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Comparison of the economic performances and the social policies of Poland and Czech Republic

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Since the collapse of communism, Polish inhabitants have experienced a serious identity crisis. Their habits, manners and customs were changed overnight to meet the political criteria and economic transition to a market economy. The public is unsettled about the alternative economy, that is, the market economy, as highlighted by the forbearance for the referendum to join the European Union with nearly 50% of votes. Historically and geographically closer to the Western European countries, it is almost a part of the Czech Republic, by the customs and manners of its inhabitants. This helps to establish a more conducive social dynamic system for the establishment and strengthening of the market economy. Czech Republic was born in 1993 with the division of Czechoslovakia. It has a very homogeneous population and has implemented the transition to a market economy. This dynamism is considered most favorable to its contention in the European level (it is among the organization's most promising new members on many points) and in the world.

Barter economy -
Poland: In 2005, agricultural land occupied 59% of the area of the country, 16 million hectares: Poland occupies fourth place in the EU after France, Germany and Spain in terms of agricultural area. 39% of the population is in rural Poland and nearly a quarter of the workforce is agriculture based, while the agriculture, forestry and hunting make up only 4.2% of GDP (4.4% in 2000). In addition, 88% of the land are held by individual farms, which partly explains the low profitability of this sector in the economy. Therefore we can deduce that the barter economy in Poland is likely to be an important part of rural transactions between small producers. This therefore hinders agricultural reforms to modernize the Polish economy.

Czech Republic: In recent years, the share of agriculture in GDP in the Czech Republic and its share in employment remained relatively stable: 4%. In addition, only 25% of agricultural land is used by individual producers (farms of less than 3Ha in general), which limits the development capacity of the barter economy. However, nearly 25% of the population still lives in rural communities with fewer than 2,000 inhabitants. Thus, if the economic figures of the Czech Republic are similar to those of the major developed countries, the number of people living in the country is conducive to the establishment of a barter economy slowing market access.

Informal economy - The informal economy includes all undeclared lawful activities (primarily domestic) and all the illicit production of goods (eg. drugs) or services (prostitution). These activities are difficult to quantify exactly, the OECD. We propose an evaluation grid closest to reality.

Poland, meanwhile, is experiencing a resurgence of the informal sector which affects the establishment of a market economy. On the other hand, the part of some illegal activities such as prostitution (0.20%) or smuggling and resale of stolen goods (0.21%) in the country's GDP highlights a weakness of policies to fight against these deviations.

Tags: social policies of Poland and Czech Republic, informal economy, barter sustem

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