Three phases in the growth of the private sector in Poland since 1985 are identified: until the end of 1989, distorted and slow growth; 1990 rapid service sector development; and from 1991 rapid balanced growth. Poland has achieved massive private sector development with minimal privatisation of state enterprises: the key cause has been macroeconomic stabilisation. Very small availability of credit has not prevented this rapid growth, suggesting the unimportance of credit and financial markets in the early years of transition.

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July 1993     Paper Number CEPDP0159