Different Choices, Divergent Paths: Poland and Ukraine

While Poland had the shortest and mildest transformation recession among CEE countries, and then took off, Ukraine’s economy has been stagnant, or in decline, since 1990. We compare their growth trajectories, stressing the role of qualitative factors such as education, governance, and institutions, asking whether the EU perspective and NATO membership played a role. We discuss the closely related histories of the two countries and note the stark differences between them, including their different approaches to the EU versus Russia, full versus incomplete transition to a market economy, and democracy versus anocracy, as well as different initial conditions. We use economic as well as social indicators and try to disentangle efficiency and accumulation and combine path dependence and the role and scope of creative destruction.