Abstract
This essay studies the development of a market-based payments system in the former Soviet Union. Particular attention is given to the costly delay in establishing well-delimited currency areas. Differences in policies between the newly independent states are explained by differences in political and economic preconditions. These differences determined whether powerful groups preferred a monetary system that facilitated exchange and access to new markets, or one that facilitated redistribution of wealth. Considering Russia's monetary reform, we fmd two main reasons for the slow pace. The fIrst is the lack of a coherent reform program during a period in which conditions would have allowed a radical dissolution of the ruble zone. The second is that once such a program had been developed, conditions had changed in such a way that Russian state enterprise managers preferred a monetary system that enabled them to acquire rents more effectively. The great differences between both outcomes and preconditions for the 15 successor states make the break-up of the ruble zone a clear example ofthe importance of political and economic preconditions for the possibility of undertaking successful economic reforms in countries undergoing a major systemic change.