In 1995 we published Winds of Change to treat the key question for transition countries: ‘How to reform?’ In the meantime we can look back on more than ten years of transition experience. No country was able to jump-start its economy on market-based principles and converge rapidly. In all transition countries production fell after opening up. In some countries this fall was short-lived, but in most it lasted several years. In some the level of production is, twelve years after opening up, still below the level of 1989. There is no simple explanation of the diversity in transition performance, but starting conditions did play a central role.

Today, therefore, the question is no longer ‘How to design reforms?’ Rather, it is ‘Why have certain approaches worked and others not?’ This will be a major theme of this book. By implication, in many countries a lot still needs to be done. This is another major theme.

In this book we resist the temptation to produce a complete record of transition experience. We rather select the most significant experiences that may become, over time, classical reference cases. Of course, the overall experience in all transition countries will be presented, but it will not be pursued in depth for each country.

The outline of the book is as follows. In part I we start with a bit of history, an overview of communist experience.