(Dis-)integrating Ukraine? Domestic oligarchs, Russia, the EU, and the politics of economic integration

How do the politics of economic integration pursued by the European Union (EU) and Russia in their shared neighborhood affect domestic change in these countries? Do the two external powers further economic integration with one or the other, and how do their strategies shape the survival of rent-seeking domestic elites? Examining the case of Ukraine’s car industry, the paper reveals a considerable degree of disengagement by both the EU and Russia. Both external actors offer domestic elites surprisingly few opportunities for economic integration but rather pursue a “policy” of de facto exclusiveness that caters to the domestic interests of the EU and Russia. So far, the EU has strongly promoted trade liberalization to facilitate market access for European car producers but has not created opportunities for foreign-led restructuring of Ukraine’s car industry, thereby leaving the sector without a chance to benefit from liberalization. Russia, in turn, compromised existing trade linkages with Ukraine to protec...