Reconstructing Russia's Political Economy: The Transition from Soviet Central Planning to Market Reforms

Abstract

This paper examines Russia's transition from a centrally planned Soviet economy to a market-driven system in the post-Soviet era. The article explores the economic policies and structural reforms that were implemented during the 1990s under President Boris Yeltsin and the challenges faced by the Russian state as it navigated the shift from socialism to capitalism. It analyzes key events such as the privatization of state-owned industries, the role of oligarchs in the new Russian economy, and the impact of the 1998 financial crisis. Drawing on economic data, government reports, and contemporary accounts, the paper assesses how the market reforms have reshaped Russia’s political economy and contributed to the country’s current economic position. The article also explores the long-term consequences of these reforms on income inequality, social welfare systems, and regional disparities. The study concludes by examining the role of the state in modern Russia’s economy, particularly under the leadership of Vladimir Putin, and considers whether Russia’s post-Soviet economic model is sustainable in the globalized world.