Window of Opportunity

Window of Opportunity Finance & Development, June 2017, Vol. 54, No. 2

Leszek Balcerowicz explains why it’s important to move quickly when citizens are willing to embrace change

LESZEK BALCEROWICZ, the architect of Poland’s transition to a free-market economy, began studying ways of reforming the country’s Soviet-style system in the 1970s. He later became an advisor to the Solidarity trade union movement. For two years starting in 1989, Balcerowicz served as finance minister and deputy prime minister under Tadeusz Mazowiecki, who headed the first noncommunist government in Eastern Europe since World War II. Balcerowicz again assumed those posts from 1997 to 2000 and served as central bank president from 2001 until 2007. He holds a PhD in economics from the Central School of Planning and Statistics in Warsaw (now the Warsaw School of Economics), where he still teaches.

In this interview with F&D’s Chris Wellisz, Balcerowicz recalls the intensity of his first stint as finance minister and tells how he sought to overcome the obstacles he encountered by exploiting a narrow window of “extraordinary politics.”

F&D: In the 1970s you put together a team of economists to study ways to reform the existing socialist system. You said this work was like a hobby, because the prospect for reform seemed slim. Then martial law was imposed in December 1981. What happened next?

LB: After the introduction of martial law there was no hope for any major reforms. … However, we continued our work, but this time without any limitations. So we studied privatization, liberalization, fiscal reforms. … We, of course, did not assume that this would be useful in our lifetime.

F&D: Then came the so-called Round Table talks between Solidarity and the Communist government, which were followed by elections that resulted in a new government under Mazowiecki. You have said you would take the job, but only under certain conditions. What were they?

LB: First, that the economic reform would be massive, rapid, and radical. Second, that I would enter the government with a group of people, the team. Third, that I would chair, as the deputy prime minister, the economic committee of the council of ministers as a sort of coordination device of all the economic ministries. At the same time, I accepted the position of minister of finance. And, fourth, that I would have a say in who would take the economic portfolios.

F&D: What was your assessment of the economic situation?

LB: [It]...