Most analyses of post-communist transitions have paid little attention to the contemporary political and economic problems of social insurance reform in Eastern and Central Europe. Contrary to early predictions of many observers, the official embrace of free market liberalism by the new political elites in Poland during 1989-1993 did not lead to radical cuts in social spending across the board. Instead, the continuation of old policy patterns and adherence to traditional, pre-1989, criteria for benefit distribution contributed to the unprecedented expansion of public expenditures in relation to the GDP. In the mid-1990s failure to implement radical institutional reforms of the social insurance system has emerged as a major threat to political and economic stability in Poland.

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