The First Stage, They Claim, Should Be Achieving A Macroeconomic Stability:

The first stage, they claim, should be achieving a macroeconomic stability: structural reforms cannot be put in place without a working price system; a working price system cannot be put into place without ending excess demand and creating a convertible currency; and a credit squeeze and tight macroeconomic policy cannot be sustained unless prices are realistic, so that there is a rational basis for deciding which firms should be allowed to close. Thus as crucial to their arguments for a comprehensive reform process is the need for real structural adjustment, and for this macroeconomic shock to be accompanied by a number of associated measures such as selling off state assets, freeing up the private sector, establishing procedures for bankruptcy, the preparation of a social security net and widespread tax reforms.
Advocates of shock therapy transformation use a number of political reasons for their emphasis upon rapidity. Perhaps the most important of the political reasons is that the new governments would be best able to carry out strong measures at the outset of their office, and thus deny opponents the chance to subvert the process of change and retain some of the irrationalities of the old style regime. A further argument in favour of the shock therapy transformation is that there is a view of the market as being an institutional package, that it is an integrated and organic whole, the elements of which cannot be introduced one at a time and in a gradual fashion. Thus certain economists have argued that the only way for the market system to function is if all of its core institutions are introduced simultaneously, with the core institutions being a legal infrastructure, private property, free markets and prices, competition, and macroeconomic policy instruments.
However, the shock therapy approach to economic transformation has been criticesed by a number of economists. Although by common conjsensus thewre is a definite necessity for change the shock therapy approach presents us with a number of difficulties. Perhaps the greatest problem concerns the nature of markets, for there is little knowledge of how to actually establish a market system. The situation in Eastern Europe is most certainly unique, for never before have thwere been attempts to establish a market economies from the wreckage of the communist system, since historically the development of free markets went hand in hand with the process of industrialisation. Post communist countries, however, do have a more or less developed industrial infrastructure, social services and political expectations to be governed in some sort of western democratic fashion. In short, our knowledge does not extend to the conditions under which Soviet type economies have to be reformed (Pickel, 1992).
Andreas Pickel identified a number of criticisms of the shock theraphy approach.