These two papers provide some theoretical underpinnings for an alternative--evolutionary--approach to economic reform in Eastern Europe. Such an approach places little emphasis on reforming old organizations, but instead pins its hopes on the growth of a nascent private sector. An evolutionary policy, therefore, combines a policy of the gradual phasing out of the old institutional framework, an active program to promote new private sector activity and the institutions that this sector requires, and gradual privatization using market processes. The papers analyze both the evolution of centrally planned economies in the region as well as the impact of conservatism. more