Which one of the following is not a consequence of Shock Therapy in post-communist societies in the 1990s?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → The old system of social welfare was systematically revived.
Shock Therapy, a rapid transition from a state-controlled economy to a market-based one in post-communist countries, had the opposite effect. It led to the systematic destruction of the old social welfare system, as the government withdrew subsidies and social safety nets. This pushed a large section of the population into poverty and hardship.
Its consequences included:
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It did not deliver mass consumption or prosperity as promised.
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The ruble collapsed in value.
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Privatisation created oligarchs and widened economic disparities.
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The old socialist welfare system was dismantled, not revived — leading to unemployment, poverty, and insecurity.