9 Challenges for the Next Decade of Transition


The scale and speed of economic change in Central and Eastern Europe and the former Soviet Union have been remarkable: markets now operate through much of the region, and most national income is generated by the private sector. The new democratic systems have shown remarkable resilience in the face of economic and other crises. However, in much of the region the functioning of markets and the institutions necessary to support them are deeply flawed, for reasons having to do not only with the legacy of the old systems, but also with events during the transition process itself and choices made early in that process. The commitment of governments to reform is being tested by the severe social costs of adjustment as well as by the resistance of vested interests, both old and new.