The transition in Russia to a partially market-driven economy has failed to produce sustained and broad-based economic growth. The gains of economic growth are concentrated at the top of the income distribution, leaving a sizable part of the population trapped in conditions of low incomes. While abject poverty has largely been eliminated, around 40% of the population struggle to purchase more than basic consumer necessities. Spending on food occupies nearly half of household budgets for the lowest income decile. State social spending, which constitutes an increasing share of total income, is relatively non-progressive. Most is not means-based, but preserves the categorical benefits structure of the Soviet era. A combination of the bureaucratic-authoritarian institutional framework for decision-making and the strongly rent-based relationship between economic and political elites, severely limits policy options.