In 1989 Poland took the lead among Eastern European countries in transition toward democratic market economics. However, the arrangements that led to the political changes also created an unstable situation, which has been dramatized by recent political developments. The Mazowiecki and Bielecki governments managed to engineer the courageous reforms of 1990 and maintain reasonably good overall macroeconomic conditions. Starting from mid-1991, however, the Bielecki government became increasingly unable to introduce and pass through parliament important economic and political reforms. Agreement on, and execution of, policies became even more difficult as a result of the political instability that followed the October 1991 parliamentary elections, which left Poland with a parliament splintered among 29 parties, with no clear coalition or majority in sight.

It took two governments and several months of virtual political paralysis before a centrist coalition could be formed under the leadership of Prime Minister Hanna Suchocka in July 1992. While the coalition did not enjoy a solid parliamentary majority, it did manage to survive important testsŃsuch as the waves of strikes in August and December 1992 and also secured enabling legislation for several crucial pieces of the reform agenda, particularly the Banking and Enterprise Restructuring Law, the multi-track privatization program, including the Mass Privatization program, and the 1993 budget. Despite these achievements, a motion of no confidence carried the Sejm on May 27, 1993. As a result, parliament was dissolved by President Lech Walesa, and new elections set for the early fall. While the political scene over the next few months is likely to be dominated by pre-electoral politics and posturing, the recently approved electoral law sets a minimum threshold for representation in parliament and may contribute to the emergence of a more stable political environment.