The development of the institutional capacity to create and evaluate economic policies remains a critical need—and constraint—in most transition economies if they are to complete the successful passage to fully functioning market economies. To take an active role in the transition process, economic policymakers, business leaders, government officials, and others need a thorough grounding in market-based economics. This requires strengthening economics education and providing support for qualified economists to teach economics at all levels and to carry out high-quality research and policy analysis. Although the education systems in a handful of countries have already risen to the challenge, in many other transition countries, the structure of educational and research institutes remains grounded in the Communist model. This paper presents findings from a comprehensive study assessing the current state of economics education and research in twenty-four countries of East-Central Europe and the former Soviet Union. While twenty countries were included because preliminary assessments showed that they lacked the capability to offer high-quality economics education, four countries—the Czech Republic, Hungary, Russia, and Ukraine—were included to highlight five centers of excellence that they already host. Based on the experience of these successful centers, this paper presents an approach to building new indigenous capacity for teaching and research on market-based economics in regions where the need is particularly critical—the Caucasus, Central Asia, and Southeast Europe. Comparative Economic Studies (2000) 42, 65–108. doi:10.1057/ces.2000.10

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The paper presents an overview of the problems, policies, and shortcomings of regional planning practices in Yugoslavia and makes recommendations for future regional planning policy with respect to inter-regional inequalities. Since World War II the government has invested considerable effort and resources experimenting with various policies to reduce spatial disparities among its principal regions. As a socialist country, Yugoslavia could presumably use direct control of interregional allocation of investment funds and skilled labor to avoid the classic pattern of regional growth. However, various institutional problems, conflicts between goals and policies, demographic characteristics, and the lack of adequate conceptual structure for regional development policies have limited the government's success in reducing absolute and relative income disparities.