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We began with the question, Why Poland? The answer in Chapter 1 was based on comparing the pace and early success of the Polish reforms, both economic and political, with those of other transitional countries. The comparisons suggested that Poland was a relative success, at least in the initial years, and that we could learn important lessons about transitions from studying the Polish transformation in detail. This chapter addresses the same question, but with a different meaning. We can now interpret the question in terms of what factors explain Poland's relative success. We have observed and analyzed in great detail the more and less successful aspects and consequences of Poland's transition. According to this interpretation, the answers are unique in some respects but broadly general in others. The challenge is to examine factors contributing to the Polish transition in the context of other political economies in Central and Eastern Europe. LESSONS FROM THE POLITICAL ECONOMY OF TRANSITION The answer begins with the two main lessons from our study. Our analysis suggests that Schumpeter's model of economic development, though nearly a century old, is applicable in a broad range of settings. Successful development and transitions depend on what he called the creative destruction process in which firms with outdated technologies, organizational structures, or products are replaced by new enterprises embodying new forms. The presence and growth of these new enterprises stimulates a political constituency that supports liberal policies and continued economic reform. [ABSTRACT FROM AUTHOR]

Starting around 1880, the scope of social transfers widened. No longer were social transfers just classic poor relief. Wholly new kinds of social transfer programs emerged – redistributive pension programs, unemployment compensation, accident and disability compensation, public health for the poor, and housing subsidies. More and more countries initiated each kind of transfer. Why did the rise of social transfers happen so late in the long sweep of history, gathering momentum only late in the nineteenth century? Why did it then continue for one hundred years? What kinds of countries raised social transfers and the taxes needed to pay for it, becoming full-fledged welfare states? What forces made their political systems do this, when other countries held back? Why, after 1980, did the share of social transfers in GDP stagnate but not decline, despite the highly publicized conservative revolution led by Reagan and Thatcher? The history of social transfers since 1880 is explained largely by the same democratization that shaped the pre-1880 history of poor relief in Chapters 3 and 4 and the rise of public education in Chapter 5 and 6. Four other starring roles were played by population aging, globalization, income growth, and shifts in the social affinities felt by middle-income voters. A supporting role was played by a shift in Catholic attitudes toward government social programs. This chapter sketches how these starring and supporting roles help us interpret the delayed and partial emergence of the welfare state. [ABSTRACT FROM AUTHOR]

Having emerged as one of the world's leaders in public education by the start of the twentieth century, the United States continued to lead, at least enough to remain the world's top producer of knowledge. As Claudia Goldin has rightly emphasized, the twentieth century was the “American century” in education, first in the secondary-school wave and then in the postwar college boom. Yet over that century Americans became concerned about the quality of their children's primary and secondary schools, both when perceiving trends and when viewing international comparisons of test scores. In response to news that was mixed or worse, the United States has set up task force reports with names like A Nation at Risk and has passed legislation with names like No Child Left Behind. American writers came forth with an imaginative array of “usual suspects” in the perceived shortfall in American learning. Too much TV. Too many extracurricular activities. Bad diets and not enough exercise. Grade inflation. Fuzzy-headed liberal dilution of the curriculum with courses that do not teach the basics. Fluffy teacher-education courses. The rise of public-school bureaucracies. The rise of teacher unions and collective bargaining. Too many ill-prepared immigrant students. Urban decay. The breakdown of the traditional family. Stingy taxpayers. Before diving for explanations deep below the surface, however, we should first take soundings from the historical and international record, to map the basic factual contours. [ABSTRACT FROM AUTHOR]