Overdue reforms in Russia cannot only be defined as «structural» or «economic». It is about the package of changes in all major public spheres, the modernization of all sectors of life. However, among these reforms the key point, on which depends the fate of all transformations and the main political obstacle of economic modernization of the country is the extremely low efficiency of the current system of public administration. That is why numerous programs of socio-economic development of the country, developed over the last 15 years, have never been implemented in practice. The illustration are unsatisfactory situation of the pension system, health care, immigration policy and other areas that affect the quality of human capital - the most important factor of modernization. Public administration reform is a necessary condition for the success of the transformation of all sides of Russian life, including the economy. This reform should be built on the principles of decentralization of power, transferring many of its functions to self-regulating and public organizations, privatization of the economy.