In the Western policy and academic circles, it has now become a widespread belief that Russia is not a democracy, even though a debate still continues on whether or not it ever had been a democracy during Yeltsin’s presidency. The paper will examine the domestic political setting in Russia from the early 1990’s, through the period of consolidation under Putin, to the present days of Medvedev’s modernization agenda.

Undoubtedly Putin’s coming to power has had a profound impact on the domestic and foreign affairs of Russia. His foremost object was an improvement and consolidation of the Russian state and the kind of policy he pursued domestically had a strong impact on the foreign policy course.

Overall, on a strategic level, there is no substantial difference in policy between Putin and Medvedev; both aim for a renewal of structural reforms to improve efficiency and governance. At the same time, the Russian leadership has a strong interest in ensuring that its political system is insulated as much as possible from the global democratic trends. There is a firm resistance to having other countries dictate to Russia how it should govern itself or what standards it should adhere to.

In the short- and medium-term Putin’s initial state-building achievements have brought political order and stability if compared to the early days under Yeltsin. It is argued, however, that in order to endure and survive, the current regime may essentially have to widen its legitimacy bases that would go beyond regime’s economic performance and leadership popularity and amount to liberalizing the political system. The real challenge is to drastically reduce the role of bureaucracy, which has nothing to gain from a change in the status quo, and government in the economy in general and state’s functions should become more transparent.