ABSTRACT
As elsewhere in central and eastern Europe (CEE), the starting point of Romanian post-communist transformation lay in artificially constructed industrial networks that were formed administratively between big or very big companies and industrial platforms. In order to become integrated into the world economy these networks had to transform themselves into authentic value chains formed spontaneously between independent agents which operate in competitive markets and follow utility maximization objectives (Blanchard and Kremer 1997). The problems for Romania were particularly acute because, prior to 1989, the country had probably the most centralized production system in CEE while its political economy was not conducive to rapid systemic change.
