Market Reform and Social Protection: Lessons from the Czech Republic, Hungary, and Poland
Market Reform and Social Protection: Lessons from the Czech Republic, Hungary, and Poland

Summary/Abstract: The countries of East Central Europe stand out as examples of the advantages of early and successful transitions to the market. Besides being early reformers, these countries also moved unusually quickly toward the establishment of broad social protection programs intended to cushion the shocks of the transition and to provide some longer-term protection against the uncertainties of the market economy. The success of these strategies has been uneven in terms of their impact on fiscal resources and their overall effect on the distribution of income. However, they must also be assessed in terms of the support they have generated for political and economic system among economically vulnerable but politically influential middle-class, blue-collar, and rural social sectors. In the countries of Central Europe, social transfers directed toward such groups have helped to win their acquiescence to painful adjustments and have facilitated longer-term support for democratic politics.

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