Bohdan Harasymiw. CORRUPTION – UKRAINE’S ENDURING AFFLICTION

Bohdan Harasymiw

Overview

Corruption cannot be seen or measured, yet everyone is convinced it is all-pervasive and persistent. The Corruption Perceptions Index (CPI) published by Transparency International is one measure. It is invisible—it cannot be detected, because it is carried out in secret, except after the fact. It seems to be everywhere, but can it be curbed? If so, how? Why is it important to combat?

Under Poroshenko Ukraine is attempting to rein in corruption. This is being encouraged by the EU and the IMF—money is at stake, as support for anticorruption measures and as loans. Progress is uneven. This is not the first such campaign. Is it any different? Some current goings-on.

Definitions and theories of corruption. Remedies based thereon.

The current campaign. Steps taken, laws passed, institutions created. The obstacles. A beginning of sorts has been made.

The unbreakable business-government nexus. A closed circle of predatory capitalism, as laid out by Stanislav Markus. The Verkhovna Rada—its legislative record.

The prospects are dim, in view of Ukraine’s track record, and because the people who could make a difference are actually standing in the way.

Introduction

How can something so difficult to define or to measure, and impossible to see, be the cause of so much handwringing on account of its purportedly life-and-death consequences for the future of Ukraine as a viable nation-state? Everyone, it seems, is alarmed about it, yet no one has been able to curb it.[1] One of the Euromaidan’s main grievances in 2014 was the extraordinary prevalence of corruption under President Viktor Yanukovych. Since his departure, the governing tandem of President Petro Poroshenko and Prime Minister Arsenii Yatseniuk has launched a renewed campaign to stamp out political corruption. Can the present-day anticorruption efforts by the Ukrainian government be expected to yield any better results than countless previous attempts?

Anyone who is or has been associated with the Canadian Institute of Ukrainian Studies on this campus may, in this connection, incidentally, find it mildly amusing to recall an article in the local Ukrainian News/Ukrains’ki visti newspaper dated 6-19 May 1998. There, under the heading “Corruption Rife in Ukraine, Yale Conference Told,” is a photo of former CIUS Director Bohdan Krawchenko looking very serious. The reason apparently being that the conference, as the article says, “presented a grim picture of an economy in the grip of organized crime and corrupt politicians.” Continuity of historical patters can be very reassuring—if not to historians, then to the self-same “corrupt politicians.”

In the social sciences there seem to be as many definitions of “corruption” as there are scholars writing about it.[2] Otherwise, current affairs analysts and commentators are more likely to launch into extended treatments of the phenomenon without even defining the term. Fortunately, all of them—scholars, pundits, and the general public—are in basic, if implicit, agreement on what “corruption” means in politics and why it matters.[3]

“Political Corruption,” according to The Social Science Encyclopedia, “can be defined as the misuse of public office or authority for unsanctioned private gain.”[4] The same source concludes that “the definition, causes and effects of corruption and techniques of reform continue to be matters of controversy among sociologists and political scientists. What has been established beyond dispute is that political corruption is a widespread, pervasive and potentially serious phenomenon.”[5]

A more elaborate definition is offered by British academic Mark Philp. “Core cases of corruption,” according to him, “involve four key components:

  1. a public official (A), acting for personal gain,
  2. violates the norms of public office and
  3. harms the interests of the public (B),
  4. to benefit a third party (C) who rewards A for access to goods and services which C would not otherwise obtain.”[6]

Others likewise emphasize corruption as a market exchange, but more emphatically so. Diego Gambetta, renowned expert on the Sicilian mafia, for example, says that “a corrupt exchange . . . involves three agents rather than two. I . . . call them the truster (T), the fiduciary (F), and the corrupter (C).”[7] Essentially, “C wants certain resources that F is not supposed to deliver to him, given the conditions of his relation to T. . . . Offering a bribe to F is one way to achieve that.”[8] The resources that one is not entitled to can be misappropriated or bought; so “the standard corruption case does,” according to Gambetta, “have the features of a market exchange.”[9] Further, he supposes that “T and F agree on a set of rule-bound actions, ar, which F must perform when allocating the resources to him. The agreement rules out another set of wrong actions, aw.”[10] Thus “the key to indentifying corruption must lie in the motive that persuades F to do aw. . . . There has to be an exchange between F and C such that C’s bribe to F is the motive for F to do aw.”[11] In sum, “for corruption to obtain, both parties must know that they are violating an allocation rule set by the relationship between T and F and that the bribe is the price C pays to persuade F to infringe it.”[12] Although Gambetta argues otherwise, whether and in what circumstances this approach would be applicable is itself debatable.

