South-East Europe, which is expected to join the EU in the future, has not passed the entrance examination of the EU yet due to various kinds of hurdles. This article examines the process of economic transition and EU accession of Serbia and Montenegro, which is one of the most lagging-behind runners in an EU accession race. It concludes that the standardised international assistance packages to Serbia and Montenegro are much less effective due to the complexity of its state structure and that a settlement of Kosovo Issue will be the far most important precondition for its successful transition.

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In the early years of the Polish economic transition, the fast growing economic performance gap between the regions emerged as a serious socio-economic issue. Regions holding heavy industrial areas, rural agricultural areas and R&D centres were hit hardest and unemployment as well as great decline of outputs reached a formidable level. The Polish government established Special Economic Zones (SEZs) in such regions, introducing investment incentives to attract foreign investors. Though major multinational enterprises often choose SEZs as their plant locations in Poland, only a small portion of FDI has been realized in SEZs and the amount of employment generated in SEZs is far from its original target number. The conclusion of this paper is that SEZs as an FDI promotion policy instrument brought a certain level of success but not as much as the Polish government expected.

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During its transition to a market-based economy, Russia has experienced a severe non-payment problem. We analyze the emergence and development of arrears problem in the banking sector, putting a special emphasis upon the interrelation between the ratio of the non-performing loan and the quantitative and qualitative characteristics of each bank. We find that the banks with the origin of the former specialized banks tend to have a higher ratio of the non-performing loan, while the newly established private banks have a lower one. This shows that the banking sector in Russia has been quite segmented.

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The banking crisis in the Czech Republic continued for almost a decade during the transition because "moral hazard" was embedded in the banking sector, reflecting underdeveloped banking regulations and supervision, delayed privatization, ad hoc rescue programs, and financial injections for collapsed banks by quasi-state money as easy financial tools that mitigated the transition shocks. The situation improved due to the completion of privatization of banks and modification of banking regulations to meet the EU standard. However, the fiscal burden of clearing up the huge non-performing loans that are transferred from banks to the state agencies is still a large issue.

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The purpose of this paper is to survey arguments about the role of government in transition and to put them in order from the viewpoint of economic growth. The remark can be summarized to three points below. 1) While the governments of transition countries need to advance many policies, the room for a further examination about the speed of marketization is suggested by some persons. 2) The thoroughness in rule of law and prevention of corruption are requested to reserve their capability of policy execution. 3) The possibility that the democratization assures continuous growth is suggested by many papers.

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