Eastern and Central Europe
National policies and a difficult economy slow but do not halt the growing use of credit markets by local governments.
Miguel Valadez and John Petersen
By most measures Poland has made a successful transition from
a centrally planned economy to a decentralized, market-based
system. This success is the product of several factors. Fiscal
management problems inherited from the centrally planned sys-
tem were reversed by a combination of technical assistance from
Europe and the United States, the incentives for reform created
by the desire for accession to the European Union (EU), and laws
enacted to satisfy EU criteria for public finance and organization.
Just as for Mexico and the North American Free Trade Area, the
proximity to the EU and the increasing integration with the EU
economy have provided incentives for well-framed regulatory re-
form and for competent and conservative fiscal management.
These factors, together with Poland’s robust economic perfor-
mance over the past decade, provide a stable foundation for de-
veloping local government capital markets.