This book brings a completely new dimension into the study of determinants of international trade and foreign direct investment in the Central and Eastern European countries that recently joined the European Union. The main aim of the book is to shed a new light on the role of human development in the open economy context. The book challenges the conventional view that a country's success in the global economy is contingent on restricting expenditures on human development. On the contrary, it is argued that improvements in educational and healthcare systems stimulate international trade and direct investment, while the role of income and gender equality and degree of civil liberties is less clear-cut. The book offers an optimal blend of theory and empirical analysis with practical policy implications.