Globalization and Transformation in Central European Countries: The Case of Poland

Political and economic transformation in Central European countries (CECs) coincided with speedy globalization founded on innovations and technological progress. On the one hand it created great opportunities, but on the other, globalization threatened the position of various sectors of the economy and their stakeholders who suddenly found themselves exposed to stiff competition. In the post WWII years, despite their apparent comparative underdevelopment and general low productivity, the CECs built up a rudimentary egalitarian welfare state. There were high economic and social differences, but these inequalities were not openly exposed. Political and economic aspirations of Polish society organized in the first Solidarity movement clashed in 1989 and in the years that followed with the reality of a rapidly globalized economy. Liberalization, compression of time and distance due to swift technological changes – being the main building blocks of globalization – led to profound changes in the labor market. It brought higher income and wealth dispersion, and consequently led to wide-ranging uncertainty. These trends were even more magnified by the entrance of the People’s Republic of China and other Asian developing countries into world trade and capital flows. The demand and supply shocks related to their new economic presence sent shockwaves to the whole global economy and made CEC economic transformation more complicated and difficult. In the global context with a dominant liberal approach the role of modern states had been reduced and its tasks became focused on the provision of a stable monetary and regulatory framework facilitating economic agents’ expectation formation. In this context regional, economic and political integration was seen as a viable strategy for national interests protection. Consequently CECs, at the outset of structural reforms expressed their willingness to join the European Union (EU) and its Single European Market (SEM) that was launched in mid 1980s and completed at the beginning of ...