Poland provides a clear example of how robust democracy and low levels of political polarization can promote rapid economic and institutional reform. In the 1990s, a social democratic ex-communist party committed to building a market economy with a generous welfare state and a fractious liberal camp of parties committed to building a market economy with a smaller welfare state competed for power. This arrangement of political forces and institutions suggests that Poland should have experienced rapid economic and institutional reform, relatively consistent reforms, a burgeoning new private sector, and generous social welfare programs.

These expectations have largely been borne out. With little evidence of deep polarization on economic issues across the old-left–right divide, successive governments in Poland had weak incentives to conduct fire-sale privatizations or grant the types of massive tax breaks characteristic of right governments in far more polarized Russia under Yeltsin.