Question

The model of transition in Russia, Central Asia, and East Europe that was influenced by the World Bank and the IMF came to be known as?

Options

• Mock Therapy

• Privatization

• Shock Therapy

• Capitalism Therapy

Answer 1

Shock Therapy

Explanation:

In most countries, the collapse of communism was followed by a painful transition from an authoritarian socialist system to a democratic capitalist system. The World Bank and the IMF influenced the transition model in Russia, Central Asia, and East Europe, which became known as 'shock therapy.' Shock therapy varied in intensity and speed among former third-world countries, but its direction and characteristics were very similar.