POST 201 Chapter Notes - Chapter 12: Chin Na, Small Business, Free Trade
18 Jul 2016
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The invisible hand and the grabbing hand; timothy. In the 1990s, several east european economies went through radical liberalization. Russia and poland adopted similar packages of reforms, including almost complete price and trade liberalization, macroeconomic stabilization (which poland accomplished five years before russia), large-scale privatization (which russia did four years before poland), and small-scale privatization. While poland started two years earlier, both reform packages were radical. Polish economy responded much better to the treatment. By the mid 1900"s, it was growing rapidly. While the russian economy at best stopped shrinking. Formation and growth of small businesses was also more dramatic in poland. In 1995, poland had about 2 million small private businesses. Small business formation is still more lethargic in russia. Argue that a key reason for this outcome is there are very different relationships between government and business in the two countries.
