Edited by David Parker and David Saal
Saul Estrin and Adam Rosevear Introduction This chapter discusses the process of privatization in Ukraine.1 Ukraine left the former Soviet Union to become an independent country in 1991, with a seemingly valuable structure of economic and agricultural assets owned by the state (see Hare et al., 1999). In addition, Ukraine was able to call upon ﬁnancial and technical assistance from the international community, thanks to its advantageous geopolitical position between Russia and Europe. The new democratic government under President Kravchuk had a popular mandate to chart the future course of Ukraine, following the 90 per cent vote for independence from Russia. The government could have followed the example of transition already established in neighbouring Poland or Hungary by institutionalizing the necessary reforms to commence the transformation of Ukraine into an economically successful and pluralistic society. However, this apparently good starting position was wasted. Ukraine has instead suﬀered a large fall in national output, near hyperinﬂation and a series of political corruption scandals. In this chapter, we will examine in detail the progress in one crucial aspect of the transition process: privatization (see Blanchard et al., 1991; Estrin, 1994; Nellis, 2000; Djankov and Murrell, 2002). We will chart the complex and tortuous process whereby privatization was accomplished in Ukraine, as well as employ new evidence from a recent enterprise-level survey to establish empirically the consequences of the ownership change. There was signiﬁcant achievement in terms of the growth of the private sector: according to the EBRD, the private...
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