With the exception of Belarus, the Eastern European states adopted shock therapy. Nearly all of these post-Soviet states suffered deep and prolonged recessions after shock therapy, with poverty increasing more than tenfold.Study Finds Poverty Deepening in Former Communist Countries, New York Times, October 12, 2000 The resulting crisis of the 1990s was twice as intense as the Great Depression in the countries of Western Europe and the United States in the 1930s.See “What Can Transition Economies Learn from the First Ten Years? A New World Bank Report”, in Transition Newsletter, pp. 11-14.Who Lost Russia?, New York Times, October 8, 2000 The hypothesized one time jump in prices intended as part of shock therapy actually led to a lengthy period of extremely high inflation with a drop in output and subsequent low growth rates. Shock therapy devalued the modest wealth accumulated by individuals under socialism and amounted to a regressive redistribution of wealth in favor of elites who held non-monetary assets. Contrary to the expectation of shock therapy proponents, Russia's rapid transition to the market increased corruption, rather than alleviating it.
