WHERE DO WE GO FROM HERE? Economic trends, social trajectories and policies of identities in post communist capitalism. The European Bank for Reconstruction and Development(EBRD) has governance and enterprise restructuring as basic indicator of economic transition and defines it as ef­fective corporate governance and corporate control exercised through domestic financial institutions and markets, fostering market-driven restructuring. The corporate governance is most often defined in terms of the roles, responsibilities, and interactions of top man­agement and the board of directors. Using data of South-East European economies, will be examined the interrelation­ships between governance and enterprise restructuring, set of policies that influence the governance patterns, gross domestic product and foreign direct investments. Two basic hypotheses to test governance and enterprise restructuring: • 1 st Hypothesis: governance and enterprise restructuring depends on set of poli­cies: large-scale privatization, small-scale privatization, price liberalization, competition policy, trade and foreign exchange system, banking reform and interest rate liberalization, securities markets and non-bank financial institutions and overall infrastructure reform; • 2 nd Hypothesis: governance and enterprise restructuring is positively influenced by gross domestic product and foreign direct investments dynamics. The academic significance of the topic is in determining the factors that influence governance and enterprise restructuring, as well as, its overall importance in the develop­ment of Western Balkans transition economies literature. Theoretical and literature framework 1. Institutional changes and corporate governance mechanisms in national governance systems There are many studies conducted on determining the way stakeholders can use cor­porate governance mechanisms in transition. Most often is used the agency theory to explain the changes in ownership structure in an environment of dominance of government and insti­tutional owners 50 , as well as, the differences of transition economies’ ownership structure in comparison to developed countries 51 . Noteworthy contributions are the studies on firm per­formance and governance structure in political and regulatory environments that have a sig­nificant impact on corporate governance systems 52 . Also, there is significant literature that 50 Chan, H. K., Lin, K. Z.,& Zhang, F.(2007). On the association between changes in corporate ownership and changes in auditor quality in a transitional economy. Journal of International Accounting Research, 6, 19–36. 51 Young, M. N., Peng, M. W., Ahlstrom, D.,& Bruton, G. D.(2002). Ownership structure and corporate governance: Can we generalize from US evidence? Best Paper Proceedings, Academy of Management Annual Meeting. 52 Firth, M., Fung, P.,& Rui, O. M.(2006). Firm performance, governance structure, and top management turnover in a transitional economy. Journal of Management Studies, 43, 1289–1330. 23