Cannoneer,

The integrity of contracts is crucial.
Another enormous problem that I’ve never seen anybody discuss is top down government funding. Provinces, cities and localities have no authority to tax and collect their own revenues. Every spending decision has to be approved from above.
Great example is Crimea. This Russian majority area in Ukraine has terrific tourist potential, but the infrastructure is simply awful. In Sevastopol, for instance, they have a permanent rolling black out of tap water – each neighborhood gets a couple of hours of water in the morning and the evening. Except for the really expensive top end and the old official Soviet establishments with cockroaches and urine in the hallways, there are no hotels. When you visit you rent a private flat on a daily basis. In the kitchen there is usually a whole corner full of bottled water – that is for flushing toilets when the water is off.
Sidewalks, roads and everything else are ramshackle and inadequate.
The city and regional governments have no power to raise money themselves to fix this stuff. Their whole budgeting process is geared around lobbying the legislature to give them money.
In Crimea this is complicated by the nationalistic impulses of the Ukrainian Rada, who are still want to punish the ethnic Russians. Nevermind that they could get a lot of hard currency for tourism.

I think that this whole vicious cycle is actually an important part of a lot of the sucessionist sentiment in some of these autonomous areas of the FSU.