The challenge of making a successful transition from central planning under Communism to a market economy and a democratic polity is one of the most important facing the world today. There is no historical precedent; while the experience of the West provides attractive models of the ultimate destination, the beginning of the journey is uncharted territory. In this volume a number of leading Western economists offer the first comprehensive overview of all aspects of the economic problems facing Eastern Europe. These encompass much more than the need to dismantle rigid systems of control. A new set of social arrangements that would enable market forces to enhance productivity must be constructed - contract law, secure private property, a predictable taxation policy, a stable monetary structure, and an appropriate regulatory framework. The task is greatly complicated by the fact that the institutions of a successful market economy are highly interdependent: each functions properly only when others are also in place, but none can be put in place with one stroke. Part I deals with overall approaches to the transition; Part II, with macroeconomic balance and financial discipline, Part III, with government policy towards the private sector, in particular anti-trust policy and safety-net issues; Part IV, with privatization policy and the current state of privatization plans.