ABSTRACT
The circumstances specific to the region have to be understood: these include not only the legacies of the pre-communist and communist periods, but also the impact of current trends in world capitalism. The chapter sets the scene by tracing in very broad terms the relation between the evolution of the Soviet bloc and that of world capitalism in the post-war period up to 1989. It describes the ways in which foreign capital has acted to deepen and extend this integration since 1989. The chapter reviews alternative paradigms in economics in order to assess how they view the role of foreign capital and the state in undertaking national economic development. It develops a more critical analysis focused on class formation and the political economy of national development in the context of global capitalism. One of the key elements in the policy prescriptions offered to the East-Central European countries after 1989 was the need to integrate their economies fully into world capitalism.
