz's actions epitomised the 'transition' perspective. Emphasising
political imperatives in moments of accelerated change, conventional models, and a technocratic
agenda, the 'transition' school chose Poland as its exemplary pupil. The 'adaptation' perspective.
by contrast, defended by social democrats such as Ryszard Bugaj, recognised the constraints
Polish reformers faced in departing from central planning, notably in their efforts to rid state
firms of their self-managed status. Stressing the legacies of the past, indigenous structures, and
a negotiated framework, the 'adaptation' school eschews sharp historical demarcations and
Focusing on the endogenous aspects of the Polish transformation. this research
demonstrates the need for a multifaceted evolutionary approach in which the 'transition'
perspective offers insights on the foundations of 'shock therapy' while the 'adaptation'
perspective underscores the significance of the self-management inheritance: the former, it is
argued, helps explain the success of macroeconomic stabilisation while the latter reveals the
impediments to large-scale privatisation. Four political variants of Polish neo-liberalism are
presented in the context of a well-defined policy regime which became entrenched during the
1990-1991 years. The spurious 'shock therapy versus gradualism' debate is then explored in
order to illustrate the importance of initial conditions - the Hungarian route being of particular
relevance. Finally, the views of the standard bearers of both schools, Jeffrey Sachs and John
Gray, are discussed, if only to emphasise the need for clarity and specificity in the reform