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Why the reforms in Ukraine are so slow?

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

July 19, 2017 - Valerii Pekar - Articles and Commentary

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This is a question Western diplomats, policy makers and Ukrainian citizens often ask. The fact that Ukraine has undeniable successes as well as terrible failures in reform is clear. Successes in launching anticorruption agencies and patrol police, making public procurement transparent, improving economic regulations (especially when it comes to energy markets), opening public registries, decentralisation, among others, have fetched out the failures in pension, land and tax reforms, privatisation, etc. While some experts stress that over the last three and a half years Ukraine implemented more changes than any other country in the region at the beginning of their post-Communist transformation processes, others emphasise that the pace of changes is below expectations of both Ukrainians and our Western partners.

At first glance, the main reason for the slow pace of reforms is the lack of political will. Ukrainians typically blame political leaders that they do not push for reforms as they represent the old elites, which are not interested in changing the status quo. But during his last trip to Kyiv, the famous political scientist Francis Fukuyama told Ukrainians that they cannot keep on blaming “the lack of political will”, but instead they should rather share the blame for the lack of progress and say “we didn’t manage to create a strong coalition to support reforms.”

Moreover, observers also mention war, bureaucratic resistance and procedural complexity as the reasons for slow reforms, because legislation amendment procedures were designed to maintain stability, not to facilitate change. But all these reasons are not enough to explain the current state of affairs.

If we delve deeper, we will see that it is the lack of institutional capacity that slows down reforms even when political leaders push them.

First, corruption and vested interests in the Ukrainian parliament are one of the main problems, as MPs representing the old elite often try to save closed (extractive, to use the term coined by economist Daron Acemoğlu, a co-author of Why Nations Fail) political and economic institutions and prevent the establishing of open, inclusive ones. Observers also point out that there is no consequent reform party that would push for changes, and the few reformers in the parliament (the so-called Euro-optimists) are scattered across different political forces and factions, losing their ability to influence the agenda.

Reformers sometimes lose opportunities to implement changes, looking for ideal solutions and thus trading off the pace of reforms for quality. Moreover, not only there are numerous MPs that oppose changes, there are also the indifferent ones, who rarely attend parliamentary sessions. The parliamentary coalition exists on paper only and people often joke that the real coalition in Ukraine is not the one between political parties, but between the civil society, the EU Delegation and the US Embassy. Therefore an electoral reform, which would bring new people into the parliament, is key to all further changes.

The second problem is the government’s low institutional capacity. After the parliamentary elections in 2014, NGO leaders called for a professional government, as a political government never introduces reforms. They recalled the famous quote of the American author J.F. Clarke that a politician thinks of the next election, a statesman – of the next generation. And yet, most of the successful reformers have already left the government, and the few remaining concentrate on defending past achievements rather than moving on. The government is good at planning, but poor at implementation because of low project culture and — most importantly — the lack of execution, as sometimes there are no people to implement plans. Moreover, communication with the parliament remains poor, therefore MPs have little understanding of the government’s proposals. Ministries and government agencies are made of old people, old structures and old processes. That is why the public administration reform is also crucial, as it could help to change all the three institutional components.

But looking even deeper, we will see not only the lack of supply, but also the lack of demand for reforms. In fact, the majority of the population do not want changes: they request higher salaries, less poverty, more justice, less corruption, but are not ready to change their own habits. Paternalism and the lack of critical thinking of more than half of the population means demand for stability, order and traditional patron-client relations, not for dramatic changes in social practices, a new social deal, or accountability. Indeed, the lack of trust caused by failed promises is also important (negative balance of trust in the government is -63.3 per cent, in the parliament -76.8 per cent according to the Kyiv International Institute of Sociology), as well as poor communication of successes. Communication is difficult because the main media belong to the old elite, while the public broadcasting company has not yet started operating, and only a small portion of the population uses the internet. Poor communication means poor understanding of reforms by the people and thus no demand for change.

We can see that the reforms which have been successful are a result of persistent efforts of a few reformers in the parliament and the government, supported by the pressure from the civil society and the West, rather than systemic work of political institutions based on strong people’s demand. The active minority sets the direction for changes, while the passive majority sets the pace.

The solution is to concentrate on the development of both institutional capacity and civil demand for reforms. Public administration reform in its present strategic vision approved by the EU will bring new people to new structures with new processes. At the same time electoral reform – currently frozen – will open the door to the parliament for new people. This is the way to build the capacity of institutions.

In addition, civil education (including promotion of best practices) and the deployment of the public broadcasting company will lead to a growing demand. This is the way to create stronger civil coalitions to support reforms.

Finally, what is needed is a judiciary reform which ought to build the trust necessary to make changes. That is why pro-reform groups in Ukraine are closely watching the reloading of the Supreme Court and demanding the creation of anticorruption courts approved by the EU. At the same time, we need more economic freedom to stimulate economic growth, which will counterbalance dissatisfaction (currently, 73 per cent say that their living conditions have deteriorated).

These are the key issues for Ukrainian reformers, no matter if they work in the parliament, the government or NGOs. These are also important points for the West if it is to adequately support Ukrainian reforms.

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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