In the 1990s, when the study of political corruption was experiencing a boom, the authors of an overview of the phenomenon observed that “acts usually called ‘corrupt’ . . . involve the suspension of normatively-defined criteria for the allocation of resources (whereby the distribution of resources is as such defined as legitimate) in favour of allocation mechanisms—market exchanges—whose distributive consequences are inherently arbitrary.”[13] Being arbitrary and thus lacking legitimacy, corruption is therefore subversive of legal-rational authority as well as of social order in general; being inegalitarian, it subverts liberal democracy in particular; and it is self-perpetuating. Hence the concern.[14]

Still other scholars have approached corruption from the perspective of principal-agent interaction, wherein “corruption occurs when agents renege on their agreements with principals in favour of their personal interest.”[15] In the end, as was said at the time, “there are many ways to conceive of and define corruption, each one with its strengths and weaknesses. Ultimately, a researcher . . . must simply choose the most useful definition given his particular concern and disciplinary taste.”[16]

The dire situation in Ukraine in respect of corruption is often substantiated by reference to the Corruption Perceptions Index collected and promulgated by Transparency International. According to the 2009 version of this index, Ukraine, with a CPI score of 2.2 out of 10.0, stood in 146th place, tied in the same ranking as Cameroon, Ecuador, Kenya, Russia, Sierra Leone, and Timor-Leste.[17] Canada, by comparison, occupied 8th spot with a score of 8.7, in a tie with Australia and Ireland. New Zealand topped the list with a score of 9.4. By 2015, Ukraine was in 130th place, with 27 out of 100 points. It was tied with Cameroon, Iran, Nepal, Nicaragua, and Paraguay. Canada was now in 9th place with 83 points, behind Singapore and ahead of Germany. Denmark placed first with 91 points.[18] Assessments of the validity and reliability of this index vary from one extreme to the other.[19] “While no measure is perfect,” we learn from one source, “TI’s Corruption Index appears to be a rather robust one. It, and others like it, should be instrumental in helping future research make significant progress toward more comprehensive explanations of corruption.”[20] Another tells us flatly that measuring corruption is impossible, and the CPI is the worst way of guesstimating it.[21] Despite its defects, the CPI still serves as a bellwether for some of Ukraine’s leading diagnosticians, such as Anders Åslund.[22] At the very least, the CPI tells us that corruption is global, that it is a matter of degree, and that it is a variable rather than an absolute.

Despite its having been a part of humanity for millennia, and having evidently become a “norm of life” in Ukraine, corruption is not insuperable. But the catch, as Ihor Siundiukov writing in the daily newspaper Den’ puts it, is that the struggle must be genuine, not rhetorical.[23] His prescription, based on a quick scan of these millennia of history and prehistory (he even mentions Hammurabi, King of Babylon), for this “corrosion of the state machinery,” is essentially threefold: (1) transformation of property relations so as to create an economically independent social class no longer reliant on bribes as an inducement for state officials to do their duty; (2) dismissal and prosecution of officials against whom there is evidence of corruption; and (3) renewal of basic elements of morality, culture, and spirituality in society.[24]

