Welcome, this is your host Anastasia Glova, and you're listening to the April 12th episode of the Cato Daily Podcast.

Leschak Balsarovic, former president of the National Bank of Poland and Poland's former

Minister of Finance, is famous for implementing a program of economic transformation in the post-Soviet

Poland of the 1990s. The shock therapy pulled the country out of economic

collapse and transformed it into a robust market economy. In his speech at the Cato Institute this week, Mr.

Bolzorovich spoke about the economics and ethics of the welfare state. He's our

guest today. In constructing their welfare systems, which model have the post-Soviet countries followed?

Is it the one of continental Europe or the United States or the Nordic countries?

There was no uniform model common to all post-communist economists, and the situation has a difference.

In one group of countries, the economy collapsed along with the inherited communist welfare

state, and some of these countries have not tried to rebuild it.

They would group Georgia, Armenia into this category.

So these countries have nowadays spending to GDP ratio not higher than 20% and they are growing fast.

Not only because of the reduction of social spending but also because they are catching up.

Do they need to focus on constructing welfare systems in order to grow their economies? Is that even necessary?

I don't think if they want to grow fast they should rather look at the Asian Tigers, which have a limited

welfare state, but thanks to fast growth, they can have a more expanded private welfare state and there's also a larger

role for civil society to play.

But in most post-social countries, the state has not collapsed and this meant that the inherited

socialist welfare state was inherited, was preserved and these countries face a challenge to reform it, how to streamline the spending at the same time,

how to try to meet the challenges related to a market economy, meaning for example an introduction of some form of unemployment benefits.

And here the experience is mixed.

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