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Why Polish Experiment Has Stalled? Ireneusz
Jablonski Freedom, Commerce, and Peace A
Regional Agenda CATO Conference Tbilisi, Georgia
October 25-27, 2006
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Ireneusz Jablonski WHO I AM Vice-president of
Adam Smith Research Centre the oldest free
market think-tank in Poland founded in
1989 Chairman of the Chapter at Civil Society
Project Lodz the leading conservative
network organization in Poland established in
2002 Professional activity financial and
banking top management
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INTRODUCTION The economy should be
considered as a social phenomena rather than a
mechanical one. (K. Dzierzawski, CAS)
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PILLARS OF POLISH ECONOMIC TRANSFORMATION

• The law on business activity (January 1989)
• First free elections in communist block (June
  1989)
• Introduction of credible, convertible and solid
  national currency
• (1990)
• 4. Set of legal acts (The Bill) demolishing the
  socialist economic law
• (1990/91)
• 5. Eruption of entrepreneurship enthusiasm in the
  Polish society

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• EFFECTS OF REFORMS
• 1. Number of active entrepreneurs

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• EFFECTS OF REFORMS
• 2. Poland GDP Growth

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• EFFECTS OF REFORMS
• 3. Level of inflation

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WHY THE POLISH EXPERIMENT HAS STALLED?

• Negative changes in economic laws restricting
• economic freedom in a high degree.
• 2. Significant increase of labor costs both
  financial
• and administration ones.
• 3. General increase of fiscal burden, resulting
  from growing
• taxes and obligatory benefits put on
  entrepreneurs.

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WHY THE POLISH EXPERIMENT HAS STALLED?
The culminating point of those destructive
actions which Polish economy was facing there was
a political decision of the need to cool down
the economy (decreasing of domestic demand) taken
in 1998 by the Deputy Prime Minister in charge of
economy who was supported in this respect by then
President of National Bank of Poland (NBP).
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• EFFECTS OF POLITICAL INTERVENTION
• 1. Increase of legal acts new regulations

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• EFFECTS OF POLITICAL INTERVENTION
• 2. Increase of public administration

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• EFFECTS OF POLITICAL INTERVENTION
• 3. Increas of unemployed people / FDI growth

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CONCLUSIONS Each economy is given its own,
appropriate potential of growth. Economic growth
not stagnation or slump is the natural status
for economies of this part of the world. The pace
of growth will depend on various objective
factors already reached level of economic
development, demography, mentality of particular
society. Subjective factors, such as tax system,
macro-economic situation, quality of economic
legislation and efficiency of governmental and
generally state organs influence the degree in
which such potential of growth will be utilized.
(K. Dzierzawski, CAS)
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CONCLUSIONS In practice Polish society
proved the correctness of the status spontaneous
order known from the times of XVIII century
together with law discovered by Adam Smith that
work is the source of nations wealth.
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CONCLUSIONS Recent experiences of Ireland,
Baltic republics, Poland (from the 1st part of
the 90s) and those of South Korea, Taiwan,
Hongkong and Chile prove that poor but ambitious,
energetic and enthusiastic societies can reach
wealth and welfare on their own and in quite a
short time, inspiring respect and admiration of
the whole world.
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THANK YOU Ireneusz Jablonski i.jablonski_at_projektl
odz.pl Freedom, Commerce, and Peace A Regional
Agenda CATO Conference Tbilisi, Georgia
October 25-27, 2006