Institutional Aspects of the Unfinished Privatization in Poland. An Essay

Abstract

Theoretical background: This article explores the institutional dynamics underlying Poland’s long-term retreat from privatization and the resulting persistence of a sizable state-owned enterprise (SOE) sector. The theoretical background integrates institutional economics and political economy perspectives on rent-seeking, state capture, and varieties of capitalism, focusing on the Polish variant of state capitalism. The paper particularly engages with debates surrounding state ownership’s effectiveness under weak governance conditions and the institutional limits of post-communist reform trajectories.

Purpose of the article: The paper is not aimed at critiquing state ownership per se but to examine the conditions under which the continued presence and expansion of the state sector become detrimental to institutional integrity, economic transparency, and policy credibility. By revisiting the evolution of Poland’s privatization policy from the early 1990s to its official termination in 2016 – and its continued absence from the agenda through 2025 – the author seeks to illuminate the consequences of this policy shift for public accountability and rent extraction by political elites.

Research methods: The paper is a qualitative, interpretive institutional analysis. It synthesizes policy documents, statistical data, and academic literature to trace ownership transformation patterns, evaluate state control's persistence across sectors, and analyze the link between political incentives and the instrumental use of SOEs. The author also draws on comparative frameworks to contextualize the Polish case within broader trends in post-communist economies.

Main findings: The study suggests that Poland’s unfinished privatization has contributed to the entrenchment of a politicized and inefficient model of post-communist capitalism. While the private sector has grown dynamically, the SOE sector has remained a locus of political rents, clientelism, and institutional degradation. Successive governments across the ideological spectrum have found political utility in preserving control over SOEs, which has, in turn, undermined public oversight and stalled further reform. The author concludes that, under Poland's current institutional conditions, a carefully reintroduced privatization agenda – depoliticized and supported by governance reforms – may be necessary to curtail rent-seeking and revitalize the reform process. The article calls for renewed debate on the appropriate role of the state in the enterprise sector and invites reconsideration of privatization – not as an ideological commitment but as a pragmatic tool for limiting institutional dysfunction under conditions of limited public oversight.