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Central and Eastern Europe politics: gradualism and shock therapy - Essay Example

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The paper compares two different approaches to the implementation of market-oriented reforms, such as gradualism and radicalism (shock therapy), in Central and Eastern Europe countries. Historical experience of such transformations is analyzed in the essay…
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Central and Eastern Europe politics: gradualism and shock therapy
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Central and Eastern Europe politics: gradualism and shock therapy

Download file to see previous pages... This paper offers comprehensive historical review of implementation of two different strategies of transformation of the planned economies in CEE countries. The relative successes of those transitions are considered in the essay.
The collapse of Communism sparked a debate over the best strategy to transform the CEE countries from communist economy to western based market economy. The conflict arose between radicals who believed that the economy required sudden transition to a market-based economy and gradualists who believed that the economic transition ought to be gradual on the basis that a sudden transition would be too much disruptive.
Countries in CEE have devised various strategies to protect of economies from disruption. After a decline in the growth rates across the communist region, it was expected that economic transition would enable the economies of the region to achieve faster growth rates and eventually, converge with the advanced western economies. In this respect, most countries in CEE adopted shock-therapy.
Liberalization and privatization provided opportunities for creation of new enterprises, majorly in the consumer sector where demand was depressed for many years. Despite the successes the shock therapy brought in various economic sectors such as emergence of entrepreneurs and positive transformation of state enterprise, the strategy caused numerous disruptions to weak sectors and populations.
The directions of geopolitics taken by t countries were also political and aimed at gaining economic benefits. ...Download file to see next pagesRead More
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