This volume in essence continues my recent contributions towards
building up a better understanding of the wide range of obstacles
besetting the transitions away from administrative planning in the
former communist regimes in the eastern part of Europe. It is
self-contained, however. As such, it specifically addresses issues
revolving around how best to govern economies, and indeed societies more
generally, that are undergoing fundamental structural transfor- mation,
and whether industrial policy can facilitate progressing with the vexing
transformations that will have to be enacted over a protracted period of
time. Because of the bewildering variety of hindrances that the managers
of the transition have been confronted with, many of which were not even
contem- plated when the programs were first designed, regaining a
measure of good governance, including notably good economic governance,
is critical in formu- lating a positive pOlitical economy of transition.
Arguably most critical is steering the processes of destruction and
creation-not 'creative destruction' in the Schumpeterian sense. In some
cases, this requires reallocating decom- missioned resources, both
capital and labor, to new activities. Changing rules on the utilization
of existing assets is evidently at the core of what the transi- tion
towards market-based economic systems should be all about Very often,
however, this requires establishing new economic activities from
domestic and foreign savings.