Our objective is to try to understand the rationale for and the effectiveness of different economic policies in a transition. We provide consistent, comprehensive analysis covering the interlinked questions of: i) how to achieve sustained, balanced/diversified economic growth; the main constraints are: government failure, human capital limitation, and corruption; ii) "what break-ups do to countries"; breakup countries experience deeper and shorter economic crisis, growing afterwards faster; iii) is there a prospect for economic convergence in the "club" of the 28 former centrally planned economies; we explore for a first time the issue-they are expected to reach half the distance to their non-growth steady state in around 50 years; iv) what is the quality of governance relationship with the resource "curse" or "blessing"; negative effect would obtain only in countries with poor institutional structures; v) what insights to the Dutch disease transmission mechanism can be provided by the Salter-Swan model; vi) is the Balassa-Samuelson hypothesis valid; we confirm its validity; and, vii) what are the most important sovereign yield spreads determinants, and propose the impact from financial market volatility; and, our empirical approach takes account of recent advances in econometric analysis of time series-fractional cointegration.