After the global financial crisis, Russian President Dmitry Medvedev made modernization the centerpiece of his economic policy agenda. Most importantly, modernization meant diversifying the Russian economy to become less dependent on natural resource revenues. Medvedev, like many other policy makers and scholars, argued that the financial crisis hit Russia especially hard because of Russia’s over-reliance on oil and gas revenues and its concomitant failure to nurture high-technology export industries.
The latest Putin administration now must decide whether or not to press forward with an aggressive modernization agenda. Medvedev and economic liberals both within and outside the government have lobbied strongly in favor of doing so. However, seriously pursuing such a modernization agenda would be an impossible and perhaps even counterproductive policy at this point in time, for three reasons. [...]