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Institutions govern the behavior of all actors in a society. The Russian transition to a market economy is mainly a matter of reshaping society's institutions to make them more conducive to a market efficient behavior. But how can suitable institutional changes be achieved? This article discusses the experiences gained through a series of policy exercises with stakeholders in the Russian regional forest sector. The purpose of the exercises was to initiate a participatory policy process leading to the elaboration of implementable proposals for a new regional forest policy. The prospects of such policy exercises to make an impact are best if the systemic interventionist manages to affiliate with active regional stakeholder groups and if support from the regional authorities and external financial sources can be secured. Such support will establish an effective incentive structure that will contribute to the legitimacy of the policy process. In the current Russian situation there is a lack of organized stakeholder groups with whom to conduct a dialogue. Copyright 2006 by The Policy Studies Organization.