ABSTRACT
The economic costs as well as the necessary time span for a successful transition from a command to a market economy were grossly underestimated by most observers in both East and West. Despite some important achievements, mainly in the monetary and institutional areas, the overall picture of the economy is highly ambivalent in most reforming countries. There has been an indisputable decline in economic activities. The economy in Hungary features a flourishing private sector, but the deeply depressed state enterprises still account for a larger part of the economy. Slovenia and Croatia, both benefiting from traditionally more open economies and better functioning market institutions than elsewhere in East Central Europe, suffer from the disintegration shock, as well as from war damage, territorial losses, and a heavy refugee burden. The region's economy will at best stagnate in 1993, so that repercussions affecting reforms as well as the already fragile political and social stability cannot be excluded.
