Regulation and private property: the cautionary tale of Ukraine

Abstract

This article makes the case for regulation as a necessary part of any system of private property. Rather than asserting that case, it presents Ukraine’s history since independence from the former Soviet Union as an example of the consequences that can follow from the failure to consider the need for and operation of regulation as part of the adoption of private property. The article is divided into five parts. Following the Introduction in Part I, Part II provides a brief background account of the liberal concept of private property and the nature of an organic regulatory framework that tends to surround it in most contemporary Western liberal legal systems. Part III outlines the substantive form which the implementation of private property took in post-independence Ukraine, using property in land as the paradigmatic example. Part IV examines the negative consequences that have resulted from the attempt to implement a system of private property with little, if any, effective regulatory framework. The difficulties that post-independence Ukraine has encountered demonstrate, quite starkly, what can befall a transitional capitalist economy when it attempts to implement a system of private property without giving full attention to the regulatory context within which such a system typically operates. The final part offers brief concluding reflections on how the issue of regulation can be addressed in emerging market economies.