Historical path dependence, institutional persistence, and transition to market economy: The case of Poland

The paper deals with the impact of long-term persistent interregional disparities on the performance in transition to market economy. In the case of Poland, owing to the turbulent history, partitions and geopolitical displacements, the main institutions were shaped both by the country's traditions and various foreign impositions. First, it is shown that to a large extent, the substantial interregional discrepancies which widened in the 1990s can be traced back to a distant past. Second, we point out that those regions which inherited a higher overall economic development, superior physical infrastructure, and high endowment in social capital, have better performed on the way to market economy. Third, we advance the explanatory model of historical path dependence that includes both self-reinforcing and reactive historical sequences, and either homogenizing or diversifying external shocks. Finally, we argue that the social capital has been preserved in the form of community norms and customs.