ECA countries can be broadly classified into two groups – European – comprised of all the new European Union members and South-East European countries and Eurasian – comprised of members of the Commonwealth of Independent States. Countries such as the Russian Federation, Ukraine, Belarus, and Turkey, and to a lesser extent, Kazakhstan and Albania, are now somewhere in between the two groups. Nevertheless, the distinction between the categories still holds – namely that relative to Eurasian economies, European economies have restructured more rapidly and more aggressively. All countries in the region share the need for further reform, and still have a long way to go.
 In the European transition economies the World Bank's analysis stresses labor markets, pension and unemployment insurance systems, and social services, including social care. Labor markets in these countries need to become more flexible, and collective bargaining requires decentralization. Pension and unemployment insurance should be made affordable for all. Pension benefits should be linked to contributions through an expansion of defined contributions systems, both in their financial and non-financial form. Poverty remains a crucial issue and needs to be addressed through minimum pensions and means-tested social assistance. Social policy should also speed up deinstitutionalization and the development of social welfare and community-based services. Given that the problems of the Roma and persons with disability for inclusion in society are especially acute, special programs need to be developed to address the needs of these groups. European accession countries face a new mandate for this.
In Eurasian countries, the strategy focuses on promoting restructuring, institutional development, and poverty reduction. Macroeconomic stability and high-quality fiscal adjustment should be pursued before attempting fundamental labor market reforms. Until financial and administrative conditions improve, Eurasian countries should consider flat benefits for pensions and unemployment, or at least benefits that ensure a minimum standard. The limited ability of local governments to collect taxes, and the existence of large informal economies, mean that risk-mitigation and social insurance interventions are difficult to implement in this region. One of the big puzzles is how informal safety nets actually function before developing new formal systems. In the meantime, social investments funds and community works programs can help provide temporary employment.
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