Did the ''shock therapy'' approach work in the economic restructuring of Eastern Europe? Some evidence from Poland and Russia: a brief review

Abstract

In 1989, the world witnessed the beginning of one of the most dramatic changes in economic systems. It was the revolutionary changes in Poland in 1989 that initiated the collapse of the Soviet–style command economic system of Eastern Europe and the Soviet Union. The economic system transformation that followed did not have any precedence or established theories to rely on. Thus, some countries opted for a shock therapy approach while most opted for the gradual therapy approach to economic restructuring. Ten years after, this paper attempts to shed some light on the relative success of these two alternative approaches.