A more rigorous theory of corruption, which leads to a more thought-through set of remedies, has been put forward by Michael Johnston.[25] Proceeding from the observation that officials are freer to act with impunity in conditions of reduced competition, and of weakness in “state institutions, civil society, and civil liberties,”[26] he formulates four scenarios of corruption. These are based on participation and institutions, and how these accommodate or limit access for those with wealth and power.[27] The four syndromes of corruption are: (1) Influence Markets, typical of affluent democracies, where “corruption . . . is likely to be the exception, not the rule,” because the acquisition of wealth is independent of political power; (2) Elite Cartels, where politics and the economy are less fully liberalized, politics are less competitive, institutions are weaker, and elites have more incentive to collude for sharing wealth and power; (3) Oligarchs and Clans, where rapid liberalization and insecurity encourage a scramble to acquire both wealth and power, and the stakes are high, where “the result is corruption that is extensive, difficult to anticipate, potentially linked to violence, and thus particularly damaging to political and economic development;”[28] and (4) Official Moguls, where there are few, if any, opportunities for legitimate political participation, yet the economy is being liberalized, so that the top political figures  are also the entrepreneurs unrestrained by competitors or society in exploiting their many monopolies.[29] The latter may develop into “full-blown ‘kleptocracy,’ or rule of thieves.”[30] Johnston tests his model against data from 168 countries, the results of which, he says, “are . . . consistent with the view that relationships between corruption and development vary in different sorts of political and economic systems.”[31]

Of particular interest for present purposes is the finding of Johnston’s empirical test to the effect that “Group 3 is more tightly clustered, suggesting a distinctive corruption-and-development profile.”[32] The common characteristics of Group 3 countries present a “pessimistic” picture. Democratization shows little progress. “Political rights, civil liberties, and the rule of law are markedly less secure; . . . there is significant political competition, but mass participation . . . is likely to be risky and ineffective. Leaders face fewer political constraints and regimes are less stable. Government is ineffective, regulation frequent and of dubious quality, and corruption controls are rated the least effective of all . . . four groups. Economic opportunities are growing, . . . but for relatively few people, . . . and black markets are extensive. . . . As suggested, both political and economic elites will find it difficult to protect their positions and gains in such systems, and potential anti-corruption forces are weak.”[33] It is to Group 3 in Johnston’s scheme that Ukraine appears to belong, both theoretically and empirically.

Accordingly, the common prescription of more political and economic liberalization cannot work as a reform strategy equally well in all countries, given their different levels of development.[34] In Group 3 countries (“Oligarchs and Clans”), it is not the oligarchs and political elite that need to be removed, so much as their common insecurity.[35]

The best reform strategy might well be institution building aimed at reducing insecurity. This would entail, not radical revision of the political and economic framework, but rather credible and sustained improvement in basic (but critical) state functions: tax collection (both to make tax burdens more predictable and equitable, and to be able to pay public officials’ salaries), the judicial system, the protection of property rights, law enforcement, supervision of capital and equity markets, titles to land and property, and so forth. Such improvements in the public sector should be matched by similar institutional development in the private. . . . Civil society building and political-party building, . . . like other measures proposed here, will not be easy but will be essential.[36]

What Ukraine and its backers have been doing in the latest anticorruption campaign can profitably, therefore, be assessed against this background for its appropriateness and chances of success.

Poroshenko’s Anticorruption Policies

By the year 2000, Ukraine already had some 52 laws and regulations related to the struggle against corruption, the main ones being: the law against corruption of 5 October 1995; a presidential decree adopted on 24 April 1998; and a Supreme Court decision dealing with corrupt practices brought in on 25 May 1998, amended on 3 March 2000.[37] The Law Against Corruption defined corrupt activity, made distinctions among such activities, specified officials subject to the law, and provided for criminal as well as administrative sanctions. It was, however, at the same time “rather general,” lacking in clarity, and unrealistic from the point of view of a “time-frame for bringing legal proceedings.”[38] That members of the national assembly (Verkhovna Rada) were constitutionally immune from prosecution, and that the judiciary was less than fully independent, also seriously undermined the law’s effectiveness.[39] The 1988 presidential decree on fighting corruption was notable for suggesting “political, economic, legal, managerial, and social-psychological ways to prevent the further spread of corruption in Ukrainian society,” and was viewed by some “as an important achievement, . . . [being] one of the first official documents that publicly recognized the problem of corruption and suggested ways to fight it.”[40] In general, as was said shortly thereafter, “lack of enforcement appears to present the major problem for the Ukrainian system. This weakness creates a lack of confidence in the rule of law and leads to resistance on the part of government to give up or transform its role as a major coordinator of economic activity.”[41] Laws in themselves are not enough, of course. “Corruption cannot be fought solely through criminal law,” as Susan Rose-Ackerman has said.[42] At best, “the criminal law can play a role as a backstop lying behind the needed structural changes.”[43] According to her, then, “the goals of law enforcement should be to isolate those corrupt systems which are doing the most damage to society and then to organize the deterrence effort to make corruption costly on the margin and to give participants an incentive to report corrupt deals.”[44] Technically speaking, the 1995 law, Taras Kuzio informs us, “became redundant after Ukraine joined the Council of Europe’s Group of States against Corruption and . . . expired in December 2010.” After a five-month hiatus, he notes sardonically, “in April 2011 a new law on corruption received 277 ‘votes’ when only 158 deputies were registered in parliament, a reflection of the low priority of this legislation for the Yanukovych administration.  Poor and inefficient coordination, and enforcement of anti-corruption legislation contributed to a lack of implementation. Adopting legislation is insufficient,” is his observation thereon.[45] Resorting in apparent exasperation to the oft-repeated refrain, Taras Kuzio says simply that “Ukraine does not require new legislation to fight corruption but political will.”[46]

