This volume is the result of a research program, started at the World Bank, that brought together researchers from many backgrounds, including individuals from the transition economies. The work was supported by the World Bank's Research Committee and by the Economic Development Institute. The results reported here shed light on the factors that determine the shape and pace of the transition from planned to market economies. The primary focus is on the behavior of firms and the interaction of that behavior with the labor market. While finding significant variation across countries, the chapter authors point to major adjustments within firms, both in the remaining state sector and among firms that have been privatized. The volume also spotlights the critical feedback from the labor market to the decisions made by workers and managers regarding privatization and restructuring. In addition to chapters that take a detailed look at different country experiences, the volume contains some path breaking attempts to use this empirical information to set up and calibrate models of transition. In their findings, the authors conclusively demonstrate how sensitive the pace and efficiency of transition will be to a range of policies, including unemployment compensation and the selected forms of privatization. The volume thus provides a deft mix of empirical and analytical insights into the complex process of transition.