As chapter 3 made clear, economists could not agree on a detailed optimal blueprint for reforms. Different countries opted for different approaches. Now, more than ten years later, one can attempt an evaluation of how successful different approaches to reform have been.

We start this chapter with the question in section 1 whether rapid or slow reforms were more successful. Here the evidence is unambiguous: it paid to reform quickly and comprehensively.

One experience common to all transition economies and not anticipated by Western economists was the initial collapse of output. Was the depth or duration of the output collapse avoidable?

Most countries liberalised the price system as one of the first (and administratively easiest) reform measures. The combination of relative price adjustments, lower production and a monetary overhang propelled inflation, in some countries degenerating into hyperinflation. Macrostabilisation became important and urgent, as argued in section 2.

All transition economies liberalised their foreign trade early on and, to varying degrees, capital movements. The rapid reorientation of trade to Western markets is a salient result; foreign direct investments were initially much more modest. The Russian crisis of 1998 was a dramatic reminder that liberalising capital flows is altogether a different matter from liberalising trade. With the opening up, the choice of exchange rate regime became important. From currency boards to ‘dirty’ floating, all regimes were tested somewhere. Section 3 asks whether there are conclusions to be drawn.