Sources of Ukraine's State Regulatory Capacity

• In Event: The Impact of the Russia-Ukraine War on Ukrainian Society

Abstract

For a long time, Ukraine’s economy has been seen as an example of failed market reforms while the Ukrainian state has been plagued by oligarchic capture and regulatory inefficiencies. Yet, Ukraine’s forceful response to the Russian military invasion makes us question the thesis of its state weakness and economic fragility. The paper investigates sources of institutional resiliency of the Ukrainian state through the focal point of pre-war capacity building. I argue that one good way to find a reliable empirical manifestation of institutional capacity is to examine the causal links between improvements in formal mechanisms of state regulatory function and their temporal effects on the economic performance of small and medium-sized companies across Ukraine’s provinces. Utilizing original data covering 20 years of regulatory changes and small business performance across Ukraine’s 26 provinces the paper documents the progress in capacity building. The content and meta-analyses of national and provincial regulatory statutes and bylaws enacted in Ukraine between 1991 and 2021 show that through the gradual development of formal regulatory mechanisms of state economic intervention, the Ukrainian state has been able to emerge as an effective regulatory force of government policy implementation.

Author

• Dinissa Duvanova, Lehigh U