With few exceptions, the privatization of state-owned assets has failed to contribute to the transformation of central and eastern European countries into free-market, private-property economies. This relative failure can be attributed to three factors: the reliance on neoclassical economics, the absence of decommunization, and the unwillingness of the new elite in the region to assign ownership rights in state-owned assets to the true owners.

Svetozar Pejovich (1931–2021) was Professor of Economics Emeritus at Texas A&M University and Senior Research Fellow for the International Centre for Economic Research in Torino, Italy.
Defense and Foreign PolicyEconomyEuropeFree Market EconomicsGovernment and PoliticsGovernment Waste/PorkInternational Economics and DevelopmentLaw and LibertyPrivatizationProperty Rights, Land Use, and ZoningRegulation
Other Independent Review articles by Svetozar Pejovich
Summer 2003 Transition: The First Decade
Summer 2001 From Socialism to the Market Economy: Postwar West Germany versus Post-1989 East Bloc
Fall 1997 Law, Tradition, and the Transition in Eastern Europe