BPEA | 1990 No. 2

Privatization in Eastern Europe: The Case of Poland

discussants: Lawrence H. Summers
Lawrence H. Summers Charles W. Eliot University Professor and President Emeritus - Harvard University

1990, No. 2

THE TRANSFORMATION of the Eastern European economies into market economies requires comprehensive action on three fronts: macroeconomic stabilization, liberalization of economic activity, and privatization of state-owned enterprises.’ Each of these is a monumental task. Nonetheless, privatization stands out as the most difficult and novel of the three, both conceptually and politically. There are enormous challenges in transferring state-owned property—which constitutes around 90 percent of industrial capital in Eastern Europe—to private hands in a manner that is rapid, equitable, and fiscally sound, and that accomplishes two fundamental goals: the efficient operation of the resulting private enterprises and the development of efficient capital markets.