Dr David Dalton: Course syllabus proposal: Political economy of the Ukrainian oligarchy

The course I propose provides an overview of the modern Ukrainian oligarchy as the country’s dominant post-communist political economy institution. Starting from an outline of how the institution was formed from a developing relation between political elites and regional business networks in the 1990s, students will examine what the oligarchy is, how it operates, and how it has managed to reproduce itself across crises, despite the country’s perennially poor economic performance. The course is comprised of 3 lectures and seminars which introduce political economy and a subject, focusing on a comparison between neo-classical and institutional economics. It is followed by 7 lectures/ seminars on key empirical themes concerning the modern Ukrainian oligarchy, based on a book-length monograph of my PhD dissertation, The Ukrainian Oligarchy After the Euromaidan, as well as key readings on the political economy of modern Ukraine on which it draws. It will, however, include more of an externally comparative element—in particular, of Ukraine’s oliharkhiya compared with Russia’s sistema (Ledeneva, 2013).

The subject matter of the course crosses the fields of political science, political sociology, economic sociology and economics. A short theoretical element early on equips students with the concepts, definitions and frameworks they need to navigate successfully the academic literature on the Ukrainian oligarchy. Since the course begins with a discussion of neo-classical economics as a “baseline” theory—honing in, for example, on the notion of economic rents, as a way of explaining the concept of “rent-seeking”—only a basic knowledge of economics is required. It is suitable, therefore, for undergraduates majoring in politics or the social sciences who have already completed their first year.

Students will be expected to produce a couple of short essays and a seminar presentation, as follows: i) An optional essay (1,000 words), half way through the term, comparing and assessing two of the political economy schools or authors covered. This would offer students an opportunity to receive constructive feedback on their written work, aimed at reinforcing good academic habits ahead of an assessed essay at the end of term. ii) A seminar presentation to the group, related to a theme from the lectures, but chosen by the student and based on their reading. iii) An assessed essay (2,000-2,500 words) answering one question from a shortlist composed by me, each on an aspect of the political economy of modern Ukraine outlined in the lectures. iv) Reading for the course would be one or two recommended journal articles or book chapters per week, linked to lecture themes. More reading would be required to complete the short essays and seminar presentations well. Organisation of the teaching material could be structured as set out below.

Part I: Introduction to political economy and approaches to Ukraine’s political economy regime.

1) Course introduction and organisation. Political economy as a social science approach to economics; as the interrelation of the political and economic realms of social life; distinctions between schools; outline of key issues in the political economy of Ukraine. Key “outline” reading for seminar discussion: Dalton, D. (2021). How did the Ukrainian oligarchy keep going after the Euromaidan? Vox Ukraine. Available at: https://bit.ly/3za9oWl.

2) Neo-classical vs institutional economics: similarities and differences: i) neo-classical approach as the base of comparison: key concepts and innovations vs classical economics; Hayek: price signals and economic rents; ii) “old” American institutionalism; Veblen: criticisms of “hedonistic calculus”; history and context, habit and evolution; iii) “new” institutionalism: a mix of i & ii; Acemoglu & Robinson/ the “Why Nations Fail” argument: political rules condition economic rules. iv) How will these approaches aid the study of today’s Ukraine?

3) Understanding Ukraine’s “political economy regime”: i) Winters’ theory of oligarchy as wealth defence combined with Acemoglu’s institutional theory of prosperity; ii) Hellman, partial reform equilibrium vs “development of underdevelopment”; iii) Hale’s “patronalism” and network pyramids, hybridity; iv) Magyar & Madlovics, “stubborn structures”, and the anatomy of post-communism.

Part II. Aspects of the political economy of contemporary Ukraine, brought out by comparison with Russia

4) The origins of Ukraine’s oligarchic political economy model and how it works: Soviet inheritance and emergence in the 1990s; generative schemes and repertoire of political and economic practices. What is an oligarch in Ukraine and what is the oligarchy? Key issues and concepts: power, power resources, wealth, economic rents, institutions, structures, embeddedness.

5) Overview: state positional power + network economic power: The institutional evolution of the Ukrainian oligarchy from Kuchma to Zelenskyi. What are business-political networks?

6) How has the Ukrainian oligarchy been able to reproduce itself institutionally across crises? Answer: By way of its habitual, extractive political and economic practices. The “currency flow” model of wealth and power in Ukraine. Similarities and differences of Ukraine’s “oliharkhiya” with Ledeneva’s account of Russia’s “sistema”.

7) Economic inequality and political power in contemporary Ukraine and Russia in international comparison. Wealth as oligarchs’ characteristic “resource power”. How rich are the very rich in Ukraine? Has the political power of oligarchs declined?

8) The intertwining of formal and informal politics. Ways of converting wealth into political power: the case of the Verkhovna Rada (parliament). Other modes of oligarchs’ political influence: election funding, media ownership. Other state institutions essential to the oligarchic system: presidential administration, judiciary, Naftogaz.

9) The conversion of political influence back into wealth: the role of the energy sector in the formation and recreation of the Ukrainian oligarchy; relation of Ukrainian and Russian energy elites; typology of rent-extraction schemes in the Ukrainian energy sector. Other economic schemes and sectors of the Ukrainian oligarchy. 10) Economic impact of institutional reproduction: the development of underdevelopment vs partial reform equilibrium. i) Elite politics as a fetter on economic development: negative feedback loop of low state capacity > low investment. ii) Ukraine’s poor economic record: GDP per head, FDI, HDI. iii) Ways of escape: prospects for political & economic development given Ukraine’s starting point: governance reform and “de-oligarchisation” under Yatsenyuk and Zelenskyi. iv) Economic and political transformation of Ukraine following the Russian invasion of February 2022 and its implication for post-war reform of Ukraine's governance institutions.

