REDUCING MARKET DISTORTIONS FOR A MORE PROSPEROUS UKRAINE 3 in Ukraine, the government’s economic interventions have a major in昀氀uence on market outcomes. The propensity of SOEs and politically connected 昀椀rms in concentrated markets to lobby for regulatory protections and other policy-based advantages underscores the importance of mainstreaming the principle of competitive neutrality in government interventions. Even rel- atively minor distortions or barriers imposed in speci昀椀c sectors can substantially impact market dynamics, especially in markets that are not naturally conducive to contestation. To address these challenges, this report proposes measures to improve Ukraine’s regulatory framework, institutional arrangements, and enforcement mechanisms within the context of a national competition policy. Although Ukraine’s economywide and sectoral product-market regulations are relatively progressive in principle, their application must be strength- ened to ensure a level playing 昀椀eld supported by competitively neutral public policies. At present, multiple sectoral regulators and market institutions are not fully independent and cannot e昀昀ectively execute their mandates. In addition, a high degree of vertical integration in network industries and key productivity-enabling sectors (e.g., electricity and gas) can increase risks of market foreclosure, and in these cases the unbundling of monopolies or dominant players could yield substantial e昀케- ciency gains that enhance the competitiveness of downstream sectors. Therefore, a holistic competi- tion policy must go beyond antitrust enforcement to: (i) ensure a competitively neutral environment that minimizes the policy-based advantages of SOEs and politically connected 昀椀rms; (ii) improve the predictability, consistency, and transparency of the regulatory framework, both in principle and in application; and (iii) support the development of robust, independent market institutions.