services, and soaring crime rates. Ominously, once disgraced communist leaders have been recalled to power. The transition process is more complicated than initially presumed. Two distinct processes of transition are under way: one from dictatorship to democracy, another from socialism to capitalism. They do not necessarily proceed in tandem. History has shown that it is possible to have capitalism without democracy; whether one can have democracy without capitalism has yet to be demonstrated.
While all transition economies face common problems, considerable differences exist in their initial starting points and in the policies they have adopted. These differences inevitably affect their performance and how they are perceived by outside observers as suitable targets for investment and trade.
The system displaced in the Russian Federation was a system of institutionalized one-party rule. The one party in this case was the Communist Party. The probability, however, is that similar dissatisfaction and resentment would be expressed against any political party that had institutionalized its power for more than 70 years. The system is attempting to emerge is democratic pluralism; however, more often than not events cause the system in place to resemble anarchy.
With respect to economic reform, the leaders of the Russian Federation "lacked the courage to apply the 'big bang' approach and now must pay an even higher social
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