ABSTRACT
Liberalization of the trade regime and the policy of opening up the national economy makes sense only in the context of overall economic and political liberalization—in short, "systemic change." Systemic change in the case of the ex-socialist countries is quite different from previous reforms. True, the once almighty communist party apparatus, the old-time major stumbling block to radical reforms, has mostly been pushed out of its former places of command. There are, however, governing parties for which there is always the temptation to "run" socioeconomic affairs directly with and for their clientele—"for the time being" and "in order to speed up transformation." One of the most paradoxical outcomes of the state socialist experiment is that the system failed most conspicuously in the areas where the comparative advantages of centralized decision-making could have been the greatest. The state of the infrastructure and the structure of incomes renders the labor market rigid.
