The Polish economy depends on deregulation not becoming a passing trend or an episode of the election campaign. Deregulation has the potential to be a major driver of growth.
If there were a contest for the economic buzzword of the year in Poland, “deregulation” would be a frontrunner. Thanks to Prime Minister Donald Tusk’s meeting with entrepreneurs in February 2025, the issue briefly rose to the forefront of Polish politics. But more importantly, deregulation matters deeply for the economy itself.
By reducing regulatory burdens, the economy can grow faster – leading to both improved living standards and increased resources for critical public spending, particularly when it comes to national security. Entrepreneurs are now working on a list of recommendations as part of the “SprawdzaMY” initiative, and Minister Maciej Berek is heading a government team focused on deregulation. But the question remains: will these efforts lead to real change? After all, deregulation has been discussed for years. It’s time for politicians to move beyond words and take real action.
“The lack of competitiveness in Poland’s economic regulations significantly weakens our position in the race for capital and in global social and economic development,“ stated a 2009 report titled Poland 2030: Development Challenges, authored by Michał Boni with an introduction by Donald Tusk.
Yet despite these regulatory disadvantages, Poland has been a growth leader in Europe over the past 15 years—not because of superior economic policy but because of regulations that hinder competitiveness. Compared to other EU and OECD countries, Poland continues to lag in global rankings that assess the business environment.
Poland ranks 70th in the Fraser Institute’s Economic Freedom Index, tying with Greece for the lowest rating among EU countries. In the Heritage Foundation’s similar index, Poland performs slightly better—42nd place globally—but still ranks among the lowest in the region.
When the World Bank still published its Doing Business rankings, Poland placed 40th in the 2020 edition. In the most recent International Tax Competitiveness Index, which evaluates aspects such as the quality of the tax system, Poland was 31st out of 38 surveyed countries. In the Tax Complexity Index, Poland ranked 63rd out of 64, beating only Peru.
To make matters worse, European Commission data shows that Poland has the fifth-longest average time for resolving civil and commercial cases in first-instance courts across the EU. Unfortunately, this is just one of many rankings where Poland falls far short of its potential and ambitions.
During his speech at the Warsaw Stock Exchange in February, Prime Minister Tusk said he wanted to see Poland move up in the global happiness rankings. But as we can see, there is still a lot of work to do. The good news? There is a strong correlation between economic freedom and happiness, as measured by the World Happiness Report. So improving one can help improve the other. But what exactly does deregulation offer?
On a micro level, reducing red tape and simplifying laws allows entrepreneurs to focus more on their core mission—serving customers. Less time and money spent on reporting, tax compliance, permits, and legal issues means more room to create jobs and expand operations. For example, World Bank data shows that meeting tax obligations in Poland requires an average of 334 hours annually. For large companies, this results in bloated legal and accounting departments. For micro and small businesses, it’s often the owner who bears the burden—making overregulation especially tough on them.
On a macro scale, deregulation can boost growth and, in turn, raise living standards. Excessive regulation, by contrast, stifles development. The Mercatus Center in the U.S. estimated that between 1980 and 2012, the cost of regulation shaved off 0.8% of GDP annually. Had the regulatory burden stayed constant since 1980, the U.S. economy could have been 25% larger, translating into an extra $13,000 per person.
Economists Simeon Djankov, Caralee McLiesh, and Rita Maria Ramalho estimated that a country moving from the most to the least overregulated group in the Doing Business rankings could see an increase of 2.3 percentage points in its annual growth rate. Similarly, Alberto Alesina and colleagues argued that the significantly faster growth of the U.S. economy compared to Germany, France, and Italy in the late 1990s was partly due to differences in regulatory burdens.
Today, top EU officials are discussing deregulation as a way to enhance competitiveness and drive economic growth in Europe. So why is it still so often obstructed?
First, opposition to deregulation is sometimes politically motivated. In Poland, resistance can come from within the ruling coalition – especially from the political left. Ironically, although the Polish left often praises the “Scandinavian model,” countries like Denmark consistently top the rankings for economic freedom and business climate. In fact, deregulation is a key part of the very model they claim to admire.
It is reasonable to assume that the concept of deregulation will be demonized and that an effort will be made to create the impression that deregulation benefits just business. Naturally, this is untrue, as businesses with fewer regulatory restrictions are able to raise pay and add new jobs.
Second, some opposition comes from bureaucrats unwilling to relinquish power. It is no coincidence that, even as Prime Minister Tusk spoke at the Warsaw Stock Exchange about a breakthrough year for the economy, a key deregulation package from the Ministry of Development and Technology had been stalled for months – blocked by two government ministries. When public administration is used to doing things a certain way, change is hard. Overcoming this inertia is a core task for any deregulation effort. It is not just the rules that need to change – but also bureaucratic habits and mindsets. Will we finally see the implementation of principles like resolving doubts in favor of the taxpayer or the idea that “what is not explicitly forbidden by law is allowed?”
Third, entrenched interest groups also stand in the way. American economist Mancur Olson argued that small, organized interest groups often wield disproportionate influence over policymaking. This allows them to use regulation to their advantage – at the expense of the broader public. The result is overregulation and bureaucratic sprawl, as politicians and officials cave to these narrow interests.
A complicated tax system benefits tax advisors. Ambiguous regulations hurt businesses – but provide steady work for the lawyers that serve them. ESG reporting is expensive and time-consuming, but it creates opportunities for specialized consultants. And any talk at the EU level of easing GDPR rules would likely be met with loud objections from data protection lawyers. Professionals in regulated fields often resist opening up their industries to newcomers who might compete with them.
This does not mean that lawyers, consultants, or compliance experts are bad people. They are simply responding to the incentives that current regulations create. That is why it is just as important to prevent new regulations from being introduced as it is to remove old ones.
For the Polish economy, deregulation must not become just another short-lived campaign slogan. Creating better conditions for business and faster growth through real policy change also benefits politicians in the long run. With high defense spending on the horizon, robust GDP growth will make these costs easier to bear. Deregulation can be a powerful engine for that growth. Now is the time to stop talking – and start doing.
This article previously appeared in Rzeczpospolita (in Polish).
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