Populism Is Holding Poland Back

Poland’s economy is doing fairly well, especially by European standards, but its populist-conservative government is keeping it from doing even better.

Earlier this year, S&P Global Ratings downgraded Poland’s government debt. Moody’s just changed its outlook for Polish bonds from stable to negative. The government’s cost of borrowing has been creeping up. Foreign investors may be getting nervous: Net portfolio outflows were $2.3 billion in January and $3.8 billion in February. The International Monetary Fund talks ominously of "a weakening of some institutions." These are not good signs, and the new Law and Justice government needs to pay attention.