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Abstract
The reintegration of the transition countries into the world economy is an essential element of their transformation process. For 50 years or more, these countries were engaged in an experiment in central planning that encompassed not only the domestic economy but also international economic relations. International trade and payments were largely directed by government rather than by market forces, and the group of countries involved limited their economic ties with the rest of the world as they sought to develop their cohesion and interdependence with each other. Trade and financial relations between the centrally planned economies and the market economies atrophied, while among the market economies they burgeoned. The failure of the experiment eventually became clear: before the shift to central planning, a number of countries in central Europe had per capita incomes equivalent to between one-half and two-thirds of those of the most advanced western European economies; by the end of the experiment they had fallen significantly further behind.
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