LOOKING BACK from the end of a decade of reform in Eastern Europe and Eurasia, Poland stands out as an example of successful transition. Poland was one of the first countries to tame inflation; it was the first country to begin growing again; and, by 2000, it was one of a handful of countries that had higher levels of GDP after the transition than before it began. In 1990, however, Poland did not look like a likely success story. Poland began the decade in the throes of an economic crisis, with long lines for basic products, a crushing debt burden, soaring inflation, a vibrant black market, and collapsing demand for its exports. Polish industry was hopelessly addicted to cheap energy subsidized by the Soviet Union, and its products were so poor in quality that they were in demand nowhere else. In the early years of the transition the bold Polish reform program appeared likely to be derailed by a fractious parliament, a disgruntled populace, and a series of fragile coalition governments.
Poland owes its success to the remarkably consistent pursuit of a set of economic policies that accelerated economic reform, imposed tight budget constraints on firms, and tamed inflation. In one respect, Poland's historical legacy was advantageous: Poland entered the decade with a broad popular consensus that everything associated with central planning and Soviet-style socialism was anathema. After years of martial law, the Poles were prepared to suffer in order to break away from Soviet imperialism, and they were grimly determined to make their way to the West, whatever the cost. In another sense, however, Poland was disadvantaged by the need to break new ground for democracy in Eastern Europe, because it was saddled with dysfunctional political institutions. The roundtable agreement that ultimately brought the first Solidarity government to power in August 1989 also left it with a Communist president and a parliament that was only partially elected under democratic procedures. This parliament, in turn, wrote the election law used in 1991, and the result was a fragmented legislature. Polish governments were compelled to cobble together improbable coalitions and lurch from crisis to crisis. Meanwhile, the famous Polish consensus on economic reform barely outlasted the first year of transition. It is a remarkable achievement, under the circumstances, that a suc-