We review the transition of the Russian banking sector focusing on the interplay between ownership change and institutional change. We find that the state's withdrawal from commercial banking has been inconsistent and limited in scope. To this day, core banks have yet to be privatized and the state has made a comeback as owner of the dominant market participants. We also look at the new institutions imported into Russia to regulate banking and finance, including rule of law, competition, deposit insurance, confidentiality, bankruptcy, and corporate governance. The unfortunate combination of this new institutional overlay and traditional local norms of behavior have brought Russia to an impasse - the banking sector's ownership structure hinders further advancement of market institutions. Indeed, we may now be witnessing is a retreat from the original market-based goals of transition.
The article makes an attempt to identify link between the models of public service and some effective methods of stimulating civil servants’ performance. Making use of the basic elements of the institutional theory helps draw a conclusion that development of the public civil service in accordance with the NPM models does not only take into account any positive externals for modeling informal relations, but ignores their historical, social and cultural role in the country. Key words: civil service, gifts exchange theory, institutional economy, stimulation of civil servants, models of bureaucracy.