Abstract
The reasons why small business development has been disappointing in Russia compared with other transition countries such as Poland and the Czech Republic are here analyzed. It is, however, suggested that the picture may not be so gloomy as official statistics suggest. As far as St. Petersburg is concerned, it has witnessed an exceptional - by Russian standards - growth in this sector in the 1990s, although it still trails compared with Moscow. This, despite the lack of support from the local administration and despite having an income per capita close to the Russian average. Again official data may be at fault through undervaluing the importance of the small business sector in the early 1990s.
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