What did the study of transition economies contribute to mainstream economics?

The transition from state socialism to capitalism or market socialism has been a profound, indeed revolutionary, change in the socio-economic system of countries with about a quarter of the world’s population. The IFIs (International Financial Institutions) have been closely involved in it for more than 20 years. It has also given rise to an extensive academic literature. The purpose of this paper is to argue that this experience, and the policy-related and academic discussion about it, has made a useful contribution to mainstream economics. This contribution is analyzed in the following sections.