1 Introduction.- 1.1 Objective.- 1.2 Facets of transition.- 1.3 On the economics of transition.- 1.4 Structure.- I The economics of transition.- 2 Stylised facts.- 2.1 Legacies of central planning.- 2.1.1 General features of socialist economies.- 2.1.2 Foreign trade in socialist economies.- 2.1.3 The financial system in socialist economies.- 2.1.4 Reforming socialist economies.- 2.2 Transition policies and developments.- 2.2.1 Transition policies.- 2.2.2 Economic developments.- 3 Transition in Eastern Europe.- 3.1 Perspectives on transition.- 3.2 Dimensions of Transition.- 3.2.1 Macroeconomic Stabilisation.- 3.2.2 Privatisation.- 3.2.3 Liberalisation.- 3.2.4 Restructuring.- 3.3 Summing Up: What is "Transition"?.- 4 Economic theory and transition.- 4.1 Walrasian general equilibrium theory and beyond.- 4.2 Second-best analysis: the role of distortions.- 4.2.1 Basic assumptions.- 4.2.2 Implications for transition.- 4.3 Political economy: the role of distribution.- 4.3.1 Basic assumptions.- 4.3.2 Models of the political process.- 4.3.3 Implications for transition.- 4.4 Rents and distortions: a unified framework.- II Economic restructuring, international trade and factor markets.- 5 Labour re-allocation.- 5.1 Structural change and factor re-allocation.- 5.2 Labour adjustment and structural change.- 5.2.1 Labour adjustment, unemployment and economic restructuring.- 5.2.2 Labour adjustment, unemployment and growth.- 5.2.3 State enterprises and economic restructuring.- 5.2.4 Political economy aspects of labour adjustment.- 5.3 Labour adjustment and the path of transition.- 5.3.1 The basic framework.- 5.3.2 Economic transition without governmental interference.- 5.3.3 Economic transition and political support.- 5.3.4 Transition policies and the speed of restructuring.- 5.4 International trade and labour adjustment.- 5.4.1 A stylised model of economic restructuring.- 5.4.2 Effects of trade policy.- 5.4.3 Second-best trade policy.- 5.5 The political economy of trade liberalisation.- 5.5.1 The political process in transition economies.- 5.5.2 Trade policy in a static setting.- 5.5.3 Trade policy in a dynamic setting.- 5.5.4 Endogenous trade policy and welfare.- 6 Capital markets and transition.- 6.1 Financial markets in transition economies.- 6.1.1 Functions and problems of financial markets.- 6.1.2 Reforms of the financial sector.- 6.1.3 Financial markets and restructuring.- 6.2 Capital markets and the transition process.- 6.2.1 Intersectoral capital mobility and price liberalisation.- 6.2.2 Capital accumulation and structural change.- 6.2.3 Credit availability and the collapse of output.- 6.2.4 Risk diversification and structural change.- 6.3 Imperfect capital markets.- 6.3.1 Missing markets.- 6.3.2 Credit rationing.- 6.4 Credit rationing and international trade.- 6.4.1 A stylised model of credit rationing.- 6.4.2 Credit rationing in general equilibrium.- 6.4.3 Gains from trade.- 6.4.4 Heterogeneous borrowers.- 6.5 Bad debts, bank lending and structural change.- 6.5.1 The model.- 6.5.2 Credit market equilibrium and the allocation of credit.- 6.5.3 Trade liberalisation and the allocation of credit.- 6.6 The political economy of financial market reform.- 7 Conclusions.- References.

Norbert Wunner presents an analysis of the main factors which have contributed to the slow and painful structural adjustment process and to the delay of economic reforms in transition countries from a political economy perspective.

Dr. Norbert Wunner war wissenschaftlicher Mitarbeiter von Prof. Albert Schweinberger, Ph.D., am Lehrstuhl für Internationale Wirtschaftsbeziehungen der Universität Konstanz. Heute ist er DAAD Fachlektor in Deutscher Politischer Ökonomie an der London School of Economics and Political Science.