Abstract

The two decades following the fall of communism have provided economists with a remarkable opportunity to study the consequences of radical changes in economic institutions, i.e. in the rules of the game and norms that underpin economic interaction. Transition has proved more protracted than anticipated – a rapid catch-up by the central and eastern European transition economies to European Union (EU) levels of productivity did not occur. A useful standard of comparison is with the phase of rapid catch-up by the southern European economies that began following the liberalization reforms around 1960.