The purpose of this paper is to discuss major factors behind failures and successes in structural adjustment. The analysis includes the experience of four major European countries: France, Italy, the United Kingdom and West Germany. These countries are known for diverging performances. Germany has the highest real per capita income, the lowest inflation, and the strongest currency, while its unemployment rate, though depressing by her own historical standards (8 per cent in 1986 as compared to 1 per cent on average during the sixties), is distinctly below those of the other three countries. On the other side of the spectrum is Italy, but this nation is in fact composed of three economies - a highly developed and rapidly growing one in the north, a very backward one in the south and a dynamic economia somersa almost everywhere. The United Kingdom has become the only oil-rich country in the sample, but probably the one which has been struggling most with micro-economic inefficiencies and the power of interest groups (labour unions in particular) in the economic-political decision process for decades. France has become an industrial and technological leader in a shorter space of time (starting its economic transformation in the late fifties) than any of the other sample countries, but it also was struck by an unparalleled experimentation with socialism during the early eighties.