The Politics of Taxation and State Building in Ukraine, 882-2004

This dissertation utilizes an historical-institutionalist framework to expose deep historical continuities and critical junctures in the development of the Ukrainian state through the lens of fiscal policy. The study first considers the origins of stateness in Ukraine during the country's pre-Communist period to show that new attempts to build a modern fiscal system would not only have to contend with the Communist past, but also the pre-modern legacies of foreign intervention, relatively weak development of autonomous political institutions, and regional resistance to central control and the deep skepticism about the degree to which national authorities can attain autonomy from other great powers that went with it. Second, the dissertation investigates the historical role fiscal politics played in the violent imposition of communist rule on Ukrainian society and details the development of key structural (e.g. capital formation) and institutional (e.g. budgeting system and tax structure) features that later shaped the fiscal policy positions of Ukrainian state builders in the post-Soviet period. Third, the analysis explains the relative stability of Ukraine's fiscal system during the transitional period spanning between 1991 and 1994 as a consequence of the lack of turnover from the Communist period among Ukraine's bureaucratic and parliamentary elite; the arguments of economic nationalism that united the highly divided Ukrainian society in support of state independence did not equate economic autonomy with economic liberalization. Lastly, the dissertation explains the development of Ukraine's post-Soviet fiscal system during the 10-year tenure of President Leonid Kuchma, which spanned the years 1994 to 2004. The analysis shows that the multiple veto gates generated by Ukraine's electoral system and constitutional system of separation and balance of powers--thereby leading to the emergence of numerous smaller political parties unable to form stable parliamentary majorities, weak party discipline in the policy-making process, and the strong pull of special interests and narrow geographic constituencies--restricted the state executive's ability to centralize fiscal policy making in ways that promote more coherent fiscal policy.

The dissertation's findings help refine our theoretical understanding of how key structural legacies and institutional continuities carried over from former regimes can dampen the effect of critical junctures (e.g. constitution-building process) or external pressures (e.g. conditionality) on state-building processes. The dissertation's conclusions are supported by field research conducted in Ukraine uninterrupted between August 2002 and October 2004, during which time I conducted 30 interviews with Ukrainian governmental officials, members of foreign governmental agencies and multilateral institutions, and specialists with non-governmental organizations working on matters related to democratization and economic reform in Ukraine.