In the latest cycle of anticorruption policy, a package of laws adopted on 14 October 2014 set out a strategy for the next three years, created an independent investigative body in the shape of the Anti-Corruption Bureau, and established a National Anti-Corruption Commission.[47] According to Anders Åslund, the Bureau “is supposed to open corruption cases against senior state officials, who have traditionally enjoyed immunity. The National Commission for the Struggle Against Corruption is supposed to check the income declarations of state officials against their actual spending and lifestyle. Both these institutions are supposed to be independent and well paid, but it remains to be seen is that will be the case.”[48]

The latest impediments—there are always new ones, as Ukrainians are so inventive—to the latest policies, however, appear to be equally insurmountable as were those of a generation ago, if not more so. Thus, the Anticorruption Bureau has been stymied in getting underway because, while they are authorized to open files and to investigate, its detectives cannot prosecute. That awaits the creation of a special arm of the Prosecutor-General’s Office (PGO).[49] The PGO, a state-within-the-state left over from the Soviet era, is itself a self-enclosed hive of corruption unsusceptible to reform.[50] Even a US threat to withhold credits were the Prosecutor-General, Viktor Shokin, not dismissed, and US Ambassador Geoffrey Pyatt’s call for his dismissal have produced nothing.[51] Shokin offered his resignation to President Poroshenko in February and went on holiday, but in mid-March was back at work.[52] So the prosecutorial arm of the National Anticorruption Bureau will operate not independently, if at all, but under the thumb of a widely-discredited Prosecutor-General, whose removal now requires a parliamentary vote where a pro-reform majority is unlikely in the present–March 2016–political crisis.[53] Here the expertise of states like Singapore and Hong Kong, whose “success in fighting corruption are to no small extent related to the fact that they both have single, powerful, and independent ACAs [Anti-Corruption Agencies],” has obviously not been followed. “Where there are multiple agencies,” as Leslie Holmes notes, “there are usually overlapping and often conflicting responsibilities, which results in problems of coordination and buck-passing; there are typically also huge inefficiencies and wasted resources.”[54]

Similarly, the winter of 2015-16 witnessed a bold attempt by Ukraine’s parliamentarians to weaken the legislation regarding electronic declaration of assets by public officials. On 16 February 2016, bill 3755 passed through the VR, virtually nullifying the original e-declaration law. Among its provisions were: delaying criminal liability until 2017; removing family members not residing at the same address from disclosure rules; limiting disclosure of valuables to such as are to be acquired after the law’s coming into effect; and increasing the threshold for declaring assets.[55] Following street demonstrations in Kyiv by activists, however, as well as pressure from the EU, Poroshenko vetoed the bill sending it back for revision. On 15 March, an amended version of this law was passed containing a number of improvements, but still “far from perfect.”[56]

