From transition to market: evidence and growth prospects

Abstract

It is now over six years since the start of the Polish economic reform programme, and over four years since the break-up of the Soviet Union. A priori speculation about the nature of the economic transition can now give way to a discussion of what has happened so far, and to a better informed speculation — though speculation nonetheless — of what may happen in future. The story so far is that the leading reformers of Central and Eastern Europe (CEE) have moved impressively down he road to macroeconomic stability and a market economy, and that most of the remaining countries have taken major strides towards stabilization and reform. The output costs of reform in most economies have probably exceeded expectations,¹ but output declines have stopped in all countries that have stabilized and growth has begun in most of them. The fear that politics would not sustain reform unless progress was rapid has turned out not to be valid in most countries.²