THE POLISH MODEL OF TRANSFORMATION AND GROWTH

This paper attempts to answer why growth in Poland, in the post-1989 p eriod, has been much faster than in other transition countries and why macroeconomic instability and a stagflation phenomenon, experienced b y both Hungary (1995-96) and the Czech Republic (1997-98), have so far been successfully avoided in Poland. The paper discusses the roles in this dual success of specific initial conditions, of the model of tra nsformation adopted, and of the choice of particular policies. The pap er also discusses the reforms and policies needed, and proposed in Pol and under the Balcerowicz Plan Mark II, to increase domestic savings a nd sustain rapid growth in the longer term.