From Central Planning to Market Economies: Post-1989 Transformation in Central and Eastern Europe

The collapse of centrally planned economies in 1989 triggered one of the most transformative socio-economic transitions in Central and Eastern Europe (CEE). This study examines the origins, assumptions and structural dynamics of post-communist transformation through the lens of Institutional Change theory. Adopting a qualitative comparative historical approach, it analyses policy reforms, market liberalisation and institutional restructuring in the shift to market economies. It also explores macro- and micro-level impacts, including social inequality, regional disparities, and changes in production systems, as well as the international dimension shaped by European Union integration, global markets and regional cooperation. By integrating institutional and historical perspectives, the study highlights the interaction between structure and agency, revealing both the gains and contradictions of market reforms. It concludes that while the transition improved integration and growth, it also entrenched uneven development and institutional dependency that continue to shape the region’s long-term socio-economic and political trajectory.