Despite lingering macro-economic problems, Poland’s achievements on liberalization, privatization and economic growth are impressive. However, social and political resistance to further reform in Poland could cause the successes of privatization to be minimised. Against this, it was announced in December 1994 that Poland could be admitted to the European Economic Union within 10 years and enlargement eastwards is a major agenda item for Britain’s presidency of the Union during the first half of 1998. If this occurs, conventional wisdom would hold that privatization would need to be completed in the near future to allow Polish firms sufficient time to build adequate competitive capabilities.
An early solution to the privatization debate is thus required. Economists have advanced powerful theoretical arguments to support privatization, especially on the grounds of efficiency, competitiveness and growth, while social commentators have pointed to the resultant high levels of inflation and unemployment. However, there has been no systematic empirical investigation to determine the effects of privatization on business behaviour and performance in Central and Eastern Europe.
