This chapter introduces the economic and political context in Central Eastern Europe (CEE) at the wake of the democratic transition. It compares these circumstances to those in Western Europe and then goes on to trace the political and economic development of CEE since the onset of democratic rule. This economic and political context provides important background information to get a better understanding of coalition politics in the ten CEE countries studied in this volume. The chapter shows that the countries in CEE had quite different starting conditions. They differed substantially on factors such as level of industrialization, unemployment, and economic growth and they opted for different strategies in the transition from central planned to a free market economy. While most of the countries had reached comparatively high levels of market orientation within a few years of democratization, considerable differences remained when the countries joined the European Union. The ten countries also differ with regard to their democratic traditions, and opted for different institutional designs on matters such as the electoral system, the role of the head of state, and the organization of the legislature. High uncertainty associated with initial design choices has resulted in frequent institutional reforms. The communist legacy not only affected the development of party systems, it also affected the political culture in the polities. In conclusion, the countries studied in this book show both initial and persisting variation in terms of economic performance, their institutional framework, the social conditions, and attitudes towards politics among the electorate. © Oxford University Press 2019. All rights reserved.