Slovakia on the Road to a Market Economy in 2000

Abstract

When the former centrally controlled economies began transforming into market economies ten years ago, economists offered the following basic formula for successful transformation: “transformation equals privatization plus deregulation plus liberalization.” The first successful liberalization and deregulation measures and the relatively smooth course of small-scale privatization were followed by deep recession (affecting all the countries undergoing transformation regardless of whether they were officially pursuing a “shock” or a “gradual” transformation strategy). Together with the internal disintegration of company structures before the launch of large-scale privatization, this situation gave impetus to more purposeful consideration of the microeconomic, structural, and institutional aspects of transformation. Unemployment and inflation caused a sharp fall in the standards of living and were not only the side effects of transformation but also the factors determining its course, which was mirrored in the countries’ indicators of economic output as well as social capacity.