If sustainable growth is a key goal for the economy of every nation, its desirability is perhaps even more acute in Russia. Even President Medvedev argues that the country s heavy reliance on natural resources makes it primitive and uncompetitive, calling for innovation and diversification.

But the authors of this provocative new book argue that this modernization may not be the best thing for Russia. Two factors present major obstacles: first, the country s physical and human capital was inherited in the Soviet era and was allocated geographically in a way that was not conducive to...