Privatization programs are never easy to carry out. In Poland's case, the hurdles are particularly high. Not only does the seven-party coalition government need to build parliamentary consensus for every step of its program; its major constituency—the powerful trade unions—has to be convinced that privatization is in its best interests.

In this interview, Minister of Privatization Janusz Lewandowski describes the mix of privatization approaches that Poland—among only a handful of former Comecon nations—has adopted to get on the fast track to market reform. They include relying on advisors to enhance the competitiveness of Poland's large companies, and selling off small enterprises in groups of hundreds to foster popular capitalism. Privatization is a compliment to, not a substitute for, a range of macro- and microeconomics measures that facilitate private ownership and competition, especially in economies that have borne the brunt of decades of state planning and public ownership.

McKinsey: Before you decided on privatization as the road to market reform, what other options did you consider?

Lewandowski: In 1989, when the first post-Communist government came into force in Poland, it was clear to us that we could not advance on the road to a market economy without deep ownership changes, and...