Not such a simple matter in either case.
China is arguably a "stuck-in-the middle" case and doing much better than many. And Russia was more aggressive about going capitalist in certain areas than Poland, e.g. in privatizing state-owned enterprises where Poland has been much more cautious partly out of fear of German buyouts and partly because of worker resistance given that the Jaruzelski regime introduced major elements of Yugoslav-style worker-management that will almost certainly disappear when Leszek Balcerowicz finally gets his way and privatizes them. BTW, the SOEs in Poland have not done too badly. In short, it is the nature of the system that one goes too, not whether it is "shocking" or "gradualist" that matters.
As for debt forgiveness, clearly this may be helpful and even desirable in many circumstances. But it is not necessarily necessary. Thus, Lech Walesa went before the US Congress and whined about Yalta thereby guilt-tripping them into providing debt forgiveness, whereas the Hungarians have not asked for any debt forgiveness. One result? Hungary has been the recipient of much more foreign direct investment than has been Poland. Barkley Rosser On Tue, 15 Sep 1998 09:51:29 -0700 Brad De Long <delong at econ.Berkeley.EDU> wrote:
> >Re Max's: "All this psychological speculation [about Jeffrey Sachs] is
> >quite beside
> >the point, if the least bit of his record is known."
> >
> >I dunno -- going from being the prime architect of economic "shock
> >therapy" to an advocate of debt forgiveness
>
> Two separate issues:
>
> "Shock therapy" is a judgment that you need to get from
> bureaucratic-industrial feudalism to the capitalist mode of production
> *as*fast*as*possible* because to be stuck in the middle (as Russia is
> today) is the worst of both worlds.
>
> "Debt forgiveness" is a judgment that first-world creditor attempts to get
> third-world countries to repay past loans that have gone bad is doing
> enormous damage to third-world attempts at development.
>
> Both judgments still look to me to be correct: looking at Poland, Russia,
> Ukraine, and Romania makes me think that shock therapy was the best of a
> very bad set of options. Looking at Africa and Latin America since 1979
> makes me think that debt forgiveness is essential...
>
>
> Brad DeLong
>
>
-- Rosser Jr, John Barkley rosserjb at jmu.edu