Understanding the conflict three years on.

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Ukraine’s wartime economy is defined by the massive mobilization of resources for the war effort, funded by tax revenue mobilization at home and large-scale inflows of external assistance from allies. Sometimes referred to as military Keynesianism, where spending on defense and the military industrial complex supports domestic economic demand, this model entails a growing importance of the state to the economy. For Ukraine, whose government once identified as economically “libertarian,” this is a significant political change. And this transformation comes at a time when Western states are also revising their economic doctrines away from the “small state, free market” dogmas of the neoliberal era. As markets left to their own devices will not deliver on political goals like addressing inequality, climate change, industrial development, technological innovation, or deliver outcomes consistent with national security, it is not just war pushing states to become fervently interventionist.

While this return of the interventionist state is long overdue, how to manage the relationship between state and capital is not straightforward and involves various threats to the broader public interest. These problems are posed particularly sharply for a country like Ukraine that has long had a problem of public institutions being captured by private interests.

Ukraine’s wartime economy is defined by the massive mobilization of resources for the war effort, funded by tax revenue mobilization at home and large-scale inflows of external assistance from allies. Sometimes referred to as military Keynesianism, where spending on defense and the military industrial complex supports domestic economic demand, this model entails a growing importance of the state to the economy. For Ukraine, whose government once identified as economically “libertarian,” this is a significant political change. And this transformation comes at a time when Western states are also revising their economic doctrines away from the “small state, free market” dogmas of the neoliberal era. As markets left to their own devices will not deliver on political goals like addressing inequality, climate change, industrial development, technological innovation, or deliver outcomes consistent with national security, it is not just war pushing states to become fervently interventionist.

While this return of the interventionist state is long overdue, how to manage the relationship between state and capital is not straightforward and involves various threats to the broader public interest. These problems are posed particularly sharply for a country like Ukraine that has long had a problem of public institutions being captured by private interests.

Now, in the face of a series of recent scandals, Ukraine’s government is coming under enormous scrutiny—and its present crisis provides a warning to the rest of the world.

Discussions at the annual

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