Russia's Economic Modernization: The Causes of a Failure

In this short study of attempts that have been made in recent years to modernize the Russian economy, the author explains why they have all ended in failure. Unlike most experts, he focuses on politics and ideology.

He stresses that the idea of modernization runs counter to the historical vision that is now propagated by the Russian leadership, to the system of governance that it has chosen and to Russia’s current path of isolation from the West. In his view, such political choices have rendered modernization of the Russian economy unfeasible. The author also points to other problems: the effects of privatisation, which have made investment in new industrial facilities unprofitable, the declining quality of business leaders who are chosen for their political loyalty and the lack of independent big businesses that could insist on reforms being carried out.
Vladislav Inozemtsev is a Russian economist, Doctor of economic science and the founder and director of the Centre for the Study of Post-industrial Society (founded 1996). Between 2002 and 2012, he was Editor-in-Chief of the journals Svobodnaia Mysl and Russia in Global Affairs, as well as of the Russian version of Le Monde diplomatique. A professor at Moscow State University (MGU) and the Higher School of Economics, he is a non-resident Senior Fellow at the Institute for Human Sciences in Vienna and at the Center for Strategic and International Studies in Washington.
Download the full analysis
This page contains only a summary of our work. If you would like to have access to all the information from our research on the subject, you can download the full version in PDF format.
Russia's Economic Modernization: The Causes of a Failure
Related centers and programs
Discover our other research centers and programsFind out more
Discover all our analysesMoldova's Crucial Parliamentary Election. What's at Stake?
On the occasion of Moldova’s National Day, August 27, 2025, Chișinău hosted a high-level European delegation composed of Emmanuel Macron, Friedrich Merz and Donald Tusk, who sought to reaffirm their support for the country’s sovereignty and pro-European course. This unprecedented and highly symbolic visit took place at a pivotal moment. Moldova is preparing for decisive parliamentary elections on September 28, whose stakes extend far beyond the national framework.
War as Social Elevator: The Socioeconomic Impact of Russian Military Keynesianism
In order to finance its war effort, the Russian state has spent substantial sums of money and implemented a form of “military Keynesianism” that is transforming society at both the socioeconomic and cultural levels. This has partially rebalanced the wide disparities in wealth, levels of consumption, and social prestige in Russian society by granting significant financial and symbolic advantages to peripheral Russia, which has long been overlooked by the central government.
The Contradictory Impacts of Western Sanctions on Economic Relations between Russia and Sub-Saharan Africa
How does Russia maintain economic ties with Africa despite Western sanctions? An analysis of investments, trade, and the circumvention strategies deployed by Moscow.
The Caspian Sea as an Emerging Energy Hub : Potentials and Limitations
This report analyzes the prospects of the Caspian Sea region — and its key actors except for Russia and Iran — becoming an important energy hub serving the needs of the European Union (EU).