The Political Economy of Sustainable Development

The paper justifies the proposition that the main material cause the failure to achieve the strategic objective of moving towards sustainable development, which was stipulated in the Concept of longterm socioeconomic development for the period 2008–2020, is outdated and depreciated equipment and technologies used in the Russian economy. Efforts in this direction have yielded limited results, thus posing a major threat to national security in the long term. Accordingly, a key objective of the strategy of socioeconomic development for the coming period must be the transition of the Russian economy to the new technological mode, and all sections of the strategy and performance indicators should target it. The transition to a new technological mode can be maintained by economic sectors forming a technological “core of self-development” (producing means of production to produce means of production). The creation of such a core requires a specific set of institutions. In this situation, the country needs the institutions of state support of investment activities, which, however, will bring significant results only provided a critical mass of entrepreneurs is involved. This requires constantly increasing business demand for new equipment and technologies. To foster this demand it is necessary to ensure the existence of both economic incentives for the entrepreneurs engaged in modernising the technological base, and institutions that prevent the risk of nationalisation. These institutions should guarantee the predictability of economic policy, form a positive perception of high-tech investment products of Russian origin, as well as generate public support for the proposed strategy.