Practitioners and scholars of postcommunist politics disagree on the accomplishments of administrative reforms in new Eastern European democracies. The transformation of the public sector after 1989 has aimed to consolidate the democratic process and enhance economic development. Skeptics, however, argue that administrative reforms face serious challenges in the context of economic liberalization, insufficient capacity for modernization, and cultural legacies of the past. The authors judge reform effectiveness by testing the impact of civil service reform on government transparency and foreign direct investment. The results of the empirical analysis confirm that once reform is adopted, administrations become more effective at reducing corruption and attracting investment. Despite the delays and difficulties of implementation, the adoption of reform is important in and of itself, and countries can expect positive results sooner than skeptics predict.