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2T The Crisis of Communism: The USSR and the Soviet Empire, 1953–2000

Shock Therapy, Gradualism and Privatisation

  • 3 things to know
  • Component 2

Overview

Recall questions on the two approaches to economic transition, the methods used to sell state enterprises and the hardship that followed.

What you need to know

Answer each one before you reveal it.

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Key term

What was shock therapy in the context of post-communist economic transition?

Key term

Why did Eastern and Central European states seek membership of NATO and the European Union?

Key term

What political progress had most Eastern and Central European states achieved by 2000?

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    What was shock therapy in the context of post-communist economic transition?

    Model answer

    A rapid transition strategy involving immediate price liberalisation and mass privatisation, particularly adopted by Poland.

  2. 2

    Define gradualism as an approach to economic transition in post-communist states.

    Model answer

    An alternative approach involving slower and more managed reforms to reduce social disruption.

  3. 3

    What were the main methods used to privatise state enterprises in Eastern and Central Europe?

    Model answer

    Voucher schemes distributing shares to citizens, direct sales to foreign investors, and management buyouts.

  4. 4

    What economic difficulties resulted from the restoration of capitalism in Eastern and Central Europe?

    Model answer

    Rising unemployment, inflation, declining industrial output, and growing inequality.

  5. 5

    Why did Eastern and Central European states seek membership of NATO and the European Union?

    Model answer

    As guarantees of security and economic development through closer ties with the West.

  6. 6

    Which three countries joined NATO in 1999, and what was the significance of this expansion?

    Model answer

    Poland, Hungary, and the Czech Republic; this represented the first eastward expansion of NATO into former Warsaw Pact territory.

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