There is surely an element of farce in the fate of one of Marxism's most widely known prognoses concerning systemic change in post-revolutionary societies: the doctrine of the 'withering away of the state' under communism. This chiliastic doctrine was a central tenet of Soviet Marxist ideology, albeit on the level of grandiloquent theorising rather than of actual policy: in practice, communist rulers everywhere sought to increase state power rather than abolish it. Nevertheless, nothing in the Marxist canon would have led us to the conclusion that the relegation of the communist state machine to the dustbin of history would occur through 'capitalist restoration'. In the wake of this, we have to ask what role the state should assume in the fledgling market economies of Eastern Europe?Transition strategies in the region have centred on the expansion and nurturing of the private sector and the concomitant reduction of the state's role in economic and social affairs. The run-down of the state sector in Eastern Europe has been part of the process of 'creative destruction' of communist institutions, a process which is rightly viewed as a necessary concomitant of systemic reform. However, in the writer's view, there is also a need for a parallel process of creative construction with regard to this sector. Although some aspects of public sector reform have been addressed these have been 'ad hoc' responses to specific problems rather than part of a co-ordinated strategy, still less a product of a coherent 'philosophy' of government.Some major problems in Eastern Europe's transition process can be at least partly attributed to administrative incapacities. Examples of these, spanning all stages of the policy process, abound: the problems encountered by governments in collecting state revenues and in balancing budgets for example, and the widespread delays in the formulation and implementation of privatisation programmes. Each of these problems contributes to a potentially dangerous 'expectations gap' in the region.
