pe from centrally-planned socialist economies to market economies. The primary focus in this review is on Poland. The experiences of the Czech Republic (an example of a successful transition) and Romania (an example of a problematic transition) also are reviewed as a means of placing the Polish experience in context.
Economic efficiency at the societal level is defined as the production of the combination of outputs with the highest attainable total value, given the resource limitations of the society (Byrns & Stone, 1995, p. 16). Some economic theorists equate economic efficiency with the concept of Pareto Optimality. The concept of Pareto Optimality is derived from the Pareto Criterion, which holds that an increase in total welfare occurs when someone is made better off, while no one is made worse off, which is different from Pareto's definition of maximum efficiency for a society (Byrns & Stone, 1995, p. 502). A state of maximum efficiency in a society, according to Pareto, is a situation wherein it is impossible to increase the happiness of one individual without decreasing the happiness of someone else. The remainder of this essay examines the claim that Pareto Optimality describes accurately the concept of economic efficiency.
If one accepts the contention that Pareto Optimality describes accurately the concept of economic efficiency and, further, if one holds the position that economic efficiency exists within an economy, then the introduction of a change in resource allocation to provide for greater equality of opportunity, for purposes of illustration, will be viewed as one which requires a tradeoff between equality and efficiency. If, on the other hand, one holds the position that the existing allocation of resources within an economy is not perfectly efficient, then the introduction of a change in resource allocation may be viewed as a means of increasing total welfare.
Acceptance of the proposition that Paret...