Economic Reform in Russia
Since 1992, Russia has undergone a complex process of economic transition. It is a process that has been made more difficult due to the lack of theoretical and practical guidelines on the problem of transforming a communist command economy into an open capitalist one. All the existing theories on such a transformation tended to focus on the reform of rural subsistence economies, rather than on an industrially developed one, such as Russia. Yet, despite the absence of an effective economic blueprint, the state of the Russian economy, at that time, was such that the Yeltsin government was required to take action quickly, in order to save the country from economic ruin.
However, the radical reforms which were introduced in January 1992, and were termed 'shock therapy', did not prove to be successful and, rather than encouraging the growth of a market economy, they produced an awkward hybrid of capitalism and old-style Sovietism. Russian policymakers, and many foreign economists, expected that the influence of communist ideology would eventually give way as the disciplines of capitalism took over, but the Soviet political conditions and culture appear to be offering a greater degree of resistance towards capitalism and the market than was originally imagined. Therefore, unlike in Poland where 'shock therapy' rapidly transformed the economy into a market system, the reforms initiated by the Yeltsin administration, and those which have followed, face a continuing struggle to break Russia's link with its communist past, and transform it into an efficient, functioning market system.
Background Information.
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