Abstract:
The general field of economics is becoming more acceptable to the idea that social
institutions have significant impact on sustainable economic development. This
dissertation provides original evidence in support of the empirical importance of social
institutions and sheds new light on post-socialist development by focusing on Ukraine.
Advocates for increasing the role of government in economic development have
overlooked the idea that policy effectiveness depends on compatibility between the
policy-designed institutions and the underlying indigenous culture. If the policy design
disregards the indigenous culture, a mismatch between de jure and de facto systems of
governance results in the economically inefficient institutional lock-in situation. This
dissertation demonstrates that policy effectiveness is subjective to the compatibility
between the policy change and the underlying social institutions. I also present evidence
x
that Ukraine has become a consolidating democracy and emerging market economy
through self-governance and economic liberalization rather than centralized development
planning and totalitarian control over the economy. Chapter One starts by considering the
main policy debate about the proper role of government in economic development. This
chapter provides a comparative political-economic analysis of institutional development
in Ukraine, Russia and other former Soviet Union countries. Chapter Two presents an
analysis of Ukraine’s privatization to demonstrate that the policy effectiveness is
subjective to a social distance between the policy-designed institutions and the
indigenous culture. Chapter Three presents an applied microeconomic analysis of the
policy effectiveness in the context of Ukraine’s agro-producing industry created in a
wake of the 1999 Reform. This chapter focuses on the transformation of the property
rights regime by examining the policy effectiveness of reform.
