1999 was supposed to be the time of a big push for reform in Russia after a long period of inactivity. But since the financial crisis of 17 August 1998, the Russian economy has been 'stuck in transit' - unable to make the leap to a fully functioning market system and with the political process paralysed by campaign fever. This report explores the traumatic events of August 1998, their underlying causes and the deep flaws they exposed in the process of reform. Drawing on a series of major new research programmes at the Russian European Centre for Economic Policy (RECEP) in Moscow, the report discusses the policy options for rebuilding the Russian economy once the elections are over. The Report concludes that the elections have created a post-crisis environment in which politicians are taking a cautious approach to economic policy. This has both positive and negative consequences: positive in that policies have become predictable, but negative in that the political will to engage in the large-scale institutional and structural reforms essential to sustainable recovery is still absent.