By the mid-1990s, Central and East European transformation had gradually consolidated. Institution-building had made progress, macroeconomic stabilization was succeeding, democracy and a market economy were taking root. Most of the countries had achieved economic growth and had begun recovering from the sharp decline of the first years of transformation. Progress, however, was uneven: the Central European countries advanced steadily while the Balkans remained painfully behind. At the end of the twentieth century, Ilya Prizel of Johns Hopkins University noted:

The contrast between these two regions was indeed enormous, and the pace of change erratic. Major turmoil gripped most of former Yugoslavia. In 1991, the multinational republic dissolved and a bloody civil war lasted until 1995, damaging several parts of the country, especially Bosnia-Herzegovina and parts of eastern Croatia. The Kosovo crisis came to a head at the end of the 1990s. Serbia launched a destructive war, and the NATO response devastated Serbia. After Kosovo, the war escalated to Macedonia as well. International pressure and peacekeeping forces were able to stabilize the situation.