Mass privatization in Poland: Processes, problems and prospects

Abstract

Since late 1989, Poland and other former socialist, centrally planned economies of Central and Eastern Europe have embarked on an amazing journey into the unknown. This process of political and economic transfor? mation involves the establishment of a pluralistic society, elimination of central planning, and dismantling of the institutions of a command system, such as centralized decision-making and state ownership of the means of production. The program of economic reform in the former socialist countries has had three major components; liberalization of government regulation of prices and economic activities, macroeconomic stabilization, and rapid pri? vatization of state-owned assets. Although these reforms were initially em? braced with enthusiasm, it now seems that the early euphoria has been retained only by those who refuse to admit these countries' continuing eco? nomic problems. In particular, by early 1995, it became clear that the so called shock therapy approach to reform failed to accomplish its goal of rapidly creating a market economy, and was instead associated with eco? nomic failure and political and social opposition. In all transitional econo? mies, domestic production in 1994 was significantly lower than in 1989.1 Consequently, to many in Poland and other countries of Central and East? ern Europe, survival has become more important than discussions over the optimal speed of reforms, or the exact features that reforms should include. This paper focuses on one aspect of transition?mass privatization of state assets. Although the idea of privatization is quite popular in Poland