05/30/2014 08:14 am ET Updated Jul 30, 2014

Can a Billionaire Save Ukraine?

Outsiders have greeted the election of Petro Poroshenko as Ukraine's new president with tremendous hope. The billionaire chocolatier has vowed strong steps to bring peace to his troubled country and leadership that bridges differences with Ukrainian separatists and his Russian neighbors. Optimistic observers predict that he is too rich to be bought and therefore likely to overcome the bad government performance and rampant citizen cynicism that has plagued that country.

Yet the experiences of other nations with billionaire executives do not bode well for Ukraine. Billionaires have run for elective office in 13 nations around the world and in most cases, the tycoon has won. But many of these campaign winners have overseen administrations beset by corruption, poor performance, and blatant conflicts of interest.

For example, Thaksin Shinawatra became prime minister in 2001 after his Thai Rak Thai party won a major electoral victory. The billionaire politician built his political career by appealing to the country's poor, especially those in rural areas who believed that they had been ignored by the national elite.

He served for five years before being removed from power when his opponents accused him of corruption and tax evasion and using his position to enrich himself and his family. Critics pointed to favorable tax breaks given to his Shin Satellite firm and regulatory decisions that gave advantages to his Shin Corp airline company. He was found guilty in 2008 and forced to leave the country to avoid imprisonment.

He was replaced with his sister, Yingluck Shinawatra, as prime minister. But continuing objections to the political and economic influence of the family fueled an opposition movement that eventually drove her from office and led to a recent military coup. The volatility of political life under the wealthy Shinawatra family demonstrates the governance and policy challenges when national politics are dominated by billionaires.

In the former Soviet republic of Georgia, billionaire Bidzina "Boris" Ivanishvili has a net worth equal to one-third of his country's $15.8 billion gross domestic product, according to Forbes magazine. He came into politics following major policy disagreements with Georgian president Mikheil Saakashvili. Saakashvili, who was elected in 2008 on an anticorruption platform, pursued pro-Western and pro-NATO policies and sought membership in NATO and the European Union. Russian leaders were upset with those moves, and after talks failed, they sent military troops into Georgia in 2008 to support separatists in the region of South Ossetia.

Following alleged legal violations by Ivanishvili, the Georgian formed a new political organization, the Georgian Dream party, to fight Saakashvili. The next year, members of Ivanishvili's party won numerous seats in the parliament and Ivanishvili was named prime minister of Georgia. In the aftermath of his electoral triumph, Ivanishvili arrested the previous prime minister, brought his own people into government, and charged the previous regime with corruption and graft.

In 2013, Ivanishvili chose a little-known candidate, Giorgi Margvelashvili, to run for the presidency against a candidate representing the party of Saakashvili. Margvelashvili won overwhelmingly, with 67 percent of the vote. Following this victory, Ivanishvili left the prime minister's seat and chose his interior minister, Irakli Garibashvili to take his place. In an interview, Ivanishvili admitted that he planned to remain the power behind the throne. "I will control the government which I leave behind. I would prefer not to reveal the mechanism for now, the way in which I will act," he said.

An even more dramatic example of poor billionaire leadership comes from Silvio Berlusconi, perhaps the world's most prominent billionaire-turned-politician. He was elected to the Chamber of Deputies in 1994, and as the leader of Forza Italia, the parliamentary party that he founded, he was named prime minister. He served just one year as prime minister but returned to office again from 2001 to 2006 and from 2008 to 2011.

Last year, Berlusconi lost his prime ministership following personal scandals and an indictment on tax fraud charges. His flamboyant lifestyle also led to charges of having sex with young girls and not paying taxes on all of his income. Following conviction on the tax fraud charges in 2012, Berlusconi was stripped of his seat in parliament and lost the right to hold Italian elective office. The court sentenced him to four years in prison but later reduced the punishment to ten months of community service in a Catholic nursing home.

When billionaires gain public office, they almost always are criticized for using their abundant financial resources to win elections, and once they are in office, observers worry whether they are abusing their positions to further their own social and economic interests. Given the wide-ranging business interests of most politicians who are very wealthy, conflicts of interest are inevitable.

It is not likely that Poroshenko will be an exception to this rule. He has a chocolate factory in Russia and has had business dealings with many people in Europe, the Ukraine, and Russia. The biggest challenge facing him is the fusion of economic and political influence in Ukraine. That connection invariably creates political resentments and clear conflicts of interest. The large number of billionaire leaders around the world who have been accused of vote buying, influence peddling, or outright corruption suggests Poroshenko will not have an easy path to success.

Darrell West is Vice President of Governance Studies and author of the forthcoming Brookings Institution Press book, Billionaires: Reflections on the Upper Crust.