After an initial take-off during the first eight years following unification, the Eastern German economy started to stall and regress to its old growth path of the 1950s and 1960s. The initial quick convergence only compensated for the dismal stagnation that the expropriation and concentration...

A fundamental change is emerging in the World Bank's perception of the problems of the debt overhang and in its ideas for development strategies. The author examines the implications for debtor countries.