The speed of economic reforms is not the only important determinant of
the success of the transition to a market economy: the transition of
government from a communist state to an institution supporting a marke
t economy is as critical. Survey evidence shows that Russia lags signi
ficantly behind Poland in the transition of its government, which may
account for its inferior economic performance despite adopting similar
economic reforms. I argue that the lack of turnover of old communist
politicians, and the creation of inappropriate electoral and fiscal in
centives for these politicians, may account for the poor performance o
f the Russian government, and suggest some strategies for improving th
e situation. (C) 1997 Elsevier Science B.V.