As to lustration, about the efficacy or even necessity of which in general Taras Kuzio expresses serious reservations,[57] the law on which went into effect on 16 October 2014, there is little to report in the way of progress. As summarized in the press, the law aims to: prohibit persons associated with the Yanukovych regime from occupying administrative posts for up to 10 years; apply to wrongful acts of law enforcement, judicial, and prosecutorial personnel; and require full disclosure of assets by all public servants and officials.[58] During 2015, several instances of officials’ falling under the scope of the law came to light, specifically in the Interior and Justice Ministries and the Security Service of Ukraine (SBU).[59] Yet no high-ranking official from that era, including ex-President Yanukovych himself, has been caught up in the lustration net.[60] The Council of Europe’s Venice Commission has also criticized aspects of the Ukrainian lustration law as anti-democratic, endangering human rights, and inimical to the rule of law.[61] This is a project, then, as part of the struggle against corruption, that has still not gotten off the ground—and really needed to be launched 25 years ago, long before now.

Addressing the first meeting of his newly-created Anticorruption Council in October 2015, Poroshenko announced that in the previous two months more than 500 individuals had been brought to justice over charges of corruption and 492 convicted. This demonstrated, he said, the evident political will driving the fight against corruption.[62] In December, Poroshenko’s spokesperson revealed that the SBU had apprehended a top official of the state export control service in the act of demanding a $250,000 bribe for the issuance of an export license. This followed a series of arrests in the preceding weeks and months.[63] Just a day later, however, the President—while thanking SBU Head Vasyl Hrytsak for his intense work—declared himself dissatisfied with the overall results of the battle with corruption. Addressing the newly-appointed heads of the NAB and SAP, he emphasized that no officeholder should be immune to prosecution conceding thereby that they had been before then.[64] A few weeks later, it was revealed that the earlier-named officials had been released by the courts and returned to work instead of being dismissed or suspended.[65] Meanwhile the US Ambassador, Geoffrey Pyatt, noted that progress was being made, as evident in the creation of the corruption-fighting institutions, but suggested that a change of approach was really needed instead.[66] The Head of the International Monetary Fund (IMF), Christine Lagarde, for her part, expressed concern about the evident lack of progress in his fight against corruption informing President Poroshenko that the IMF’s $17.5 billion bailout for Ukraine was being put a risk; he hastened to reassure her of his “unwavering commitment to reforms, including improving governance and fighting corruption.”[67] It must be obvious to Poroshenko that his half-hearted approach is not working, but maybe that’s all that is possible.

Outside observers were especially alarmed by the sudden and dramatic resignation on 3 February 2016 of Economic Development and Trade Minister Aivaras Abromavicius, citing “the pressure to appoint questionable individuals to my team or to key positions in state-owned enterprises. I can only interpret these actions,” he said in announcing his resignation, “as a persistent attempt to exert control over the flow of money generated by the state-owned enterprises, especially NAK Naftogaz and the defence industry. I refuse to be part of this system. Neither me, nor my team are prepared to serve as a cover-up for the schemes, old or new, that have been set up in the private interest of particular political or business players.”[68] Thus, according to veteran Ukraine-watcher Andrew Wilson, “the same old vicious circles [of money and politics] spin around.”[69] And while “many good things have been done, . . . they don’t break these circles.”[70] Noting that “Mr Abromavicius is the second economy minister since the revolution to quit for similar reasons, and the fifth minister to resign from the current government,” The Economist provided its analysis of the matter thus:

Mr Abromavicius’s problems mounted last year after his ministry was given control over Naftogaz, the state gas firm, and the power to appoint the 60 top state-owned enterprises (SOEs). Ukraine’s SOEs exemplify the crooked relationship between business and government: interest groups in parliament install “loyal” managers who funnel cash to oligarchs and political parties. Mr Abromavicius says he was pressured to let these appointments go through. . . . The tipping point came when Mr Kononenko demanded that he appoint a crony as his deputy minister.[71]

The trouble is, says The Economist, that “figures like Mr Kononenko abound in Ukraine’s parliament; locals call them ‘grey cardinals’ or lyubi druzi (‘dear friends’). The lines between friends, business partners, relatives and political allies are blurred, says Mr Abromavicius, and reforms have stalled.”[72] Without curtailing corruption at the very top of the political system to begin with, there is no hope of its eradication anywhere else. Returning to the analytical scheme of Michael Johnston, this Abromavicius case illustrates that wealth and power have not been separated as yet in Ukraine, that elites are not secure, that the state is still weak, and that none of the appropriate ameliorative processes has been properly set in motion or gained any perceptible momentum.

