The annus mirabilis was inaugurated with fairly well-defined goals: pluralistic democracy and market-based resource allocation as basic frameworks permitting sustained catch-up with average levels of development in western Europe over time. This certainly applied to the eastern European countries, including the Baltic States. In light of the way in which the breakup of the Soviet Union occurred, the at times half-hearted efforts to elicit meaningful changes in the CIS States, and the contradictions in the courses pursued in all too many, one should be careful in proclaiming the above twin goals as applicable to all transition economies. One must furthermore reckon with varying degrees of backtracking and vacillation in several countries. But there is little doubt that managers of nearly all transition economies are motivated by concerns about, in the first instance economic, modernization. True, egregious corruption, graft, extortion, theft of state assets, nepotism, power hunger, and other negative, some outrightly criminal, attributes of the behavior of the managers of the transition and their immediate subordinates in all too many transition economies cast a pall on that purported motivation. Yet I stand by it. In the more western of these countries the model is well on its way to reaching the level of maturity achieved by the average western European country, but still removed from that coveted state; for the truly less developed of the successor States, and some others (Albania, Cambodia, China, Laos, Mongolia, and Vietnam), however, the prime policy issue revolves more around how best to engineer a takeoff that may eventually pave the way for steady modernization than concerns about how best to catch up in record time with, say, levels of living in western Europe.
This chapter elaborates on the notion of modernization in the context of the wholesale transformation, and in some cases only less-focused transitions, under way in the eastern part of Europe with some marginal comments on the other erstwhile state-socialist countries. I deal in particular with its economic support base. I first sketch the state of economic, political, and social affairs around the more common evaluation of successful transformation as a first stab at evaluating whether progress is being recorded. Next I consider some of the putative policy errors committed since 1989 with or without the support of outside assistance. Thereafter I clarify what I mean by modernization as applicable to the various