How does a country overcome the challenges of the “dual transition,” or the movement from a planned to a market-based economy, while also building a democratic political structure? That is the central question addressed by this book. The authors challenge the earlier scholarship that doubted the likely success of simultaneous marketization and democratization. Since economic reforms impose high costs on existing politically powerful sectors (such as state-owned firms and agriculture), the argument went, groups associated with these sectors will oppose reforms, making transition difficult. Ironically, the more open the political system, the more it is open to the demands of sectors that lose out because of economic reform, thus threatening democracy.

The authors argue that a dual transition is possible if strategies are adopted that encourage the entrance of a number of small domestically owned firms, as opposed to large-scale privatization that concentrates ownership in the hands of a few oligarchs (as in Russia). In particular, they contend that in Poland, the rapid creation between 1991 and 1997 of a large number of domestically owned firms (largely under the leadership of the reformed communist successor party, the Social Democracy of the Republic of Poland, SdRP, and its successor, the Democratic Left Alliance, SLD) laid the basis for future political reforms. Although there was a great deal of economic pain caused by privatization (particularly employment), as the reforms proceeded, those that successfully adapted emerged as a supportive constituency for further reform.

Using Poland as a “theory-building” case study, the authors first outline their argument in the introductory chapter. In Chapter 2 they provide a detailed description of the changes that occurred and the political events that defined the period of rapid transformation from 1991 to 1997. Chapters 3 and 4 explain quantitatively regional variations in the Polish economy, noting that the transformation did not proceed evenly across the regions. These regional variations centered on whether the regional economy depended upon large state enterprises and/or agriculture. These two sectors especially were affected negatively, and then produced constituencies that opposed reforms. However, the number of beneficiaries of reform increased dramatically as a result of the entrance of numerous small and medium-sized firms that provided employment opportunities for many Poles. These differences translated into differences in voter support of the parties, and as the reforms proceeded, the constituency in favor of liberal reform grew.

The growth of the reform constituency had a profound effect on the political landscape in Poland. The rapid growth of this constituency is what compelled the governing communist successor SLD to follow pro-reform economic policies between the elections of 1993 and 1995, although it had opposed such reforms earlier in the 1990s. Thus, the authors contend that the growth of the reform constituency provided an incentive for parties and candidates to constrain their positions.

The formula for a successful dual transition is summarized in Chapter 9—the key is to privatize in such a way as to allow for the rapid entry of a large number of new small and medium-sized privately owned enterprises. These new enterprises provided more consumer products, new organizational cultures, and a labor force that had adapted to new organizations and technologies. The new enterprises thus stimulated the growth of political constituencies that voted for reformist parties, and compelled other parties to compete for their votes. It was only when the entry of new firms slowed after 1998 that the Polish transition faltered, lending support for antiliberal parties on both the Left and the Right.

Although this is an important book, I do have a few minor criticisms. Primarily, I think that a political “precondition” is missing from this analysis. That is, the SdRP (and its successor, the SLD) was able to move from being relatively anti-reform to relatively pro-reform, largely because it had already become dominated by pro-reform communists grouped around Aleksandr Kwaniewski prior to the end of communist rule. Indeed, unlike many other communist parties in the region, the reformists had won the internal struggle within the Polish United Workers' Party in the late 1980s, making them far more receptive to reform and electoral incentives than other more hard-line communists. Had the party been dominated by conservatives (as was the case with the Czech Communist Party), they would certainly have been much less inclined to move as far as they did in support of both economic reform and, ultimately, political democracy. To what extent, then, does the legacy of the previous regime and the transition process have an impact on negotiating the challenges of the dual transition?

Second, and related to the previous point, I am not entirely sure that the SLD was the primary party that threatened reform in the 1990s, nor that it was they who had to be “convinced” to accept economic reforms. As in Hungary with the MSzP (the Hungarian Socialist Party), the SLD was more likely to be led by Western-oriented “modernizers” than by the leaders of the Right. Although I think it is correct to argue that the growth of the reform constituency pushed the SLD toward more reform, it was already predisposed to doing so, at least more so than was the Polish Right, which had historically tended toward statism, nationalism, and xenophobia/Euroskepticism. This, of course, raises an additional question: Will this political stability and deepening of reform continue, given the current antics of the Polish Right and the political climate under the Kaczynski presidency (although this may change with the recent parliamentary electoral victory of Donald Tusk and the Civic Platform Party).

Despite these minor criticisms, this is an interesting and important book. It provides a persuasive argument regarding how Poland overcame the challenges of the dual transition, and it also provides important guidance for “democratizers” and policymakers as to how to proceed with simultaneous economic and political reform. This will undoubtedly be important for students not only of postcommunist Europe but also of African, Central Asian, and Middle Eastern countries as these countries embark on the difficult “dual” journey toward markets and democracy.