Abstract
This article analyses the role played by the Ukrainian state in the everyday business of average Ukrainian firms in 2007–2011. Relying on the empirical findings of a five-year case study conducted in Eastern Ukraine, this article confirms the image of the Ukrainian state as a “grabbing hand” or bespredel — an unrestricted and violent power. The contractual relations of the researched firms and the state actors were fraught with illegal practices such as kickbacks from suppliers and the need to systematically violate the law on state procurement; pervasive Soviet-style personal relations; the risk of experiencing violent administrative pressure including criminal prosecution; and deficiencies in the enforcement of contracts. Notwithstanding these risks, the researched businesses revealed no absolute moral prohibition against joining the “grabbing hand” of the state to exploit public resources and advance their own private gains.
Highlights
Corruption, state extortions and undue pressure on businesses under the Yanukovych regime was one of the driving forces behind the Euromaidan Revolution in Ukraine in January 2014
This article analyses the role played by the Ukrainian state in the everyday business of average Ukrainian firms in 2007–2011
Relying on the empirical findings of a five-year case study conducted in Eastern Ukraine, this article confirms the image of the Ukrainian state as a “grabbing hand” or bespredel — an unrestricted and violent power
Summary
Corruption, state extortions and undue pressure on businesses under the Yanukovych regime was one of the driving forces behind the Euromaidan Revolution in Ukraine in January 2014. Small and medium businesses, despite their dislike of the “grabbing hand,” were ready to cooperate with it and exploit state resources to their advantage To advance this conclusion, this article analyses the role played by the Ukrainian state in the everyday business of average Ukrainian firms in 2007–2009 under the Yushchenko government and in 2010–2011 under the Yanukovych government. The main part of the article presents the empirical findings of a case study and analyzes how Ukrainian businesses perceive the state and how they pursue contracting with state parties It demonstrates how defective contract enforcement, illegal practices during public tenders, kickbacks from suppliers, personal relations between trading partners and state administrative resources are used in contractual relations involving the state agencies, state-owned enterprises and quasi-state private firms. This article concludes with a summary of the findings and their broader implications for postMaidan Ukrainian business and society
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