ABSTRACT
In response to the recent surge of interest1 in the ongoing economic transformation of the former Eastern Bloc countries, thanks to its hegemony vis-a-vis the all powerful international economic institutions such as the World Bank and the International Monetary Fund, economic orthodoxy has once again come to the foreground. Long-time prescriptions have once more been polished up and fine tuned to the exigencies of the dire circumstances in which former communist countries now find themselves.2 The ever present problem with international economic institutions was that they were caught in a dilemma. On the one hand, because of their adherence to orthodoxy, they had to defend a liberal, laissez-faire, and preferably free-trade doctrine that leaves little room for policy implementation, yet on the other hand, they were created to come up with policies that would help cure the ills of a situation which would not, or could not, resolve itself. Hence, such institutions were always forced to betray their doctrinal commitments by virtue of their raison d'etre and learn to live with a permanent contradiction between what they professed and what they actually did.
