ABSTRACT
The creation of a new private-sector economy in Poland is proceeding via two routes: privatization, understood as the transfer of state property to private actors; and the creation of new, or indigenous, private firms, usually of small size. The political and economic crisis of 1979-1982 produced a period of expansion for the private sector, as its share of the labor force increased from 4.4 to 5.9 percent. The economic reforms introduced during the 1980s evolved out of the political and economic crisis of the 1979-1982 periods. Facing catastrophic declines in income and output, the loss of the country's external creditworthiness, the political challenge posed by Solidarity and intense popular demands for change, the Polish United Workers' Party agreed in 1981 to introduce economic reforms". Prior to 1987, these reforms were directed primarily at the state and cooperative sectors. The rise of the corporation exacerbated the Polish private sector's traditional problems of corruption.
