Abstract
The Czech and Slovak Republics - until 1993 two parts of former Czechoslovakia - offer a unique reform comparison. Even though Slovakia faced higher unemployment since early transition and it was subject to greater reform failures, the two countries experienced similar macroeconomic paths over the first decade of transition.
However, since the currency crises of 1997(8), their depth of reforms has been very different, with Slovakia making major strides to improve the labor market. We suggest two explanations, one based on fiscal pressures, the other stemming from political developments