Economic Transition has been an agenda since decades, Eastern Europe countries began their process of transition after the fall of Soviet Union. Economic transition refers to the process that shift from centrally planned economy to market economy aiming at improving the economic performance of the country. Moreover, political economics argument explains that the suitable political strategy to improve economic performance, should not be based on a central authority government, claiming that decentralization supports democracy because it reduces the vested interests power and allows for competition, transparency and innovation of subnational governments, additionally it would empower and engage minorities in the political power and hence reduces tensions and improves economic performance. Liberalization is considered as a corner stone in transition economies; where liberalizing the economy aims at achieving efficiency by all means. Results shows that, decentralization has various benefits that differ from one country to another and has the power to improve the lives of people.
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