What is Shock Therapy? What Did it Do in Poland and Russia?

Abstract A prominent theorist of Soviet and East European economics critiques the vision of political and economic processes implicit in shock therapy, defending an alternative, evolutionary approach. The critique of shock therapy rests on both theoretical reasoning and examination of evidence from recent cases. An intensive study of economic change in Poland and Russia since the late-1980s concludes that, in both countries, shock therapy failed in its goal of implementing top-down reforms that by-pass existing political and social forces. The evolutionary approach, it is argued, holds the better prospect of generating economic progress that will be sustained over the long term. Journal of Economic Literature, Classification Numbers: E61, L33, P21, P51.