Poland's debt reduction certainly helped, but was not the end all and be all. Hungary did not have one and has been doing nearly as well as Poland. Of course they had very different strategies vis a vis privatization which were related to this issue. Hungary has emphasized selling off its assets to foreign multinationals as its way of privatizing. This is also more gradual than the instant privatization voucher schemes pushed by our Bates Medal Winner, Shleifer, that have been such miserable failures in the CR and Russia. But one at least gets a fresh injection of finance, new tech, access to foreign markets, and managerial restructuring out of it.
OTOH, Poland has been much more leary of opening to foreign direct investment, with much of that related to a residual fear of German domination. (Much of the fdi in Hungary has come from the much less scary Austria, associated nostalgically with the Habsburgs).
The issue is that the debt reduction in Poland made potential foreign investors more leary of going into Poland. But that was just fine with the Poles. The Hungarians wanted fdi and thus have put up with continuing to make high interest payments on their left over debts from their days of Kadaresque "goulash communism" and soft budget constraint market socialism.
BTW, the CR and Slovakia did not have this legacy of foreign debts or of hyperinflation as the starting point of their transitions was that of a very rigid command socialism. Barkley Rosser -----Original Message----- From: Doug Henwood <dhenwood at panix.com> To: lbo-talk at lists.panix.com <lbo-talk at lists.panix.com> Date: Monday, May 03, 1999 2:17 PM Subject: Poland
>J. Barkley Rosser, Jr. wrote:
>
>>Curiously, Poland, which you pose as a highly reformed
>>economy (and it is) has been much slower to privatize.
>
>Poland also got a 50% debt cancellation, no? How important was that?
>
>Speaking of Poland, Wojtek, I'd like to hear your opinion of the early
>1980s Solidarnosc.
>
>Doug
>