ABSTRACT
Dramatic economic and political changes have taken place in the Baltic States over the last
two decades, which have resulted in new institutional structures and a great deal of new
physical development. The fall of communism required the construction of entirely new
institutional, economic and political systems (Downes, 1996). The extent of change has
been much more profound than other former republics of the Soviet Union. Rapid econ-
omic restructuring and the introduction of open trade policies resulted in huge changes
in the Baltic economy. The 1990s and early 2000s was a period of great expansion and
growth in the region: the annual rate of economic growth regularly increased by double
digits and the rate of unemployment dropped to some of the lowest levels in Europe.
