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Public administration reform in Ukraine: state-building on the march

Most reforms are painful by nature. How could Ukraine speed up the process in order to leave the country in a better shape before the crucial elections next year?

August 22, 2018 - Valerii Pekar - Blogs and podcasts

Independence Square, Kyiv Photo: EvaMospan, pixabay.com (cc)

Ukraine: The European frontier – a blog curated by Valerii Pekar.

Francis Fukuyama in his book ”State-Building: Governance and World Order in the 21st Century” emphasised, that the primary goal of reforms in developing countries is the strengthening of state institutions. In Ukraine this is twice true: this country had its own state too long ago, enjoyed its brief independence between two world wars (less than three years of armed confrontation on several fronts), but inherited weak and ineffective state institutions from a totalitarian Soviet Union.

The so called “government of Soviet Ukraine” was never a center of decision making, which was always in Moscow, an imperial capital. Economists know that communists broke off technological chains throughout many then-Soviet republics and placed them in different parts of the empire, considering enormous logistics costs as a price of preventing their economic independence. Even fewer people know that they also broke off decision making chains to prevent creation of capable local institutions.

Institution building is a wide ranging topic, so in this article I shall concentrate on the government only. For more than two decades the Ukrainian government was functioning under the influence of a post-colonial heritage Soviet system, which focused on managing assets unnecessarily owned by the state (Ukraine has 100 times more state-owned enterprises than the average European country), coercive inspection and control, and administrative services delivered at convenience of the state bodies and not the citizens. All these also nourish extreme corruption.

Western style policy making through problem analysis, wide stakeholder consultations, impact assessment and minimising the administrative burden on citizens, businesses and government was a rare practice. Most policy making took place through adopting legislation. Oftentimes the Ukrainian government just copied Russian solutions, even if obviously unsuccessful. As a result, 95 per cent of regulations artificially regulate “nothing”, according to the Better Regulation Delivery Office. Also, legislative acts are often written by civil activists. Ministries and other state bodies usually just chase papers and cannot answer the key question “who will cry if you die?”. In such an environment, well intended reform efforts sink because of inefficient policy processes and poor execution.

Looking backwards, we can see that the common European principles of public administration – separation of politics and civil service, transparent legal framework, alignment of policy priorities with financial constraints, clear definition of functions of institutions, transparent accountability, citizen oriented public services and e-government, were unattainable for decades in Ukraine. In 2018, the OECD/SIGMA program made its first thorough assessment of Ukrainian public administration, outlining these and other shortcomings, against the commonly agreed European principles of public administration. This assessment now stands as a baseline for further public administration reforms.

In order to make all the necessary sectoral reforms, we need people capable to do this at the level of government. That is why public administration reform in Ukraine is a key priority for the EU and the local civil society, and now also for the government. The major goal is to free ministries from obsolete, redundant and overlapping functions and focus them on priority tasks — analysis, development and implementation of relevant public policies. This transition would not be immediate, as long as it is connected with privatisation, the administrative services reform and the inspection reform.

What has been done up until now? The law on civil service was adopted, this created a legal basis for the reform and introduced depolitisation of the civil service. Now the reorganisation is already in progress in 10 ministries. It is made up of three major changes concerning – people, structures and processes. New structures (called directorates) are being created for policy analysis and development; new people are coming through open contests (higher salary and guaranteed interesting employment usually means increased competition and better standards by people with new values). Already more than 350 new people (real agents of change) work in some 60 directorates, additionally almost 500 winners of competitions wait for appointment. Recruitment procedures are regularly updated basing on practical experience. A massive training program was launched.

Obsolete functions will gradually be transferred, cancelled or outsourced, by this way corruption opportunities will be eliminated. The management processes also are a subject of change: impact assessment, policy evaluation, consultations with stakeholders and “evaluate first” principle are being set as a key rules. Clear responsibilities and key performance indicators are being introduced to gradually replace micro-management (first appropriate changes to the Government Rules were already adopted). Government policy planning will be evidence-based and aligned with budgeting process. The government activity should be based on a medium-term plan containing the key development projects. New government decisions should only be made on the basis of an analysis of the effectiveness of the previous ones, and key performance indicators should be monitored continuously. The process of policy development should be clearly standardised.

Last but not least, ministries will be transformed into compact teams of higher-payed motivated professionals who deal only with the main task, i.e. solving the country’s development problems. The government processes will be greatly simplified, standardised and algorithmic. This means a significant increase in the speed of passing draft decisions, reducing the load on key people, eliminating bureaucracy, duplication, and voluntarism. The government should become an attractive place to work for decent and professional people, and an understandable and responsible partner for foreign governments.

It is important that the change will be visible for the society, as all citizens want to reduce bureaucracy and spending on the state apparatus, improving the quality of public services, professionalism and responsibility.

The described ideal is indeed still far away in part because of the enormous work that remains to be done, but also because of resistance generated by selfish interests or the fear of change, as with any cultural transformation. But this process has been started. The key issues will be to make sure the changes are irreversible and to keep the pace.

There is now a certain critical phase, as the coming year brings presidential and parliamentary elections. Thus, we need to concentrate on key issues: finalising reorganisation at the 10 pilot ministries, finalising the introduction of impact assessment and other process changes, as well as use the last year of the parliament to adopt legislative changes. To make a reform, as Francis Fukuyama uses to say, we need to create a wide coalition. This is exactly what the reform task force is doing. The practical experience of Ukrainian reforms proves: when a reform becomes “fashionable”, it will be successful.

Valerii Pekar is a co-founder of the Nova Kraina Civic Platform, a lecturer at the Kyiv-Mohyla Business School and a former member of the National Reform Council. He curates a blog titled Ukraine: The European frontier.

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