Determinants of Success In Reform Strategies : A Case Study of Hungary and Poland

The capacity of a post-communist country to minimize social pain is essential to the very existence of the new government. In studying the transitional economies of Eastern Europe, it is important to attempt to determine what factors have lead to a level of success in not only moving towards a market economy, but also in minimizing the social pain of that transition. Hungary and Poland have been cited as two of the most successful nations in moving towards economic success (Slay, 1994). Interestingly, these two countries selected different reform strategies, the gradualist approach and the shock therapy approach respectively. With these different strategies, they have met with similar results, results that are some of the most optimistic in all of Eastern Europe. This study will analyze how two very different reform strategies can produce similar outcomes. The paper will attempt to determine the other factors that have been important to the success of these two case studies.