Creating market economy in eastern europe essay

He concluded that free markets, the protection of private property rights, and a minimal government presence in the economy lead to prosperity. In other words, economic freedom leads to economic growth. At the end of the twentieth century, economists seem to be turning back to the ideas of Adam Smith. How could they not, especially after the collapse of most centrally planned economies around the world?

Creating market economy in eastern europe essay

In both cases, the governments also had to dedicate their work towards a process of state building that included, in many cases, creating the appropriate institutions, ensuring their functionality and their interconnectivity. However, the ways that the two countries developed were significantly different.

Despite the fact that, economically, both countries reflected a decrease in their GDP after orthe dissolution of the Soviet Union, in the case of UkrainePoland was much quicker to rebound and to firmly set its course towards building a truly democratic society, which included a vibrant civil society, increased transparency in the decision making process and an economic shock therapy that, despite the initial hardships, eventually proved the easiest way to reach a functional market economy.

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In the case of Ukraine, the absence of transparency, especially during the s, meant that different power sharing agreements made obscure groups of interest take an important role in the country's leadership. This paper aims to present a parallel between the state and society building processes after the fall of Communism in two countries, Poland and Ukraine, on three different levels to include the construction of a political society, of an economic society and of a civil society.

Further more, it will also aim to examine why Poland and Ukraine developed differently and will argue that the objectives that Poland had laid ahead for itself, including NATO and EU accession, meant that it had to abide by the implementation of all these reforms.

The construction of the political society One of the struggles in both countries came with building the appropriate political institutions in the post-Communist period.

In Ukraine, the political transformation was not as concrete and final as the one in Poland and sometimes just resumed to a process in which the institutions that had been created Presidency, Prime Minister or Parliament were fighting to share power.

There were no clear institutional rules that defined the relationship between these institutions Additionally, the primary body of institutional rules, the Constitution, took very long to be adopted, despite the fact that in other formerly Communist countries, this process was reasonably quick after the fall of the Communist regime.

This was not necessarily the case of Poland, where a new constitution was adopted inbut where the old constitution had suffered numerous amendments that had transformed it to better fit the institutional needs of the new post-Communist society.

At the same time, some of the existing elements of the Communist constitution could still to be used as a regulator of institutional activity and a defining instrument of the role of each of the branches of government.

In Ukraine, there was no such previous constitution and the state initially proposed a draft that advocated for a mixed presidential-parliamentary system.

This was eventually rejected and for years, there were no rules as to how the different institutions of government would work with one another. Further more, some of the institutions were hardly created, but rather transformed from formerly Communist institutions without an actual change.

The Ministry of Economy, for example, was formed by transforming the former central planning institution during the Communist period Another important difference in the political and institutional construction of Ukraine as compared to that of Poland was the fact that in Ukraine, much of the former Communist nomenclature remained in power, including key areas such as the Ministry of Economy or the Ministry of Finance.

In Poland, this nomenclature was pushed aside reasonably quickly and replaced with a group of people who were inspired and adhered to the ideals for change.

In the case of political construction, in Ukraine there are also additional elements to be considered. Poland was already an independent and sovereign country inat the fall of the Communist regime, while Ukraine was only an existing republic within the Soviet Union.

One of the challenges of the Ukrainian government was the consolidation of its territorial integrity and its sovereignty, the challenge to avoid civil wars as in the case of Georgia or the Republic of Moldova.

The differences between Western and Eastern Ukraine were consistent and still arebut the fact that the first two presidents of Ukraine had strong ties with Eastern Ukraine and that the industrial East had the economic upper hand as well meant that secessionist threats were put down quite soon after Economic society The immediate evolution of the economic society after was similar in the two countries, especially from an overall macroeconomic perspective and was characterized by a sharp decrease after the collapse of the Communist system.

In Ukraine, this began to be felt as soon as and the GDP decrease continued an accelerated fall throughout the period decreases of 9.

Poland was also the country in Central and Eastern Europe and former Soviet Union where economic growth resumed fastest, after only two years from the fall of Communism. Some of the reasons of the economic declines in the first post-Communist years were similar in both Poland and Ukraine.

The most notable one was the fact that the formerly Communist economies of the two countries were not adapted to the new challenges of the market economy that each government was trying to implement.

Transforming the economies into systems that would be able to cope with the competition challenges of the capitalist societies would take a couple of years in the case of Poland and are still incomplete in the case of Ukraine.

Another common reason was that both had counted on the former Soviet space as well as the formerly Communist Central and Eastern European markets as the main markets for their products and goods.

Realigning their economies to match demand on the Western market would, again, take time. However, the differences in reasons for the economic decline are numerous as well and include internal differences, as well as external objectives and perspectives. From this latter view, Poland had set for itself as the main objective NATO and EU accession ever since and its Western trajectory was constantly in that direction, including in what the economic transformation of the country is concerned.

InPoland was already a member of the Visegrad Group, just one example of its commitment to a Euro-Atlantic integration. For Ukraine, this perspective did not come until the Orange Revolution in “Contrary to popular views about precolonial Africa, local manufacturers were at this time creating items of comparable, if not superior, quality to those from preindustrial Europe.”.

The Strategies for Economic Transformation

After 45 years of a successful foreign policy based first on the containment, and then on the defeat, of communism the United States has strong moral as well as practical reasons to provide leadership in bolstering democracy and creating a market economy in Russia and eastern Europe. The Road to a Free Economy, Shifting from a Socialist System: The Example of Hungary.

Lipton, David, and Jeffrey Sachs. "Creating a Market Economy in Eastern Europe: The Case of Poland." Brookings Papers on Economic Activity 1 (): Shalski, Ernest. "The Idiot's Economy." Gazeta International '90, week 6. Williamson, John.

The Economic Systems Essay. Length: words ( not political organization that lies at the root of inequality in both North America and Eastern Europe.

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Bibliography Exchanges and the Privatization of the Agricultural Sector in the Commonwealth of Independent States Needed Steps in Creating a Market Economy ¨Law and .

"For political, economic, social and cultural reasons, communism collapsed in Eastern Europe" does a good job of "telegraphing" the reader what to expect in the essay—a section about political reasons, a section about economic reasons, a section about social reasons, and a section about cultural reasons.

However, political, economic, social. Essay by Anonymous User, College, Undergraduate, A+, November download word file, 2 pages download word file, 2 pages 2 votes Downloaded times3/5(2).

Creating market economy in eastern europe essay
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