ABSTRACT
Following the collapse of the communist regimes, new elites opposed to the socialist system took power in Croatia, Macedonia and Albania and sought to make progress with radical economic reforms. They drew on experience of reforms elsewhere in Eastern Europe and, in the cases of Croatia and Macedonia, on the experience of the Markovic reform policies. They succeeded in implementing reform policies in part because they had a clear idea of their own statehood.1 Albania’s statehood was unchallenged from the communist period, while Croatia was able to draw on a long tradition of autonomy within the prewar kingdom of Yugoslavia. Macedonia was in a more difficult position as it had no recent experience of autonomous statehood to draw on, although it had been a republic of the former federal state. However, all three were relatively weak states with limited resources to finance the adjustments needed for radical reforms. During the early period of stabilization, Croatia was embroiled in war, Macedonia was adversely affected by sanctions and embargoes and Albania was emerging from a long period of international isolation. These factors made their systemic reforms especially difficult and accounted for several setbacks along their different paths to stability and growth. This chapter reviews the macroeconomic stabilization policies in these early reforming countries and charts their progress with democratic consolidation and progress with European integration.