What might move the process of reform and change further? According to Andrew Wilson, none of the usual drivers of change—elections, civil society, or the media—can be counted on to work. “The one thing that does work,” he says, “is what locals call the ‘sandwich’—Ukrainian politicians grudgingly reform when they are subject to twin pressures from society at home and donors abroad.”[73] In view of which, if the locals are right, “part of the job of the civil sector in Ukraine is to convince the West that change is possible and financial support is not just disappearing down a black hole. The job of the West is to keep paying attention, when there are so many other diversions, from Syria to the refugee crisis.”[74] Fortunately, the EU, supported by European public opinion, has been consistently pressing Ukraine on the priority of tackling corruption and backing it up with financial aid to do so.[75] A glimmer of hope on the domestic side in this regard is, for example, the recent announcement by the confederation of free trade unions of its joining the anti-corruption battle.[76] Andrew Wilson’s endorsement of “the sandwich” as a way to move forward also finds an echo in Stanislav Markus’s prescription for overcoming Ukraine’s “piranha capitalism”: for a start, “firms can enforce their property rights through alliances with stakeholders, such as foreign investors, local communities, and labor.”[77]

Many analysts focus their attention on the “oligarchs” in fashioning policy for reducing political corruption. On such is the economist, parliamentarian, and presidential adviser Volodymyr Lanovyi. In his view, states like New Zealand, Finland, Hong Kong, and Singapore, which have managed to overcome corruption have done so by following four basic steps: transparency of government; deregulation of the economy and decentralization of money flows; civil society legally secured; and discouragement of the fusion between government and business, and thus of the rise of an oligarchic class.[78] Reform of Ukraine’s oligarchic system, correspondingly, requires: (1) placing limits on oligopolies; (2) diversifying the modes and models of privatization’ (3) deregulation and de-bureaucratization of the operation of the economy; (4) eliminating government corporations; (5) making bankers legally responsible; (6) introducing market methods for bankruptcy proceedings; (7) changes to the tax system; (8) barring businessmen from government employment and making government officials criminally responsible for any business-friendly decisions; (9) introducing criminal liability for political corruption; and (10) changing the oligarch-favouring electoral system into a more truly democratic one of proportional representation.[79] That no such action against “oligarchs” has hit the headlines since Lanovyi’s proposals were made in 2014 is indicative of Ukraine’s incapacity, ineptitude, or incompetence in the struggle against political corruption, since such a policy makes sense from a variety of points of view.

Election finance is an area rife with corruption due to the presence of the “gray cardinals” who funnel illicit monies from the treasury and state firms to needy politicians. In view of which, Anders Åslund suggests several key actions to break the chain of supply and demand, or demand and supply, as the case may be. “To begin with,” he says, the salaries of ministers, their deputies, heads of departments, and parliamentarians should be raised dramatically for the current cap of $230 a month to at least ten times more. . . . According to unconfirmed reports, even some seemingly ‘honest’ ministers depend on black cash from gray cardinals of as much as $50,000 a month. After ministers and parliamentarians have become dependent on a gray cardinal, he can order them to obey his commands contrary to law. But if ministers would be able to live on their salaries, their now deceptive declarations of income and wealth could be audited and start to make sense. This measure could be implemented instantly.”[80] As noted above, a start has been made with the law on electronic asset reporting, but it has been resisted by the parliamentarians, salaries have not been raised, and removal of the “cardinals” has not even begun to be contemplated. “Second,” in Åslund’s reckoning, “Ukraine’s elections are extraordinarily expensive. . . . Fortunately, on October 8 [2015] the Rada adopted a law on public financing of political parties that limits the amount private individuals and enterprises are allowed to give to parties.”[81] Public financing of political parties’ activities will be based on their share of the electorate; SOEs are forbidden from donating to parties; and parties contesting elections, as well as those publicly financed, are subject to annual audits. Third, according to Åslund, the money streams of the “black cardinals”—whether directly from the state or state enterprises—must be blocked. Most state enterprises, he reckons, are of little value; they should be auctioned off , while the rest “need to be cleaned up and given proper corporate governance as the Ministry of Economic Development and Trade is trying to do, though it faces severe resistance from the gray cardinals who control these enterprises.”[82] (See above, regarding the resignation of Minister Abromavicius.) Then these SOEs should be privatized. “A fourth measure,” he says, “is to give the ministers the right to appoint all their deputies and heads of departments. Today, the gray cardinal in charge of a ministry usually appoints a first deputy minister as his representative or ‘smotryashchiy,” who supervises criminal activities.”[83] This is precisely what triggered the resignation of Abromavicius—he was confronted with a fait accompli, and refused to accept it. But his action was rare. As Åslund says, “the gray cardinals should be taken out of business. The Ukrainian state,” however, “is probably too weak to do so, which means that Western governments will have to help out.[84] There is certainly no lack of intelligent and thoughtful advice on anticorruption policy for Ukraine; the problem is in turning advice into action. The principal institutions with the power to initiate the necessary radical changes—president, prime minister and cabinet, and national assembly (VR)—are all, however, compromised by their links to the system of corruption; hence the mediocre response.

