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Political Science Class 12 | Chapter 2 | The Shock Therapy | Video Lecture - Humanities/Arts

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1. What is shock therapy in political science?

Ans. Shock therapy in political science refers to a rapid and drastic set of economic and political reforms implemented in a country to transition from a centrally planned economy to a market-based economy. These reforms often involve liberalizing trade, privatizing state-owned enterprises, removing price controls, and implementing fiscal discipline. The term "shock" indicates the suddenness and magnitude of these changes, which can cause short-term disruptions but are intended to bring long-term economic growth.

2. Which countries have implemented shock therapy?

Ans. Several countries have implemented shock therapy as a strategy for economic reform. Some notable examples include Russia, Poland, and Bolivia. In the early 1990s, Russia underwent a period of shock therapy under President Boris Yeltsin, which involved rapid privatization and liberalization of the economy. Poland also implemented shock therapy in the late 1980s to transition from a centrally planned economy to a market economy. Similarly, Bolivia implemented shock therapy in the mid-1980s under the leadership of President Víctor Paz Estenssoro.

3. What are the advantages of shock therapy?

Ans. Proponents of shock therapy argue that it can lead to rapid economic growth and increased efficiency. By quickly liberalizing markets and privatizing state-owned enterprises, shock therapy creates an environment that encourages competition and innovation. This can attract foreign investment, stimulate entrepreneurship, and improve productivity. Additionally, shock therapy can help address fiscal imbalances and reduce government intervention in the economy, leading to greater economic stability in the long run.

4. What are the criticisms of shock therapy?

Ans. Critics of shock therapy argue that the rapid and drastic nature of reforms can have negative social consequences. The sudden removal of price controls and subsidies can lead to a sharp increase in prices, causing hardship for vulnerable populations. Additionally, shock therapy can result in high unemployment rates as state-owned enterprises are privatized and downsized. Critics also highlight that shock therapy often exacerbates income inequality and can lead to political instability if the reforms are not accompanied by adequate safety nets and social policies.

5. Has shock therapy been successful in achieving its goals?

Ans. The success of shock therapy in achieving its goals is a subject of debate among economists and political scientists. While some countries, such as Poland, have experienced significant economic growth and successful transitions to market economies following shock therapy, others, like Russia, have faced challenges and setbacks. The effectiveness of shock therapy often depends on various factors, including the country's initial economic conditions, the implementation strategy, and the accompanying social safety nets and support mechanisms.

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	Nov 25, 2024 Last updated

Political Science Class 12 | Chapter 2 | The Shock Therapy | for Humanities/Arts2024 is part of Humanities/Arts preparation. The notes and questions for Political Science Class 12 | Chapter 2 | The Shock Therapy | have been prepared according to the Humanities/Arts exam syllabus. Information about Political Science Class 12 | Chapter 2 | The Shock Therapy | covers all important topics for Humanities/Arts2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises and tests below for Political Science Class 12 | Chapter 2 | The Shock Therapy |.

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