Privatization — the transfer of state owned and managed enterprises into the hands of the private sector — is a central task for the emerging democracies of Central and Eastern Europe. This process, which requires the untangling of 45 years of state control and management, is even more difficult than was earlier imagined because of the parallel legacy of 45 or more years of environmental neglect.

Poland, the largest of the Central European countries, has embarked on an ambitious privatization program. Beginning just over 18 months ago, Polish authorities have leased an estimated 70 to 80 percent of the country's small retail and commercial businesses to private individuals. Any visitor to Poland is keenly aware of the explosion of private sector activity as existing shops that have moved into private hands adapt to consumer needs, and new shops open with an increasing variety of goods.