Review of effects of economic reforms on economic development of the countries in transition

Countries in transition are economies that are changing from a centrally planned organized to the countries of the free market. The essence of this process is the implementation of economic liberalization in which market forces influencing the prices formation, reduction of trade barriers to the abolition, privatization of state enterprises and resources, and the creation of financial sector which should facilitate the movement of private capital. Due to the inefficiency of the system, at the end of twentieth century socialism as a social system and economic model ceased to be an alternative to the capitalist economic model. Although official statistics showed growth of economic activities which used to exceeded the growth rates of developed market economies, it was not the growth that creates new value. This research work deals with the review of the effects of systemic economic reforms in countries in transition. The analysis of nine transition indicators, prescribed by EBRD, the existence of differences between the two groups of countries in transition was explored, that are formed on the basis of the average value of the transition indicators, in terms of the value of GDP. Using the Mann-Whitney U test statistical methods, it is found that countries in transition that have higher value of the average transition indicator recorded a higher value of GDP. Also, based on the results we could see which countries have the best progress in the transition process in the respective calendar year.