The message of neo-institutionalism to policy-makers is that institutions matter. Markets cannot exist without institutions, and market-like regulations are even more dependent on institutional contexts. This lesson is perhaps even more evident in the Russian experience of creating a market economy. Some economic advisors pretend that a free market economy can be established swiftly, disregarding deeply institutionalised practices of policymaking in Russia. Neo-institutionalism, however, tells us that such a transition will succeed better if institutionalised practices are fully understood, and exploited to support the establishment of a more market-oriented economic system. Although regulatory reform in Western Europe is much less of challenge, western governments must also acknowledge that policy-making takes place only within the context of formal and informal institutions that are key to success.