Sovereign Commitment and Property Rights: the Case of Ukraine’s Orange Revolution

Conventional wisdom in new institutional economics suggests that property rights become more secure following sovereign commitment. The article tests this axiom in the crucial case of the 2004 Orange Revolution in Ukraine. I show that despite the wide-ranging constraints imposed after the Revolution on the upper executive, the security of property rights declined. Theoretically, the article argues that the link between sovereign commitment and secure ownership hinges on vertical accountability in the state apparatus. While institutionalizing commitment by the presidency, the Revolution simultaneously exacerbated principal-agent dilemmas within the bureaucracy. Methodologically, the article contributes by triangulating available historical narratives and cross-national quantitative studies. Instead, the focus on one contemporary developing country and the use of qualitative process tracing dissects sovereign commitment and shows the mechanisms through which it can be subverted at lower administrative levels. Sixty-four semi-structured interviews with entrepreneurs and government officials from six Ukrainian regions, as well as analysis of the local media, provide the data.