There are/were two general directions which could lead to long-term "better" Russia.
First: no "Russia" as such. Basically not only USSR should have been disbanded but RSFSR as well. Several smaller states would be of much less problem to their neighbors and would be seen as less potential threat. Smaller "Russias" could not rely on force to solve their problems. If not themselves pushed around too obviously that could lead to improved relations politically and economically.
Of course there was not a realistically peacefull scenario to achieve that result. USSR at least in theory was a voluntary union, while there was no legal ground to disband RSFSR barring comletely new legislation.
Second: a really dedicated help from the former "enemy". Jeffrey Sachs mentioned in the one of previous posts got a lot of flack for his role as economical advisor in USSR/Russia and of course he would try to show himself in favorite light but what he is saying in this rather long article (which I seem to continue linking year after year)is not IMO unreasonable though not very likely to succeed both for local Russian and outside reasons.
The NATO expansion is unavoidable at that time and yes it had basic anti-Russian motivations because East European states desired to join NATO exactly to prevent their potential re-absorbtion into Russain sphere however unlikely it seemed in 1991. Combined with seemingly leaving Russia to deal with it's problems that created an impression inside Russia that it in the end had been considered a defeated enemy and nothing more. That feeling could be alleviated by dedicated help by the West in the lines proposed by Jeffrey Sachs.
The chances of success of such a policy is slim at best but it could create a more prosperous more divercified and integrated with Europe Russia at the same time less militaristic as it would continued to view the West as friend despite all NATO shenanghias.
The first option is, IMO, a non-starter. It would seem like a massive humiliation to most Russians, and only set the stage for someone to rise as a future unifier to make Russia great again.
The second option is more likely but like you say the chances are quite slim. I have earlier commented that it would have been very difficult to find the international political will in the West for that. Basically, you would need to have all the major Western nations led by leaders who support it to some degree, and who have been able to convince their parties and main domestic allies that it is needed. It would have been a huge effort, and I suspect that it could be done, for political reasons, for Russia only (and leaving the smaller nations who were seen as "victims of the USSR" high and dry). So: a general "New Marshall Plan" for all of Eastern Europe, only that it would be a lot bigger than the original Marshall Plan was. Purely politically, it would have been a difficult system to put together. Even if, again, there would have been leaders who wanted it.
The more there would be Western money given to Russia, the more the Western governments would demand oversight and control over how that money would be used. It is hard to see Russia agreeing to giving its economy over to Western control any more than IOTL. As the Sachs article you linked points out, according to Sachs the problem was not bad Western advice alone. There was both good and bad Western advice (IMF's advice being generally bad) and then the Russians themselves also made bad decisions. Especially bad were the Russian decisions over the privatization of state assets, which was not transparent or guided by law (leading to huge corruption and looting of the state) and over the crash-privatization of the natural resource sector (when Sachs had counselled leaving these companies in state hands to provide stable incomes). The latter Russian decision created the corrupt oligarch class Russia has since "enjoyed".
What you would need, among with a great (and very unlikely) Western assistance plan, would be a very lucky combination of both Russian politicians and bureaucrats, and Western advisors, who not only are honest about helping Russia and its people instead of trying to enrich themselves or their cronies, and who also are very capable and through skill or luck manage to make all the right decisions to avoid various disasters like the incredibly corrupt process of OTL Russian privatization. Personally, I think this would require such a perfect storm of things going the right way for Russia that it would have been very, very unlikely. There would be always someone working on the wrong assumptions (even if he was honest) and then someone wanting to make himself a billionaire (even if he knew it would hurt the Russian people).
My favorite thought is as follows:
- Putin becomes president
- Stabilizes things inside the Russian Federation
- Stabilizes the southern region
- returns rule of law inside the nation
- Reaches out and works to increase western investments in russia
- Establishes fair relationships with its neighbors based on mutual trust and trade
- doesnt run again as president - he was immensely popular as was United Russia. He needed to pull both a George Washington and Ronald Reagan. saying i have done my job for the motherland, i now turn it over to the next set of leadership to continue the work with both the help of the Duma and the constitutional court to help keep the new Democracy safe inside Russia for the long term. Then he steps away and goes off to write his book, get a monument and or library and for the most part stays away from politics.
But then if he did this, he would not have been Putin. The same combination of skills, abilities, personality traits and personal connections that made him an arguably good leader for Russia in the first decade of the 21st century also made him the corrupt oligarch-in-chief he has increasingly been in the second decade. He was always ready to work outside the law and he was always ready to cooperate with people who cynically looted Russia. He also increasingly participated in this looting as the years went by. To get a leader to raise Russia to comparative stability and growth from the morass of the first decade since 1991 and then just walk away, you'd need someone else than Vladimir Putin.
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