ABSTRACT

This chapter sheds new light on the peaceful democratic transitions from communism in Poland and Hungary in the late 1980s by examining the International Monetary Fund's (IMF's) relations with the two countries. Within the national historiographies of the Polish and Hungarian transitions, scholars have seen evidence of "negotiated" or "rationed" revolutions, as the communist regimes of each state worked with elite elements of the opposition to broker power sharing agreements. In contrast to prevailing historiography, the chapter argues that the countries' troubled sovereign debt positions were significant causes of the political transitions in Warsaw and Budapest. Utilizing newly released archival material from the IMF's archive in Washington, DC, it argues that the two governments embraced roundtable democratization as a means of imposing austerity without unleashing social unrest. The chapter further argues that communism came to an abrupt and peaceful end in Poland and Hungary because the governments used political liberalization to gain society's acceptance of economic discipline.