The expected outcome of the economic transition that has been unfolding in Bulgaria since 1989 is the construction of a market economy. The evaluation of economic policies of structural reform under transitional conditions is not a simple task. Viewed from a polanyian perspective, the creation of a market economy requires the installation of markets into those fields characteristic of economic reproduction, that is to say, labour, the means of production and land. This article contributes to the establishment of a mechanism that permits the evaluation of the effectiveness of economic policies of reform in a transitional period, beyond merely analysing the formal changes. Besides, the article determines the effectiveness of land reform in Bulgaria. Land restitution has been completed and property rights of land are fully guaranteed. However, the strategies taken by owners regarding the use of the land have limited the development of a land market. Therefore, it is observed that a breakdown exists between the installation of formal market institutions and the creation of market relationships in the land sphere.