ABSTRACT
On the eve of transition in the late 1980s the perspectives of the economic development for most economies of the Soviet bloc in Central, Southern and Eastern Europe (CESEE) seemed optimistic. Before transition, the Soviet bloc developed an alternative system of national accounting, called the Material Product System (MPS), which was designed by Soviet statisticians in the early 1920s and adapted by countries of the Soviet bloc after World War II. Growth after transition is mostly intensive and productivity driven, especially on the stage of the post-transition recovery. Moreover, post-transition economies overperform Old Europe in total factor productivity (TFP) growth rates. The growth accounting decomposition unveils the fall of TFP in almost all post-transition economies in the transformational recession. Initial structural distortions, inherited from the command economy period, also provided facilities for better allocation of resources and, consequently, the growth enhancing structural change.
