The model of transition in Russia, Central Asia and East Europe that was influenced by World Bank and the IMF came to be known as :
Shock Therapy
The model of transition in Russia, Central Asia and East Europe that was influenced by World Bank and the IMF came to be known as Shock Therapy.
Shock Therapy
✅ Correct Answer: Shock Therapy
Explanation:
The model of economic transition adopted by Russia, Central Asia, and Eastern Europe in the 1990s, influenced by the World Bank and IMF, is known as Shock Therapy.
It involved sudden shift from a command economy to a market economy, including rapid privatization, deregulation, and trade liberalization.
Shock Therapy
The correct answer is:
✅ Shock Therapy
Explanation:
Shock Therapy refers to the rapid economic reforms implemented in Russia, Central Asia, and Eastern Europe during the 1990s after the collapse of the USSR.
Pushed by IMF & World Bank, it involved:
Immediate liberalization (price controls lifted).
Mass privatization of state-owned enterprises.
Severe austerity measures (cuts to subsidies/social spending).
Why Not Other Options?
Current Therapy → Not an economic term.
Fiscal Therapy → Informal term (not linked to this context).
Glasnost → Gorbachev’s policy of "openness" (political, not economic).
Consequences:
Led to hyperinflation, unemployment, and inequality (criticized as overly abrupt).
Answer: Shock Therapy (Option 2) ✅
Important Questions from The End of Bipolarity
A leader of the Soviet Union from 1985 to 1991 who introduced policies of Perestroika (economic and political reform) and Glasnost (openness) and also stopped the arms race with the United States. Identify him from the following.
NIEO stands for:
In which year did the Russian Parliament declare its independence from the Soviet Union?
Which plan influenced the establishment of the Organisation for European Economic Cooperation in 1948?
When did Lithuania become the first of the 15 Soviet Republics to declare its independence?
