This book presents, for the first time, a comprehensive analysis of the different factors behind the 1997 political, economic and social crisis in Albania. It shows that the crisis was both predictable and complex, and not simply a matter of a disgruntled population attempting to regain their money. Using extensive and detailed evidence Daniel Vaughan-Whitehead identifies the major reasons for the growing discontent and final explosion: the increase in unemployment, the collapse of industrial production, the inefficiency of the banking system, the limitations and drawbacks of foreign investment, the failure of mass privatization, falling living standards and rising poverty.

He examines the consequences of the crisis at the enterprise level by region, sector, industry and property from using a unique survey of over 1,000 enterprises. In conclusion he offers a series of policy recommendations with a view to regenerating production whilst avoiding a new social explosion in a destroyed economy further threatened by political instability and the conflict in Kosovo. This unique book will be essential reading for all academics working in the area of transition as well as policy-makers from international organizations involved in transition economies.