Manufacturing miracles, welfare pathologies and the accumulation of national debt. On the political economy of east central Europe 20 years of democracy and market economics in east central Europe have been a great success. This distinguishes Poland, the Czech Republic, Slovakia, and Hungary from almost all of the other post-Socialist states. Their model of success has two components. First, these four states succeeded in becoming the manufacturing site for trans-national companies. That creates jobs and brings capital into the region. Second, the governments softened the social hardships of the transformation by means of welfare state policies. The price is an enormous national debt. Since EU accession, it has been necessary to take action against this. Dissatisfaction is growing, and populist forces are increasingly supported.