New small private businesses have played an instrumental part in economic transition throughout Central and Eastern Europe. Economic restructuring has principally involved a shift of labour, capital, and other resources from large enterprises, commonly loss-making and poorly-governed, to areas of higher efficiency and competitiveness. Small private businesses have been central to this process. These businesses operate under hard budget constraints; they are obliged to meet the demands of rapidly changing market conditions, or fail. A number of studies emphasise the vital importance of small business activity in relatively successful transition economies. Small and medium sized enterprises (SMEs) remain...