The Economic Transformation of Eastern Europe: The Case of Poland

Abstract

In virtually every aspect of economic life, the communist legacy is adverse. Normal market institutions were destroyed by the communist rulers in the early post-war period, so that even the most basic categories of economic life in a market economy—corporations, bankruptcy law, securities trading, collective bargaining—must be painfully reconstructed. For four decades, capital spending was dictated by political fiat, in a system that valued heavy industry to the neglect of basic consumer needs, and that ruthlessly reoriented trade from Western Europe to the Soviet Union.