INTRODUCTION

The sizeable economic lag of the former Eastern bloc within Europe was a central theme of the cold war and seemed to offer proof of communism's failure as an economic system. Not surprisingly, the collapse of communism over a decade ago sparked euphoria and high expectations that the economic gap soon would begin closing, and then gave way to a more sober recognition of the monumental task confronting post-communist societies.

While some observers are inclined to see the persistence of the economic gap through the 1990s as a legacy of communism, historians of the region know that the issue is far more complicated. When the communists came into power, they inherited economies with already low income levels compared with the West. Indeed, the origins of the region's lag stretch far back into the past, most likely well into the early modern period. However big the gap was in the sixteenth century, it probably did not widen substantially until after the Napoleonic era when economic development accelerated in Britain and other parts of Europe, and Central and Eastern Europe fell increasingly behind. Precisely how much it fell behind and how the gap changed in the century that followed is unclear.

At a deeper level, we understand even less why the lag persisted throughout the twentieth century. Most explanations, at least implicitly, are rooted in an enduring view about the region's political economy: that the economies of Central and Eastern Europe have languished under top-heavy state structures as a legacy of the region's Sonderweg or special path to modernisation.