I talk with Jaroslav Romanchuk about the Russian invasion of Ukraine, the causes of corruption, why Ukraine is going to need limited government, and the bad economic advice Ukraine keeps getting from the West.
Watch it here.
This is a follow-up on our previous conversation just prior to the Russian invasion, but this time we focus more on the prospective question of how Ukraine’s wartime economy will work and how it will rebuild after the war.
The issue I think is most important for people outside Ukraine to grasp is the under-appreciated connection between Big Government and corruption—the way that corruption is fueled by money and economic activity having to move through state institutions, especially state institutions warped by the Soviet legacy and decades of Russian influence. This led to a discussion of the problem of “state capacity,” i.e., the ability of a government to effectively implement its policies. Small-government types like us tend not to talk about “state capacity” because we don’t want the state to do very much. But this is another reason why Western aid and advice often goes wrong, because it assumes “state capacity”—a functioning and honest bureaucracy—that doesn’t exist.
For more coverage on Ukraine and its future, see my conversation last year with Ukrainian philosopher Volodymyr Yermolenko.
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Private Initiative and State Capacity