THE POLISH RECIPE

Abstract

Twenty-six years ago the international community witnessed one of the most dramatic changes in economic systems. Naturally, the fall of communism in Eastern Europe and its consequences were events difficult to judge and anticipate in their immediate aftermath. Today, we have gained a much more coherent perspective on their meaning. The political liberalization of Poland in 1989 and its transition to the market economy was generally perceived as the most successful of all post-communist countries. From 1990 to 2013, Poland experienced the most outstanding economic growth within the former communist bloc. It doubled its GDP in real terms and became the only country to experience economic growth during the financial crisis of 2008-09. However, the polish secret recipe lies in the shock therapy adopted at the beginning of the 90's. The aim of this paper is to examine the importance of the Balcerowicz's program in creating the basis for economic stability and growth through privatization, liberalization of foreign trade, monetary reform and an open economy. We will also review the impact of this unprecedented transformation in shaping a strong, market-oriented economy.