By Boris Pleskovic and Jeffrey D. Sachs

in The Transition in Eastern Europe, Volume 1

Editors: Olivier Jean Blanchard, Kenneth A. Froot, Jeffrey D. Sachs

With the dissolution of Yugoslavia and the Soviet Union, twenty new independent states have emerged where there were previously two. In each of these new states, there is an urgent agenda, including the creation of state institutions (fiscal authority, tax authority, central bank, border control, etc.), macroeconomic stabilization, and economic transformation from a socialist economy to a market economy. These momentous changes are generally being carried out under conditions of extreme political uncertainty, typically with legislative bodies that are only partially elected, or that were elected under the old regime; and with constitutions that are holdovers from the Communist period.

Read the chapter