Fall of communism and Soviet collapse

Between the fall of the Berlin Wall in November 1989 and the formal dissolution of the Soviet Union in December 1991, the centrally planned economies of Eastern Europe and the USSR began an abrupt transition to market systems. Poland moved first and fastest, adopting the 'shock therapy' Balcerowicz Plan in 1990 to liberalize prices and privatize state firms almost overnight. Across the wider former Soviet bloc the transition was far rockier: output collapsed, in Russia's case by roughly 40% over the 1990s, while inflation spiked into the hundreds or thousands of percent as price controls were lifted with little institutional infrastructure in place to replace them. The chaotic transition set the stage for the oligarch-dominated privatizations and repeated financial crises Russia experienced through the following decade.