The article considers strategic issues of modernization of the transition economy. The analysis is based on the methodology of the World Economic Forum where special attention is paid to the sequence of the transformation stages. The main conclusion is that modernization should combine implementation of the governance mechanisms with the beneficial use of comparative advantages of the national culture. In fact, modernization of the transition economy should be evolutionary. It is precisely this course of development that is relevant for Azerbaijan which has successfully upgraded its economy in the recent years.
