Polish Economic Policy and Western Economic Leverage

This Note considers ways in which Western policy can influence the Polish economic debate. Western leverage in Poland is limited, as that country lies in the overwhelming political, economic, and military shadow of the Soviet Union. Nonetheless, economic policy instruments have some potential for influencing economic and other policies in Poland. Two Western economic policy goals stand out: the eventual servicing of the Polish hard-currency debt and the implementation of a more efficient, market-based economic system within the country. The latter would make it easier for Poland to service its debt and could lead to increased trade and, possibly, a more open political system. Western economic leverage appears to lie in its willingness to ease Polish debt repayment and to lower barriers to Polish exports, accomplished perhaps by trading concessions for concessions. International institutions not representing national policy interests would be best situated to provide pressure in the desired direction.