Many Central and Eastern European nations transitioned from centrally planned to market economies during the early 1990's. Murphy et al. [1992] and Boycko [1992] have provided analysis of the reform process for these planned economies, highlighting problems of policy im certainty, timing, partial government ownership and other factors that lead to the associated economic decline. In an empirical study Blanchard and Kremer [1997] have shown that aggregate output declined 40- 70 percent in industries across the republics of the former Soviet union over the 1989-94 period with the larger declines in sectors having more complex production process.