Indicative course readings

i) Politics, political economy and political sociology approaches

·       Acemoglu, D. & Robinson, J. A. (2012). Why Nations Fail: The Origins of Power, Prosperity, and Poverty. London, Profile Books.

·       Aristotle (1996). The Politics and The Constitution of Athens. Cambridge Texts in the History of Political Thought. Revised student edition. Everson, S. (ed.) Cambridge, Cambridge University Press.

·       Hayek, F. A. (1948). The Meaning of Competition. Excerpt from "Individualism and Economic Order". Mises Institute. Available: https://bit.ly/3obdsE6.

·       Hale, H. E. (2015). Patronal Politics: Eurasian Regime Dynamics in Comparative Perspective. Cambridge, Cambridge University Press.

·       Hellman, J. S. (1998). Winners Take All: The Politics of Partial Reform in Postcommunist Transitions. World Politics, 50, 2, pp. 203-234. Available: https://muse.jhu.edu/article/36396.

·       Magyar, B. & Madlovics, B. (2020). The Anatomy of Post-Communist Regimes: A Conceptual Framework. Central European University Press.

·       Veblen, T. (1909). The Limitations of Marginal Utility. The Journal of political economy, 17, 9, 620-636.

·       Winters, J. A. (2011). Oligarchy. Cambridge, Cambridge University Press.

ii) The political economy of the contemporary Ukrainian oligarchy

·       Andrusiv, V., Ustenko, O., Romanenko, Y. & Tyshkevich, I. (2018). The Future of the Ukrainian Oligarchs. Ukrainian Institute for the Future. Kyiv, Available: https://bit.ly/2UccElO [Accessed June 24th 2020].

·       Åslund, A. (2009). How Ukraine Became a Market Economy and Democracy. Washington, DC, Peterson Institute for International Economics.

·       Avioutskii, V. (2010). The Consolidation of Ukrainian Business Clans. Revue internationale d'intelligence économique [Online], Volume 2. Available: https://bit.ly/3ryXseL [Accessed July 1st 2021].

·       Balmaceda, M. M. (2013). The Politics of Energy Dependency: Ukraine, Belarus, and Lithuania between Domestic Oligarchs and Russian Pressure, 1992-2012. Toronto, University of Toronto Press.

·       Bojcun, M. (2020). Towards a Political Economy of Ukraine, Selected Essays 1990–2015. Ukrainian Voices. Umland, A. (ed.) Stuttgart, ibidem Press.

·       Dabrowski, M. (2017b). Ukraine’s oligarchs are bad for democracy and economic reform. Available: https://bit.ly/3CCL0j2 [Accessed June 25th 2020].

·       D'Anieri, P. (2007). Understanding Ukrainian Politics: Power, Politics, and Institutional Design: Power, Politics, and Institutional Design (1st ed.). New York. Routledge.

·       Frye, T. (2017). Property Rights and Property Wrongs: How Power, Institutions, and Norms Shape Economic Conflict in Russia. Cambridge. Cambridge University Press.

·       Guriev, S. (2021). Political Economy of Transition Reforms. Chapter 13 in Douarin, E., & Havrylyshyn, O. (eds.): The Palgrave Handbook of Comparative Economics. Palgrave Macmillan.

·       Havrylyshyn, O. (2017). The Political Economy of Independent Ukraine: Slow Starts, False Starts, and a Last Chance? Studies in Economic Transition. London, Palgrave Macmillan UK.

·       Konończuk, W. (2016). Keystone of the system. Old and new oligarchs in Ukraine. Ośrodek Studiów Wschodnich im. Marka Karpia. Warszaw, Available: https://bit.ly/3k2DaYL [Accessed February 16th 2019].

·       Ledeneva, A. (2013). Can Russia Modernise? Sistema, Power Networks and Informal Governance. Cambridge. Cambridge University Press.

·       Markus, S. & Charnysh, V. (2017). The Flexible Few: Oligarchs and Wealth Defense in Developing Democracies. Comparative Political Studies, 50, 12, pp. 1,632-1,665 Available: https://bit.ly/2Wcuoye.

·       Matsiyevsky, Y. (2018). Revolution without regime change: The evidence from the post-Euromaidan Ukraine. Communist and Post-Communist Studies, 51, 4, pp. 349-359.

·       Minakov, M. (2019). Republic of Clans: The Evolution of the Ukrainian Political System. In: Magyar, B. (ed.) Stubborn Structures: Reconceptualizing Post-Communist Regimes. Central European University Press. pp. 217-245.

·       Pleines, H. (2016a). Oligarchs and Politics in Ukraine. Demokratizatsiya, 24, 1, pp. 105-127.

·       Puglisi, R. (2003). The rise of the Ukrainian oligarchs. Democratization, 10, 3, 99-123.

·       Whitmore, S. (2004). State-building in Ukraine: The Ukrainian Parliament, 1990-2003. 1st ed. London, RoutledgeCurzon.

·       Wilson, A. (2016). Survival of the richest: How oligarchs block reform in Ukraine. Policy brief ECFR/160 [Online]. London, UK, European Council on Foreign Relations (ECFR). 

·       Zimmer, K. (2006). Formal Institutions and Informal Politics in Ukraine. In: Meyer, G. (ed.) Formal Institutions and Informal politics in Central and Eastern Europe: Hungary, Poland, Russia and Ukraine. Oplanden & Farmington Hills.: Barbara Budrich Publishers.

·       Yurchenko, Y. (2018). Ukraine and the Empire of Capital: From Marketisation to Armed Conflict. London: Pluto Press.