This record is in striking contrast with that of the post-communist reform front-runners—the Czech Republic, Poland, and Hungary. While such heterogeneity is not necessarily surprising, given the broad differences among post-communist nations, the main challenge is to explain its causes and to identify factors underlying the successes and failures of the various countries.

Explanations and answers abound, reflecting different analytical perspectives and schools of thought, as well as divergent political and ideological platforms. While no one denies the importance of historical, social, political, and economic contingencies, attempts to identify those which may have been of particular relevance have stirred great controversy. Whether there is a universal set of policy prescriptions that, if properly implemented, could ensure a successful post-communist transformation regardless of such contingencies is also actively debated.

Most scholars seem to agree that, no matter what the underlying realities, on the surface reforms are advanced or derailed by concurrent political processes. "The diagnosis usually centers on the political sphere, with dilatoriness, rent seeking, and lack of policy credibility the prime suspects" (Murrell, 1995:164). The dramatic failures (until quite recently) of the Ukrainian reform effort, which in many ways mirrored that of Russia, are ascribed to the actions of powerful blocs that obstruct reforms that would have (1) reduced or eliminated the "rents" they received, and (2) undermined the bases of their political and economic power in the system (Havrylyshyn et al., 1994). As for Russia itself, in the opinion of Sachs (1995:72), "the major weakness came in the conception and execution of reform measures." Although Sachs denies that political or social opposition to reform in Russia played any significant role in blocking change, a position that is scarcely corroborated by the facts, his analysis remains focused on the policy side.

Indeed, Russian policy misconceptions and failures are too obvious for any analyst to question their share in the responsibility for the current crisis. Nevertheless, the puzzle remains of why financial stabilization, economic liberalization, and other indisputably sensible policy prescriptions were implemented relatively easily in some former communist countries, while elsewhere, and particularly in Russia, they met with so much resistance. This chapter examines that question, attempting to bring an analytical perspective to bear not only on the choice and implementation of policy prescriptions, but also on the reasons for their rejection and failure. It argues that major lacunae and deficiencies in the institutional infrastructure of the Russian economy, and in particular the unavailability of functional markets for factors of production, are largely responsible for the lack of progress in the Russian reform enterprise. Policy measures that would have enhanced efficiency if implemented in a completely functioning institutional environment in fact stimulated counterproductive behavior and imposed substantial efficiency losses when they were implemented in what might be termed an "institutional void."