The transformation of economies in Central and Eastern Europe : issues, progress, and prospects

This paper first reviews the legacies of the previous economic systems and analyzes the task of transformation towards a private market economy. It surveys important issues that have arisen and experience with reforms to date. Seven annexes explore selected topics at greater length -- trade, privatization, agriculture, financial sector, fiscal policy, poverty and social safety nets, and the Bank group's activities in the countries concerned. Transforming the socialist economies of Eastern and Central Europe into private market economies requires a wide range of measures, including: (a) macroeconomic stabilization; (b) price, market and trade reforms; (c) private sector development, privatization and enterprise restructuring; and (d) extensive changes in the role of the state. Because of their interlinkages, these reform measures need to be introduced in complementary packages rather than as a linear sequence. Conclusions are tentative, because reforms are still at an early stage, and many important issues remain unresolved.