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The Transition to a Market Economy

With the collapse of Soviet power, the nations of Eastern Europe necessarily had to make the transition from a command to a market economy. In the first years, this transition was often painful. Output and already low living standards declined, unemployment was sometimes widespread, and the spread between the highest and lowest incomes increased greatly.25 Recovery started in the mid-1990s for some countries and post-2000 for others. Over the last few years, until the 2008 financial crisis, most East European states enjoyed GDP growth of 5 to 10 percent a year, which is much higher than the growth rates typical of Western economies.

Within a context of rapid social and political change, East European cities are undergoing substantial transformations. In short, they are gradually losing the typical features of communist spatial structure and acquiring those characteristic of capitalist structure. The increase in personal income has resulted in a major increase in automobile ownership. One result is that most large East European cities have by now developed suburban peripheries, comprising not only single-family homes but also Western-type commercial facilities like malls and hypermarkets. The proportion of commercial uses has skyrocketed, in both downtowns and the Soviet-style housing districts. While rapid commercial development has brought about economic benefits, it has also caused problems. Downtowns have lost significant portions of their residential populations. Few cities, aside from Prague, have managed to protect their historic centers from the pressure of market forces.

Since 1990, the role of the public sector in urban development has been greatly reduced. Most new development is now initiated by private investors, in large measure because it is private developers rather than municipal governments that have the necessary funds. Large amounts of urban land, which were previously under public ownership, have been privatized. Unfortunately, this has led to great losses in public space. In the Bulgarian capital of Sofia, for example, an estimated 15 percent of public green space

Part of the main square in the old center of Prague. Such areas need some protection from the free play of market forces to survive. Providing this may be a problem in parts of Eastern Europe, because half a century of Soviet domination gave all forms of planning a bad name.

With the collapse of communism and large increases in many people's incomes, there has been a wave of peripheral single-family construction in many Eastern European countries. Here, a development outside of Sofia, the capital of Bulgaria.

was lost in 15 years. The trend of privatizing urban space is also evident in neighborhood design patterns. While Soviet-style apartment blocks are located amid free-flowing greenery accessible to all citizens, new housing developments are often walled and gated.

The planning response to these dramatic urban changes has been uncertain. Doubtless, the planning process has experienced several positive developments, such as increased citizen participation. However, shrinking public spaces, threatened historic landmarks, and Western-type sprawl hardly provide evidence of good planning. The 1990s were difficult for planners because of the unstable economic, political, and legal conditions, and because of the legitimacy crisis that plagued the profession. This legitimacy crisis came in part from the experience of half a century of Soviet domination. Most East European governments made a sharp turn to the political right and some viewed planning as a suspicious, quasicommunist activity. As a result, enthusiasm for the sanctity of private property overshadowed concerns for advancing the overall public interest—a concern at the very foundation of planning.

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