A Privatization Test: The Czech Republic, Slovakia and Poland

The nations of the former Communist bloc face a task unparalleled in the annals of world history. By promoting allocation of market resources based on politics and social policy instead of economic efficiencies, the former regimes created economies of inefficiency. Committed economic reformers face the task of reallocating resources from inefficient producers dependent on government monies to competitive independent market players. This transformation is known as privatization. Privatization is an arduous process, which cannot be accomplished all at once. By shifting assets from uncompetitive players to competitive ones, privatization will impose economic hardship on the public, which will demand the relief it is accustomed to receiving from political leadership. Often, the reformers do not know how to garner public support for privatization. Positive results will emerge only after long-term sacrifice by the people. This article will identify eight requirements for a successful privatization program and discuss the privatization efforts of the former Czechoslovakia, its successor states, and Poland, comparing them and evaluating them against the eight criteria. A PRIVATIZATION TEST: THE CZECH REPUBLIC, SLOVAKIA AND POLAND