October 2003 - In 1998, elections were held in Poland to create regional councils. Soon afterwards, similar elections were held in the Czech Republic (2000) and Slovakia (2002). This trend invites many questions: Why have these East Central European countries established regions and regional political authorities? What factors drove this process of region-building? What explains variance in region-building across post-communist countries? Why has Poland taken the first and the most significant steps toward regionalization? My approach to answering these questions is to consider a number of factors and incentives that drive the regional reform processes in post-communist countries in general and to examine the Polish case in particular.

This working paper examines the economic aspect of state-building in the former Yugoslavia. It hypothesizes that during the process of division and in the first four years of economic independence each of the five successor states chose economic policy options which are leading to divergent patterns of economic growth. As a result, after four years, five distinct economies have emerged, each pursuing increasingly diverging growth paths. This divergence is even more striking when we remember that each of the successor states began with the same institutional framework, a common transition path, and a comparable level of macroeconomic instability.