This discussion of the traditional system of management of the early 1950s and its subsequent reforms shows that the focus of these reforms is on finding a proper combination of planning and market mechanism. In Hungary and Poland most reformers would like to see the central authorities reserve for planning only what cannot be carried out satisfactorily by market-forces. In the USSR and the CSSR the fight is on to convince the political leaders to leave to the market the tasks which planning cannot perform well. In Hungary, and to a lesser extent in Poland, which are at the forefront of the reforms, the market plays an important role in co-ordinating economic activities. In the 1980s the market environment has been extended by slowly developing capital markets and by a strengthening of fiscal and monetary policies. Still more changes are needed to bring about a transformation in the behaviour of enterprises. The management system and economic policy are closely intertwined. This book shows that the success of the reforms depends on the extent to which economic policy is able to solve acute economic problems, primarily the restructuring of the economy.