Economic modernization in Russia is heavily reliant on increased market competition and diversity within the Russian economy. However, modernization has been largely unsuccessful due to a misalignment between the goals of the Russian modernization agenda, including those in the PCA and P4M, and the state’s behavior both domestically and internationally. This study finds that domestic institutions within Russia continue to execute on a legislative agenda contradictory to their modernization agenda due to both state security priorities and the power imbalances within the government.