This report builds on evidence that, despite a decade of broad-based and uninterrupted recovery, significant number of people in transition Europe and Central Asia continue to feel dejected, and believe that their position in society has declined. While some of these feelings may be rooted in the uncertainty that has accompanied market relations and greater freedoms, something more fundamental is at play. Even in the decade of recovery and growth, inequalities continued to widen— especially between central and peripheral regions. The recovery failed to lift significant segments of the population out of poverty. Many people fell further behind.