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This is a study of state building in Ukraine. The author argues that a market economy and democracy cannot exist in the absence of a state and institutions. Ukraine was a quasi-state within the former USSR when it became independent in January 1992, and thus it inherited only the rudiments of what is traditionally considered a modern state. The creation of a state with viable institutions was prioritized by the executive and legislature who understood that a democracy, civil society, the rule of law and a market economy could not be created in the absence of a state. This study surveys institution and state building in Ukraine by placing it within a comparative and theoretical perspective, challenging many of the current misconceptions commonly held about Ukraine and other post-Soviet countries in the throes of their transformation projects.