【正文】 ce). Many of the services that are critical to the functioning of a market economy simply did not exist—not just a ?nancial sector that could allocate investment funds ef?ciently, but also design, advertising, packaging, distribution, logistics, management, after sales services, etc. 2. Shifts in the Structure of Services in Transition Economies The share of services in GDP and employment has grown signi?cantly since 1990 in almost all transition economies. Compared to the high ine OECD average in 1990 when the share of services in employment and GDP was around 63 percent transition countries in Europe and Central Asia (ECA) lagged far behind: services accounted for 30–40 percent of GDP and employment. As of 2020, services shares had increased substantially. The greatest growth is observed in the Baltic States, which have almost converged on the OECD average of 68 percent in terms of GDP shares, although employment shares remain lower (Figure 1). The Central and Eastern European (CEE) countries that acceded to the EU in 2020 have also converged to a large extent. Much less progress has been made by the Central Asian 3 countries, where natural resourcebased activities continue to constitute a major share of GDP. There is also a distinct pattern in labor productivity performance. The CEE, SouthEast European (SEE) and Baltic states register an increase in productivity, both overall and within services (broadly de?ned to include government).Conversely, for those other countries where data is available, there has been a decline in the measured value of services output per employee. These countries also have not increased their overall labor productivity performance in the last decade. Noteworthy is the performance of the Baltic countries, where labor productivity in services outpaced the productivity increase in other sectors of the economy. Convergence with respect to highine OECD countries in terms of productivity levels is still far from being achieved, however. 3. Services Reforms and Growth Performance The forgoing snapshot of trends in the share of services in GDP, employment, output perworker, trade, and FDI reveal both substantial convergence toward European countries, but also a distinct difference between Central European/Baltic states and Central Asian and CIS (Commonwealth of Independent States) economies. Given that trade and FDI in services can be expected to be associated with the acquisition of new technologies, higher service standards and more effective delivery, these differences should help explain the observed higher labor productivity performance in services in the former. The question explored in the rest of this paper is whe