| Summary: | This report by the World Bank considers the lessons to be drawn from the experience of the transition economies of Eastern Europe and the Commonwealth of Independent States between 1991-2000, and examines why economic growth has been stronger in some countries than others. It looks at the policy and institutional conditions that encourage the growth of new firms while imposing financial discipline on the older firms inherited from the socialist past, without granting special favours to either. Whilst emphasising the importance of market-oriented policy reforms, it also examines political strategies to push the reform process forward in different transition countries. The report finds that barriers to the creation of new firms are a critical obstacle to sustained growth in the transition economies; new firms, mostly employing 50 or fewer workers, have rapidly become the major source of employment in the fast-growing economies of Central Europe and the Baltics.
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