Second, revised and extended edition In this second, revised an extended edition the evolution of emerging Europe is analyzed against the background of major changes in the constitutional, fiscal, regional and neighborhood policies of the European Union. The basic points of reference remain, as in the first edition, the global economy and institutionally informed standard economic theory. The book, which in part, or in its entirety, is suited for a textbook, is oriented not only for classroom use, but towards a broad international audience of academics, policy advisors and informed intellectuals with an interest in central and eastern Europe and development in general. This book provides an overview of the economic challenges of the post-transition period when the Communist past is no longer a defining feature of development. Interpreting successes and failures in a single analytical frame the book is devoted to the new agenda faced by middle income countries in the double challenge of globalization and Europeanization. We analyse if, when, and to what degree, joining the European Union provides a solution, and how new members can contribute to the Lisbon Strategy of the EU. We find that solid finances, reliance on foreign direct investment, public policies committed to the public purpose rather than to vested interest, and impartial regulation and enforcement of rule of law are among the major components of success. The book also addresses the two `extreme` cases of Russia and China , both seemingly defying all existing theories. Finally separate chapters analyse what way institutions and regulation matter in a growingly transnationalized world dominated by the information technology and changes triggered by it.