The collapse of communism led to much euphoria about the future of the former Soviet bloc countries. Today it is clear that some countries, like those in Central Europe and the Baltics, were more successful than others in transitioning from communist dictatorship to free‐market democracy. Oleh Havrylyshyn will explain why that was the case. He will also explain how countries with a greater chance of joining the European Union were more successful in establishing the rule of law and democratic government than countries without such an opportunity. Both he and Ambassador Reiter will assess the current state of economic liberalism in transition countries.