The fall of Communism in Central and Eastern Europe since 1989 has initiated massive political and economic changes in the region. One of the first decisions made by new political regimes in Central Europe was to dismantle the planned socialist systems and initiate a program of ambi? tious economic reforms that include large-scale privatization of state-owned land and capital. Poland has been in the forefront of these changes since the first democratic government in the region was established in 1989. The proc? ess of privatization of the economy in Poland and in other Central Euro? pean countries is an enormous task, for it is not limited to specific industries or even sectors of the economy, as in Great Britain or Mexico, but requires privatizing 60-70% of the economy in a relatively short pe? riod of time. This task is very difficult because there have been no es? tablished examples of a system change from command socialism to market capitalism. The complexity of this process is made even more dif? ficult by the enormous economic problems inherited from the inefficien? cies of the former centralized system: massive foreign debt, double or even triple-digit inflation, budget deficits, pollution, and an employment structure' heavily biased toward obsolete heavy industry. In addition to this, the government is committed to support and guarantee a vast net of social benefits such as free medical care, college education, paid ma? ternity leave, social security, and unemployment benefits in order to mini? mize the risk of social unrest which results from growing unemployment and falling real wages. This paper proceeds in four parts: Section 1 outlines the historical background of the privatization policy in Poland. In Section 2 the present