Countries of the former Soviet Union and Eastern Europe are entering the second decade of political transformation and economic reform. The first decade involved macroeconomic stabilization, privatization, and development of the basic institutional infrastructure of a market economy. The new policy challenges center on the nature of the social contract between citizens and their governments. These challenges include identifying the appropriate boundaries between the obligations of the public sector and the responsibilities of individual citizens, the range of public goods the government should supply, and who should pay for and benefit from their provision. The essays in this volume, first published in 2001, focus on two interrelated issues: the making of fiscal policy and the provision of citizens' welfare, particularly regarding pensions and health care. The essays emphasize that there is no single model of a market economy; rather, governments and publics face a range of options for restructuring the socialist welfare state.