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Why billionaires make bad presidents

The election of Petro Poroshenko as Ukraine's new president is filled with hope—hope that he will ease the battle with Russia and form a bridge with the West. Hope that he will improve Ukraine's crumbling economy. Hope that he can keep his country from breaking into a civil war.

But the greatest hope is that Poroshenko will become the world's first truly effective, democratic billionaire president. The odds aren't good.

One reason is Ukraine itself. The East European oligarchy doesn't exactly lend itself to enlightened democracy and free markets. Its past presidents, from Viktor Yanukovych to Viktor Yushchenko to Leonid Kuchma, have often shown more interest in building sprawling dachas and silencing their opposition than building sustainable economies and civil society.

Read MoreTop priority is peace, says Ukraine's Poroshenko

Poroshenko, known as the "Chocolate King," owns Kiev's Roshen Sweets, which makes chocolate and other confectionery. Voters are hoping that his newfound power will be used to stitch together peace with Russia and prosperity for Ukraine—not to enrich himself further. And therein lies the problem for most billionaire presidents.

Ukraine's President-elect Petro Poroshenko, speaks to the media during a press conference on May 26, 2014 in Kiev.
Getty Images
Ukraine's President-elect Petro Poroshenko, speaks to the media during a press conference on May 26, 2014 in Kiev.

"The problem for Poroshenko is definitely that he is a strong businessman himself," Olexiy Haran, a professor of comparative politics at the National University of Kyiv-Mohyla Academy told the Washington Post. "The problem would be to separate business from politics."

That separation has proven difficult in other countries.

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Italy's Silvio Berlusconi, the billionaire media mogul who served as prime minister three times between 1994 and 2011, is currently serving a year of community service for tax fraud. He's also fighting charges of having sex with an underage prostitute.

While Berlusconi and his supporters say he's simply a victim of a left-wing attack, the Italian economy and political system both remain highly dysfunctional after his long reign.

Then there's Thaksin Shinawatra, the billionaire media mogul who was prime minister of Thailand. Shinawatra now lives in exile to avoid corruption charges in Thailand. His sister, Yingluck Shinawatra, was recently ousted as prime minister. As with Berlusconi, supporters of Thaksin (known as "red shirts") say he's been unfairly demonized by his political opponents.

But a Thai court ruled that $1.4 billion of Thaksin's fortune was gained illegally while he was prime minister. And the fact that Thailand is now being ruled by a military coup, with its economy faltering, suggests that Thaksin did little to improve the foundations of democracy or the economy in the country.

Finally, Vladimir Putin could also be included on lists of billionaire presidents. Putin, of course, argues that he's not rich—once saying that he's a "galley slave" working for the Russian people for little wage. But media reports put his net worth in the billions. And given Russia's economic troubles, its human rights abuses, lack of real opposition and recent penchant for invading its neighbors, Putin is the poster boy for autocratic billionaire leaders.

Read MoreRussian oligarch faces $4.5 billion divorce

So is there a cause-and-effect between billionaire wealth and bad leadership? Not necessarily. The billionaire leaders who have come to power so far are all in countries with non-traditional forms of democracy prone to corruption and backroom dealmaking. They are precisely the kind of countries where wealth can more easily buy office. And they are precisely the kind of countries that can't be fixed by a single leader in one or two terms.

Still, billionaires do tend to have some character traits that don't translate well to being democratic leaders. Their success tends to come from starting companies, breaking rules, ignoring critics and controlling virtually every aspect of their lives and companies. Once they've made their fortune, billionaires are used to getting what they want.

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And it's not easy for billionaires—economic animals by nature—to suddenly set aside their personal interests.

Nearly three-fourths of billionaire entrepreneurs surveyed recently by the Centre for Policy Studies cited economic profits and wealth as their motivating factors. Being a political leader, by contrast, is a more messy proposition, involving compromise, cooperation and masses of public interests.

We may yet see a great billionaire president, but it's unlikely that Poroshenko will be the first.

—By CNBC's Robert Frank.

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