Ukraine’s Own Goal

KYIV – Politics and sports are often an incendiary mix, as the controversy now swirling around the Euro 2012 football championship, to be co-hosted by Ukraine and Poland, demonstrates. German Chancellor Angela Merkel, European Commission President José Manuel Barroso, and other European Union leaders have said that they will boycott matches held in Ukraine, owing to the imprisonment of former Prime Minister Yulia Tymoshenko and other opposition figures.

Why, two decades after communism ended and Ukraine gained its independence, does the country remain mired in economic torpor and an authoritarian politics that has aroused such ire in Europe? When a country like Ukraine develops slowly and remains poor, it is not because of natural disaster or resource constraints. Bad policies pursued by bad governments are to blame.

Contrary to what many Western economists think, the worst economic breakdowns are not the result of free markets gone haywire, but of excessive concentration of political power. To insure against the worst human and economic catastrophes, limits to political power must be introduced and a system of checks and balances maintained.

Witness the divergence in long-run economic growth between the Euro 2012 co-hosts. Poland’s GDP has almost doubled over the last 20 years, while Ukraine is still barely maintaining the output level recorded during the last year of socialism. Generally speaking, Central and Eastern European countries have performed better economically than the ex-Soviet countries (with the exception of the Baltic states).