Transition Economies in Eastern Europe

Following the collapse of state socialism in Central and Eastern Europe, democracy and free enterprise are spreading sporadically throughout the region. By 1995, more than a third of the economic output in the former socialist economies was being produced by the private sector, product shortages had lessened considerably, and some entrepreneurs and speculators were becoming wealthy, and not simply by the standards of the former socialist economies.

The transition of former command economies to market economies has tended to vary in effectiveness, wherein effectiveness is equated with the development of economic efficiency within an economy and the transmission of benefits to the participants in that economy. Much of the variation in the progress in the transition economies, therefore, may be assessed within a theoretical framework of economic efficiency.

While all transition economies face common problems, important differences exist in relation to both their economic status when transition began and the policies implemented to foster and govern transition. These differences both affect and partly explain differences in economic performance by these economies during the transition era.

This review found that the Czech Republic is in the strongest position of the three countries; however, the Czech Republic was in the strongest position of the three countries when trans

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strike, and agreed to abolish press censorship, provide independent trade unions access to the media, and release political prisoners (Hunter, 1997). By mid-1981, almost 10 million Polish industrial workers had joined the independent trade union Solidarity, and the nation's farmers had secured government approval to form their own independent union. In December 1981, Solidarity proposed the conduct of a national referendum on the establishment of a non-Communist government in Poland. That proposal was too much for the Brezhnev government in the Soviet Union, and the Soviet Union demanded that the Polish government move against Solidarity (Hunter, 1997). Under the threat of Soviet intervention, the Polish government declared martial law, and outlawed independent trade unions. Gierek was replaced as prime minister by General Wojciech Jaruzelski. By mid-1983, however, anti-government feelings in Poland were high, and labor and social unrest once again began to take a damaging toll on the Polish economy (Hunter, 1997). As the Polish economy continued to worsen in the 1980s, the prohibitions against the independent trade unions were gradually lifted, and by the late-1980s the Jaruzelski government agreed to a free election i
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Approximate Word count = 4384
Approximate Pages = 18 (250 words per page)

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