The dismissal puts Putin at a significant crossroads. Russian law says he must name a new government within two weeks; his choice will be a strong indication of where the former KGB colonel wants to take the country–toward a free-market democracy or a capitalist but authoritarian state. Leading candidates for the post include men who served with Putin in the Soviet secret police as well as reformers from his hometown of St. Petersburg. “The process of what I call authoritarian modernization is already underway. If he picks a liberal reformer, it will be for the benefit of the West,” says Andrei Piontovsky, of the Strategic Studies Center, a Moscow think tank.

The timing of Putin’s announcement took the country by surprise, but the news was hardly unwelcome. A poll last month by Moscow’s VTsIOM agency found that the government of outgoing Prime Minister Mikhail Kasyanov had an approval rating of 37 percent, compared to 77 percent for the president himself.

During a meeting Wednesday with the outgoing government, Putin offered a more detailed, but still murky, explanation for the dismissal. He cited political and administrative reasons, including a desire to give the parliament, or Duma, ample time to consider his choice for prime minister. “Consultations with the parliamentary majority will take significant efforts and could involve elements of uncertainty,” he said. That explanation puzzled political analysts, who point out that any Putin pick is likely to whiz through the Duma, where the Kremlin has a rock-solid majority.

Another explanation offered Wednesday by Putin makes more sense: the voters need to have as full a picture as possible when making their choice in next month’s presidential elections. Putin, who could garner as much as 80 percent according to recent polls, may be looking for the largest mandate possible for the difficult economic reforms that he has pledged to implement in his second term.

The departure of Kasyanov, a man with strong ties to Russia’s superrich oligarchs, has been rumored for years. The fact that it took so long is a measure of Putin’s cautious nature. Kasyanov’s political star waned considerably last fall when he criticized the jailing of Russia’s richest man, Yukos Oil head Mikhail Khodorkovsky, as bad for the country’s developing economy. The sustained legal attack on Yukos has political overtones and the Kremlin’s implicit blessing.

Kasyanov, who was given just several hours notice of his sacking, offered a tepid defense of his job performance, commenting Wednesday, “For four years, the government worked fairly well and the country achieved good results.” Among the leading candidates for his job are Aleksey Kudrin, a deputy prime minister under Kasyanov, who worked with Putin in St. Petersburg in the 1990s. Kudrin has functioned as Putin’s go-to man on economic questions–issues that Putin has put at the top of his agenda. Viktor Khristenko, another deputy prime minister, was named Tuesday as the interim prime minister and could stay on at the job. He is a deft player of Kremlin insider politics, but critics question how ably he would lead Russia’s vast bureaucratic apparatus. Steven Dashevsky, an analyst with the ATON capital group in Moscow, believes both men “would be equally well received” in Russian financial circles. “The prime minister must, first of all, understand how the economy works, so as to be an engine of reform,” says Dashevsky.

Another candidate–one who would not be cheered by the West–is Defense Minister Sergei Ivanov, a former KGB officer who has largely failed in his attempt to reform Russia’s dysfunctional military. Choosing Ivanov would be a mistake, comments analyst Stanislav Belkovsky. “It should be someone with a liberal image. You understand, the image part is important,” says Belkovsky, of Moscow’s National Security Council–a think tank that wants to see Russia restored as a world power. “It shouldn’t be a man [from the military or special services]. You don’t want to irritate the West or have him competing with Putin.”

Political analysts commented Wednesday that Putin is likely to choose a new prime minister as early as later this week in order to give the Duma ample time to approve the candidate before March 14 election. The abrupt government shakeup is also having the effect of stirring up interest in a lackluster presidential campaign. Voter apathy is high given the near certainty of a Putin victory. As if to underscore the lack of a contest, two of Putin’s more serious challengers said Tuesday they were considering a withdrawal from the race. Irina Khakamada, who polled less than 5 percent in recent election surveys, complained in a statement released Tuesday that “the competition of ideas and alternatives is becoming impossible. If it does not change in any way, I do not rule out the possibility of withdrawing from the elections.”

The campaign of Sergei Glazyev, a former Communist running on a tax-the-oligarchs platform, similarly griped that Putin is unfairly hogging pre-election television airtime and is threatened to drop his bid. In the upside-down world of Russian politics, this would be bad for the Kremlin, which is keen on serious candidates like Khakamada and Glazyev remaining in the race to lend legitimacy to the election and keep voter turnout above the required 50 percent.

If nothing else, Putin’s shakeup of the government–the first in his four years in office–was a reminder of how different he is from his predecessor, Boris Yeltsin. During Yeltsin’s tumultuous last 19 months in office, he went through four prime ministers. During his Wednesday visit to the outgoing ministers, Putin made a dig at Yeltsin, noting that it was the first time a president made such a postdismissal visit to the prime minister’s office, since “all previous events of this kind were accompanied by conflicts and problems.” For the ousted Kasyanov, that could only have been cold comfort.