From Shock to Therapy: The Political Economy of Postsocialist Transformation by Grzegorz W. s> Kolodko (review)

Abstract

580 SEER, 79, 3, 200I the author indicates that 'the system'sability to find an answerto the crucial question of financial and human resources [. . .] is limited' (p. i66). Significantly , five of the headings of the eight sections in Part Three end with a question mark. The writer's final conclusion is that reform and innovation may 'not be so important afterall [and] priorityshould be to ensure that the school system survives the current turbulent period more or less intact' (p. i66). The volume's content and the angle of analysisshould make it a sound and reliable basis and serve as an inspiration -for any course on Russian education and itsproblemsin the opening yearsof the twenty-firstcentury. London J. J. TOMIAK Kolodko, GrzegorzW. From Shock to7herapy.ThePolitical Economy ofPostsocialist Transformation. Oxford University Press, Oxford, 2000. Xii + 457 pp. Notes. References. Tables.Appendices. Index. /48.oo. FROM its title this is clearly a polemical book. The author, a former First Deputy Premier and Minister of Finance of Poland from 1994-97 and the architectof the 'Strategyfor Poland',which has made that countryone of the main success storiesof the transitionprocess, provides a highly readable and sensible critique of the so-called 'Washington consensus' on the recipe for transformationof former Soviet-type economies. Kolodko's account of the process and its lessons attempts to transcend the Polish experience. He compares it with the generallyless successfulresultsnot only in the European and post-USSR 'transition economies' but also with the markedly different transformationalexperiences of China, Vietnam and the non-socialistAsian economies, such as the ASEAN and South Asian countries. Some of these comparisonsare a bit wide of the mark,reflectinga tendency of the author to accept official statistics at face value, whereas a deeper knowledge of local conditions might have suggested a bit more caution. This is true of Croatia, forexample, whose comparativeeconomic 'achievements'(inKolodko'seyes) would be news to Croatian citizens, who have recently sacked the successors of the regime of the late President Tudjman, largely because of its glaring economic failures. Nevertheless,Kolodko has many usefulthingsto tell us about the necessary conditions for successful transition. For one thing, he emphasizes that a distinction must be made between transition policy and developmental strategy.Transitionis a process, not a goal in itself.The goal of the process is to attain sustainable growth which will benefit the society as a whole, not merely the early-bird'spontaneousprivatizers'and the gurusof the IMF and the World Bank. For another, while Kolodko sees a generally positive and, indeed, essential role for these institutions, especially in the early stages of transition,he is farless congratulatoryof their stereotypedrecommendations and the 'conditionality'of theirfinancialassistance. He is a strongproponent of a more gradual, institution-buildingapproach to the achievement of liberalization, stabilization and privatization, the three pillars of the IMF-sponsored strategy for post-socialist transformation. REVIEWS 58I Acknowledgingthe need for the three processes, Kolodko argues that if their speedy implementation resultsin seriouseconomic recession as has almost always been the case then there is something wrong with the recipe. And given the need for public support for transition in the newly democratized political systems, governments which do not adopt a more appropriate developmental strategyfairlyearly in the process will not long be in office to implement their policies. The recent upsurge in supportfor left-wing parties throughout the post-socialist countries suggests that Kolodko is quite right. Even in relativelysuccessfulPolandthe left seems about to stagesomething of a comeback, as the social costs of transformation, globalization and the forthcoming integration into the EU are becoming more apparent to a population that has been remarkablytolerant of the sacrificesit has had to make to achieve the resultsattainedso far. Kolodko, a moderate centre-leftist, illustrates the dilemmas facing the responsiblereformerin these transitioncountries. He obviously chafes at the often gratuitousadvice of the 'Breton Woods' institutions, but he recognizes that theyset the rulesforthe only game in town and basicallyaccepts(perhaps sometimes too willingly) the parameters laid down. On the other hand, he perceives certain social and even economic benefits under the old socialist institutionalsystem,which could have been enlistedto ease the transition.His analysisof the old systemand where it went wrong underthe megalomaniacal dominance of Soviet leaders is a valuable contribution...