They tried to convert from a government controlled planed economy to a capitalist one by privatizing, but did not have the institutions and laws which are necessary for private enterprise to to function. What they ended up with, was massive corruption, and a dysfunctional economy. Putin has deprivatized some industries, curtailed democratic reforms, suppressed dissent, and in general is retreating from the reforms of the 90’s.

Probably because totally planned economies (ie Communism) don’t work! Power corrupts, wealth stagnates if you don’t believe in generating it, and people crave more and are denied the opportunity to work for it.

Social socialism and financial capitalism, I say!

economy was broke long before, there were shortages of food and basic consumer goods since 1980’s
That happened b/c Soviet government only cared about military might, and not its people.

Privatization in 1990’s was an attempt to fix that, since private firms do try to keep consumers happy.

Economy continued to decline in 90’s b/c of inflation, weak enforcement of contract laws, lack of trust between economic agents, asset stripping by private owners who felt they might loose their property before they can make operations profitable.

1995 was no different than 1994 or 1996.
Government default and currency devaluation of 1997 happened because IMF insisted that Russia use its pay off foreign investors instead of building domestic economy.