When Central and Eastern Europe (CEE) transitioned from communism to Western-style capitalism, Francis Fukuyama announced the “end of history” (Fukuyama, Francis. The End of History and the Last Man. New York: Simon and Schuster, 2006). The future of the region was prophesized to be serene. In his recent book, 30 years after these events, Marcin Piatkowski investigates the aftermath of this momentous transition, taking Poland as a representative of the region. The author argues that since the fall of communism in 1989, Poland has experienced an unprecedented period of economic growth and development that propelled the country from low- to high-income level. Piatkowski states that the income gap between Poland and Western Europe is currently the narrowest in history. This economic expansion, comparable in its pace with that of the Asian tigers, occurred due to construction of inclusive economic and political institutions. Communism dismantled the extractive “feudal” institutions that stifled economic growth for centuries and were the cause of the CEE’s underdevelopment. Between 1990 and 2004, Poland had to align its institutions with the Western ones to become a member state of the European Union (EU). This included promotion of the western-style rule-of-law, democratization, free press, and open society, among others. This institutional change was successful because both Polish and Western elites supported the convergence, which, according to Piatkowski, was unprecedented. Piatkowski argues that to continue the economic expansion and narrow the income gap, Poland, as also the rest of the CEE, needs to continue straightening the “right” institutions and follow a set of neo-liberal policy principles that the author dubs as “the Warsaw Consensus.”

Piatkowski’s book can be divided into four distinctive parts. Chapter 1 introduces institutions, culture, and ideas as fundamental sources of growth. The author introduces the framework developed by Daron Acemoglu and James A. Robinson (Why Nations Fail: The Origins of Power, Prosperity, and Poverty. New York: Crown Books, 2012) as the workhorse of the analysis. Piatkowski summarizes the main literature in institutional economics and provides a bounty of information from the World Bank’s database to highlight the main points about the importance of the rule-of-law and democracy for the economic development in the long run. This chapter sets the stage for the following parts of the book that place institutions at the core of the analysis.

Chapters 2 and 3 compose the historical part of the book. They deal with the economic underperformance of the Polish-Lithuanian Commonwealth in the early-modern period and the economic impact of communism, respectively. Piatkowski argues that because old Poland was politically dominated by the landed gentry (szlachta), it developed institutions that extracted the wealth from the peasants and stifled urban growth to prevent political competition. Piatkowski argues that serfdom, surplus extraction, rent-seeking culture of the elites, and low state capacity, were the key causes of the long-term underdevelopment. The growth hampering institutions and power-relations persisted until they were first weakened by Prussia, Austria, and Russia, that partitioned Poland in the late eighteenth century, and, finally, dismantled completely by communism in the twentieth century.

The historical part of the book serves as the backdrop for explanation of the Polish economic success induced by the transition from communism to capitalism in the 1990s outlined in Chapters 4–7. These sections form the core part of the book and are supported by well-developed argumentation and backed by a plentiful empirical evidence. Piatkowski, argues that Polish real GDP per capita increased by 126 percent between 1989 and 2016. As a result, it moved from 31 percent to 57 percent of the Western average, the closest value since the first available estimate for 1400. Piatkowski attributes this success to a range of factors, most important being institutions, financial regulation, education, and culture. He argues that crucial pro-market reforms were already undertaken in the late 1980s. The chapters offer a nuanced analysis of the political and economic trade-offs related to the privatization of the state enterprise and underscore the crucial importance of the broad societal consensus that was necessary to undergo the transition. The support of the post-communist elites (that was absent in many other CEE countries) was vital. This section offers a very positive interpretation of “shock therapy,” that, despite its high societal costs, led to sustained growth in GDP. Piatkowski argues that the most crucial factor determining the transition’s success was the goal of joining the EU, which required the reforms. Furthermore, since European membership includes steep penalties for dismantling such institutions, according to Piatkowski, Polish elites are unlikely to reverse the process of conversion in the future. The last part of the book proposes a set of policy recommendations that would allow the other CEE countries to replicate Polish economic success and propel the country further.

The book’s main strength is the range of empirical information on Polish comparative economic development since the transition. It offers an in-depth analysis of multiple aspects of growth and is most suitable for a handbook for a course on CEE’s contemporary comparative development. Moreover, the argument produced by the author is elegant and well-rounded. The book is very well structured and provides a clear explanation as to why East-West economic convergence occurred after 1989 and not before.

