Svejnar, Jan2014-09-172014-09-172002https://hdl.handle.net/10986/20232Twelve years after the fall of the Berlin Wall, domestic and international analysts of the transition economies by and large agree that the transition from central planning to a market economy has been exceedingly difficult. There has also been a major debate about the extent to which the transition to date has succeeded or failed. This paper provides an assessment of the policies that were followed and discuss the extent to which there were known alternatives that can have resulted in superior outcomes in terms of: (a) gross domestic product (GDP) growth and other principal performance indicators, (b) building honest and competent institutions, and (c) creating a more transparent and less corrupt system of corporate and national governance. Section two provides a brief overview of performance since 1989. Section three presents the recommendations that were made and policies that were followed. The paper concludes in section four by assessing the extent to which alternative paths can have been followed and what the likely outcomes will have been.en-USCC BY 3.0 IGOACCESS TO BANKACCESS TO FINANCINGACCOUNTABILITYACCOUNTINGALLOCATION OF CAPITALARREARSAVAILABILITY OF CREDITBAD DEBTSBAILOUTSBALANCE SHEETSBANK CREDITBANK LENDINGBANK LOANSBANK OPERATIONSBANKING CRISESBANKING CRISISBANKING REFORMBANKING SECTORBANKING SECTOR DEVELOPMENTBANKING SYSTEMBANKING SYSTEMSBANKRUPTCIESBANKRUPTCYBORROWERBUDGET CONSTRAINTBUDGET CONSTRAINTSBUDGET DEFICITBUDGET DEFICITSCAPITAL MARKETSCENTRAL BANKCENTRAL BANKSCOLLATERALCOLLATERAL REQUIREMENTSCOMMERCIAL BANKINGCOMMERCIAL BANKSCOMPETITIVE BIDDINGCONSOLIDATIONCONSUMER GOODSCONSUMER PRICE INFLATIONCORPORATE GOVERNANCECOST OF CAPITALCREDIBILITYCREDIT CONSTRAINTSCREDIT LINESCREDIT MARKETCREDIT MARKETSCREDIT POLICIESCREDIT SYSTEMCREDITORCREDITORSCURRENCYCURRENCY BOARDSCURRENCY DEVALUATIONCURRENT ACCOUNT BALANCECURRENT ACCOUNT DEFICITSCURRENT ACCOUNT SURPLUSESDEBTDEBTORDEFICITSDEPOSITSDEVELOPING COUNTRIESDISTRIBUTION OF INCOMEDIVERSIFIED PORTFOLIOSDOMESTIC BANKSECONOMETRIC EVIDENCEECONOMIC EFFICIENCYECONOMIC REFORMEMPLOYMENTENFORCEMENT OF CONTRACTSEQUITY STAKESEXCHANGE RATESEXPENDITUREEXPORTERSEXTERNAL DEBTFERTILITY RATEFINANCIAL CRISESFINANCIAL CRISISFINANCIAL INSTITUTIONSFIRM PERFORMANCEFISCAL BURDENFISCAL DISCIPLINEFISCAL POLICIESFIXED EXCHANGE RATEFIXED EXCHANGE RATESFLEXIBLE EXCHANGE RATEFOREIGN CAPITALFOREIGN DEBTFOREIGN DIRECT INVESTMENTFOREIGN EXCHANGEFOREIGN EXCHANGE RESERVESFOREIGN INDEBTEDNESSFOREIGN INVESTMENTFOREIGN INVESTMENTSFOREIGN INVESTORSFUTURESFUTURES CONTRACTSGOVERNMENT BUDGETGOVERNMENT REVENUEGOVERNMENT REVENUESGROSS DOMESTIC PRODUCTHOLDINGHOLDING COMPANIESHOUSINGHUMAN CAPITALINCOME DISTRIBUTIONINCOME INEQUALITYINCOME TAXINDEBTED COUNTRIESINDEPENDENT BANKSINFLATIONINFLATION RATESINFLATIONARY EXPECTATIONSINFRASTRUCTURE DEVELOPMENTINSTITUTIONAL DEVELOPMENTINSURANCEINTEREST RATESINTERNATIONAL DEBATEINTERNATIONAL TRADEINVENTORIESINVESTMENT BANKINVESTMENT CAPITALINVESTMENT FUNDINVESTMENT FUNDSINVESTMENT RATESJOINT-STOCK COMPANYLABOR MARKETLABOR MARKETSLACK OF CREDITLAWSLEGAL ENVIRONMENTLEGAL FRAMEWORKLEGAL PROTECTIONLEGAL REFORMSLEGAL SYSTEMLEVEL PLAYING FIELDLIFE EXPECTANCYLIQUIDITYLIVING STANDARDSLOANLOAN OFFICERSLOCAL BANKSLOCAL GOVERNMENTMACROECONOMIC CONTROLSMACROECONOMIC POLICIESMACROECONOMIC STABILITYMACROECONOMIC STABILIZATIONMARKET ECONOMIESMARKET ECONOMYMARKET PRICESMINORITY SHAREHOLDERSMONETARY ASSETSMONETARY FUNDMONETARY POLICIESMONETARY POLICYNATURAL RESOURCESNONPERFORMING LOANSOPPORTUNITY COSTPAYMENTS UNIONPENALTIESPENSIONPENSION SYSTEMPENSION SYSTEMSPENSIONSPERSONAL INCOMEPOLITICAL ECONOMYPOLITICAL STABILITYPORTFOLIOPRICE STABILITYPRIVATE CAPITALPRIVATE CAPITAL INFLOWSPRIVATE COMMERCIAL BANKSPRIVATE PROPERTYPRIVATIZATIONPRODUCTIVITYPROFITABILITYPROPERTY RIGHTSPROTECTION OF MINORITY SHAREHOLDERSPUBLIC EXPENDITURESPUBLIC FINANCESPURCHASING POWERRATES OF INFLATIONREAL INTERESTREAL INTEREST RATESRECAPITALIZATIONREGULATORY INFRASTRUCTURERENEGOTIATIONRETIREMENTSAFETY NETSECURITIESSHAREHOLDERSSMALL BANKSSMALL BUSINESSESSOCIAL SAFETY NETSSOCIAL SERVICESSTATE BANKSTATE BANKSSTATE ENTERPRISESSTATE PROPERTYSTOCK MARKETSTRATEGIC INVESTORSSUPERVISORY BOARDSTARIFF REVENUETAXTAX COLLECTIONTAX RATESTAX SYSTEMTRADE LIBERALIZATIONTRADE UNIONSTRADINGTRANCHETRANSITION COUNTRIESTRANSITION ECONOMIESTRANSITION ECONOMYTREASURYUNDERDEVELOPED CAPITAL MARKETUNDERDEVELOPED CAPITAL MARKETSVOUCHER PRIVATIZATIONWAGESWORKING CAPITAL10.1596/20232