Abstract
In the early 1990s, the countries of the Eastern Bloc faced the collapse of existing socialism and the loss of important commercial ties with the Soviet Union. The transition from the socialist regime to liberal democracy brought about the transition from a centrally planned economy to the free market. The purpose of this article is to study the two proposed economic transition methods and to examine the reasons why there were different economic outcomes in the countries of Southeastern Europe. The first section analyzes the basic theoretical methods on economic transition. The second section traces the common factors present in the Balkan countries and the third, the possible causes that affected the smooth transition to a market economy based on these common factors. Finally, the article combines these factors with other country specific circumstances. The article comes to the conclusion that for Southeastern Europe their relative failure is not due to the choice of method but rather, due to the specific factors present in the Balkans: low levels of industrialization at the onset of communism, low incomes at the start of the post-communist era, geographic location, and, failure to achieve a clear breakup with their past economic and political system.