Converting a command economy to a market economy is a reconstruction problem easily on the same scale as that faced after a major war. After four to seven decades of a vast social experiment, the former Communist states of Central and Eastern Europe confront problems of economic transformation unprecedented even after wars, because they find themselves devastated in some unique ways:
First, not only was the economic system shattered, but so was the institutional infrastructure. What remained was a personal and capricious legal system inimical to the operation of a market economy. The rigidities and imperatives of planning forced people routinely to break the law to meet the plan objectives. Thus anyone in a decision-making position could be prosecuted as a criminal at any time, fostering a system of client-patron relationships very similar to the “service-protection contract” characteristic of feudalism (Bloch 1941). Even if a new system of laws could be built overnight, a culture of abiding by the law cannot.1 No amount of foreign aid can overcome this fundamental problem.