Progress in Economic Transition in the Baltic States

Abstract

A Finnish economist assesses the economic transition experience of the three Baltic countries—Estonia, Latvia, and Lithuania—the first among the successor states of former Soviet Union (FSU) to liberalize and stabilize their economies. He investigates the extent to which progress in transition reflects favorable initial conditions in the Baltic states vis-a-vis implementation of stable macroeconomic policies and ongoing structural reform. The paper argues that the pronounced break with the past after these countries regained their independence facilitated efforts to steer the reform process in a more radical direction, with the prospect of EU membership providing an added incentive to continue painful structural reforms. Journal of Economic Literature, Classification Numbers: E6, P2, P3. 4 figures, 2 tables, 53 references.