The article evaluates the development of the transition economies’ potential in the area of the state administration system. The author points out the primary challenges the countries faced at the initial stage of transition and gives a thorough analysis to the peculiarities of the strategy options aimed at developing potential and followed by various groups of countries afterwards. The article illustrates that the processes of developing and losing potential opportunities took place simultaneously. The author concludes that despite all the efforts to update the system of state administration taken by transition economies, these countries are still experiencing some difficulties due to the sluggish development and lack of potential required in some areas of the state administration system. The final part of the article outlines the possible reasons for such failures and the basic experience gained in the developing of the state administration potential in the period of transition.