Abstract
The purpose of this chapter is to describe the long-term evolution of the economy since independence compared to other transition countries. The bottom line is well known to observers of Ukraine: reforms moved quite slowly and the economy performed very poorly, lagging behind most of CEB, and even behind some FSU countries. A thorough description of this past history is a relatively easy task today, with plenty of quantitative and qualitative evidence available after twenty-five years. A much more difficult but perhaps more important task is to explain why Ukraine’s performance lagged so far behind; the answers are sought in the rest of the book. However, this chapter already provides a tentative hypothesis by showing an apparent visual correlation between slow reforms and poor performance. The chapter begins by demonstrating this for the entire post-communist era.
‘No pain, no gain? Or lots of pain with little gain?’
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Notes
- 1.
The catch-up is less evident in the TPI value than in other indicators. By 2012, it had risen to the nineteenth position in the rankings of the Doing Business report, higher than any of the CEB.
- 2.
Havrylyshyn (2006) discusses in detail the differences between Western billionaires and post-Soviet oligarchs.
- 3.
Boycko et al. (1995) are representative of this position. The simplest non-technical statement of the Coase theorem is as follows: if a demand for something develops, the market will provide it.
- 4.
- 5.
Indeed, if anything, we would provocatively suggest the surprise is that they were not reversed and even show a very slight uptrend. We leave that to others to investigate.
- 6.
Moldova did not have a colour revolution but is a fascinating, understudied case which slowly but surely, under a communist party government (Voronin), moved up and up, forward and forward.
- 7.
- 8.
Havrylyshyn (2006) provides a fuller statement of these two viewpoints including the issues of sequencing institutions before liberalization, and allowing the time to re-establish trading networks, wholesale-retail chains, and so on.
- 9.
First used in a positive sense emphasizing therapy, it later became a handy rhetorical device for critics who emphasized the ‘shock’.
- 10.
I thank Andrei Illarionov for pointing out that even to the present day, Belarus remains a puzzle, which high subsidies from Russia are not quite enough to resolve. But Belarus is very much an outlier, the exception that proves the rule.
- 11.
They did see a brief deterioration of HDI in the first two to three years, not captured in the table.
- 12.
But for Russian geostrategic aims, 25 % has been high enough to inflict a great cost to Ukraine’s GDP since 2013 through import restrictions, which are a likely violation of World Trade Organization rules.
- 13.
For Canadian-Ukrainians, like the present author, it has long been a source of irritation to always hear announcements of the USSR hockey team referred to as ‘the Russian team’, since many of its players have been Ukrainians, Baltics and Belarusians.
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Havrylyshyn, O. (2017). Main Trends over Twenty-Five Years: Delayed Reforms Lead to Poor Performance. In: The Political Economy of Independent Ukraine. Studies in Economic Transition. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-57690-3_3
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