The breath of the book is also the source of its main weakness. Because its focus spans over 600 years, the book cannot explore every argument in sufficient detail. The book’s main shortcoming is the brief historical section covering the pre-1989 period, which is based on the conventional explanations of the Polish historical underdevelopment. More recent revisionist interpretations have little reflection in the narrative, even though the author cites them (e.g., Vonyó, Tamás, and Alexander Klein. “Why Did Socialist Economies Fail? The Role of Factor Inputs Reconsidered.” The Economic History Review 72 [February, 2019]: 317–345). The book does not mention the competing views on serfdom that see it as an efficient response to, for example, poor market conditions, that themselves where the prime cause of underdevelopment (see, for instance, Ogilvie, Sheilagh, and Andre Carus. “Institutions and Economic Growth in Historical Perspective.” In Handbook of Economic Growth, Vol. 2, edited by Philippe Aghion and Steven N. Durlauf, 403–513. Burlington: Elsevier Science, 2014; Malinowski, Mikołaj. “Serfs and the City: Market Conditions, Surplus Extraction Institutions and Urban Growth in Poland, 1500–1772.” European Review of Economic History 20 [May 2016]: 123–46). Second, due to the concise analysis, the section often merges distinctive time periods together and, by doing so, misses important nuance. For example, Polish parliamentary institutions in the sixteenth century were arguably the most democratic in Europe and succeeded in promoting growth, during the country’s so-called Golden Age (e.g., “Economic Consequences of State Failure—Legal Capacity, Regulatory Activity, and Market Integration in Poland, 1505–1772.” In this Journal 79, no. 3 [September 2019]: 862–96). The period of political crisis only begun in the second-half of the seventeenth century. Piatkowski, also treats the political elites as a monolith. Polish politics has long been defined by the struggle between pro-Western and Eastern forces that envisioned different kinds of institutions. In fact, the conflict between progressive and conservative factions led to the late eighteenth century partitions.

Moreover, the analysis of Polish comparative development, that is at the core of the book’s argument, is based primarily on GDP figures produced by Mikołaj Malinowski and Jan Luiten van Zanden (“Income and Its Distribution in Preindustrial Poland.” Cliometrica 11 [September 2017]: 375–404). Piatkowski uses them to show that, for most of its history, Polish living standards were less than half of the Western ones. Although, Piatkowski labels the historical GDP series as Poland, they are based on the region of Cracow. As a result, he effectively compares a mid-level region with England and Holland, the economic engines of the United Kingdom and The Netherlands. Therefore, historical Western values (based on unweighted averages of just four countries) are overestimated, which suggests a much narrower income gap than proposed by Piatkowski and challenges his late conversion argument. It is noteworthy that alternative evidence based on real wages paints a very mixed picture of East-West economic divergence and even suggests a convergence in the sixteenth century (see, e.g., Van Zanden, Jan Luiten. “Wages and the Standard of Living in Europe, 1500–1800.” European Review of Economic History [May 1999]: 175–197; Malinowski, Mikołaj. “Little Divergence Revisited: Polish Living Standards in a European Perspective, 1500–1800.” European Review of Economic History 20 [September 2016]: 345–67). Lastly, although the book offers a powerful narrative, it leaves opportunities for future scholars to identify the impact of institutions empirically and offer precise historical mechanisms via which each specific institution impacted the economy. At this point, the supposition that it was the institutions that caused the growth is based on compelling anecdotal evidence and stems from the New Institutional Economics’ paradigm.

The author paints an entirely optimistic picture of Polish economic history in the past 30 years. Current political developments in Poland can be interpreted as a backlash to the transition. Transfer of state companies to foreign capital owners at discounted rates (see, Dunn, Elizabeth. Privatizing Poland: Baby Food, Big Business, and the Remaking of Labor. Ithaca-London: Cornell University Press, 2004), slow growth in real wages, rising inequality between rural and urban areas, and clash between progressive and conservative values (e.g., gay rights) are the bases of the support for the conservative-populistic Low and Justice (PiS) government that already undermines some of the institutions that were built during the transition (e.g., constitutional tribunal). Some of these issues are briefly mentioned in the book. However, the perspective of those who see Polish expansion as something other than a “success” deserves attention. The undergoing changes in income distribution clearly show that the gains from the transition were not shared by all. This undermines the social contract that underpinned the transformation. Current developments prove that “history has not yet ended” and that without a clear understanding of forces driving the society we risk it taking a “wrong” turn.