INSTITUTIONAL AND POLITICAL-ECONOMIC PECULIARITIES OF MODERN UKRAINE: POLICY IMPLICATIONS IN TIME OF WAR

Abstract

Building on the conceptual frameworks of “patronal democracy” (Magyar & Madlovics, 2020) and “limited access orders” (North, Wallis, & Weingast, 2009), this paper analyzes Ukraine’s political-economic system as an archetype of informal elite coordination sustained through legal impracticability and discretionary enforcement. Incorporating Rogov’s notion of “soft legal constraint,” Volkov’s historical account of patrimonial governance, and Hale's concept of a Nash equilibrium of non-compliance with the law, it traces how inherited institutional pathologies have shaped a persistent “bad equilibrium” in Ukraine. Rather than treating corruption as a deviation from good governance, the paper shows how it functions as a systemic mechanism of elite control, bolstered by kompromat-based patronalism and rent-seeking. The paper’s core contribution lies in its analytical synthesis and policy reorientation: it conceptualizes why many externally driven reforms fail—being selectively absorbed into patronal structures—and articulates a context-sensitive strategy for de-patronalisation, drawing lessons from the experience of Georgian reforms between 2004 and 2012. This includes legal streamlining, dismantling discretionary authority, amnesty for legacy offenses, and targeted public enlightenment. Unlike other post-Soviet states, Ukraine’s transition toward an Open Access Order is facilitated by its decentralized institutional legacy and strong civil society, reinforced over the last decade by an existential need to align with Western norms amid war. These factors justify an accelerated and adaptive approach to de-patronalisation as a prerequisite for effective and sustainable post-war recovery, democratic resilience, and long-term integration into the EU and NATO. The paper also highlights underexplored risks such as re-oligarchisation through reconstruction and the unintended reinforcement of patronalism through ill-suited EU regulatory harmonization. It concludes that robust institutional reform must be designed with a deeper understanding of Ukraine’s informal governance logic to ensure that recovery efforts do not entrench the very system they aim to dismantle.