Consider the history of the United Kingdom in the second half of the 20th century. Between the 1950s and end of the 1970s the UK was implementing something quite close to communism. The government owned vast swathes of industry, everything from coal mines to steel mills to removal companies and hotels. Government policy was to target full employment at the cost of all else, including inflation. The country was in the grip of extremely powerful unions who had the ability to topple governments.
By the end of this era, the UK was being called the sick man of Europe. In 1976 it had to go to the IMF for a bailout.
Starting with the election of Margaret Thatcher this all started to change. She was someone who would in the UK have been described as a "liberal" except unfortunately political words get mangled the most in the trans atlantic crossing. Americans would have called her a libertarian except minus the gun fetish. She believed in a small state, in individual enterprise, etc.
Amongst her many libertarian decisions after winning the election was to end the policy of targeting full employment in favour of inflation targeting, to engage in massive privatisation programs, and to take on the extremely powerful and outright communist coal mining unions (which had previously toppled any government that tried to engage in reform).
By the time she left power the UK was in recovery and almost universally agreed to be in much better economic shape. Still, lots of people truly despise Thatcher and her libertarian policies, especially in the post-industrial north that was most heavily left leaning. And the UK is by no means some kind of Randian vision of anarcho-capitalism. Thatcher didn't touch the direct government provision of health care and there are virtually no private roads in the UK.
Regardless, I present it as a case study in one countries journey from quasi-communism to more libertarian ideals with an associated economic recovery.