It is not as though there were no public support for fighting corruption—corruption is the Ukrainian public’s number one concern, and the Euromaidan revolution was in large part about corruption in Yanukovych’s regime.[85] In fact, President Poroshenko in June 2015 vetoed a bill that would have established a body through which citizens could make accusations of corruption against state officials, a kind of vigilante justice almost, not quite what the EU has in mind in urging rule of law in Ukraine.[86]

In December 2015, the VR passed a law on the state bureaucracy aimed at making it more of a public service, and hence strengthening the state in relation to the “oligarchs.”[87] It differentiates political from administrative offices, introduces the position of ministerial secretary responsible for personnel, authorizes recruitment to the civil service solely by open competition, provides for gradual increases in salaries, requires all civil servants to have a command of the official language, and introduces legal liability for damages caused by negligent behaviours. The law is to go into effect on 1 May 2016. Various state agencies are exempt from its application. It will, all the same, take many years to transform Ukraine’s Soviet-style state bureaucracy into a normal public service on the Weberian rational-legal model—autonomous, professional, competent, and impartial—serving the public good rather than political or personal interests.[88]

In the current political crisis, therefore, the foregoing discussion may help to make sense of the conditions laid down by Natalie Jaresko were she to take over the prime ministership from Arsenii Yatseniuk. She wants members of her government of technocrats to: “[1] be devoted exclusively to serving the people of Ukraine; not themselves nor their party nor vested interests. . . . [2] completely intolerant of corruption and political interference in the work of executive authorities. . . . [3] be concerned neither about participation in the next elections, nor their own political careers. . . . [4] believe that Ukraine can be successful only through democratic and economic reforms. . . . [and 5] be experienced crisis managers and have experience of successful reforms and organizational management.”[89] This sounds appealing to Western ears, especially students of public administration, and would constitute a necessarily radical step for combating corruption, but will Poroshenko, parliamentarians, the political elite, and the “oligarchs” buy it?

Conclusion

Political corruption is harmful—it diverts resources rightfully in the public sector into private hands, it erodes the legitimacy of the political order, it is wasteful, it discourages foreign aid and investment, it encourages cynicism and social inequality, it is an involuntary tax, and it corrodes democracy. It is considered to be a systemic problem in Ukraine, and was a leading theme motivating the 2014 Euromaidan revolution. Since then, the Poroshenko-Yatseniuk government has conducted a campaign against corruption that can only be described as half-hearted. New anti-corruption agencies have been created, and new laws on public financing of political parties as well as reforming the public service have been passed. But there is now a multiplicity of bodies engaged in this fight, and the results are disappointing. It is a timid start. The mild approach comes in part from the fact that the principal institutions capable of making the necessary changes, of fashioning a strategy, and of directing the campaign are self-interested actors. Key individuals—reformers as well as defenders of the status quo—resign, go on holidays, and then return to work. This campaign is a lackadaisical affair. Lists of measures that need to be taken are published by various experts, most of them in basic agreement, and then lie unexplored and unrealized. Discrete measures limited to the governmental or economic sectors, or to catching individuals, are not enough to combat corruption in Ukraine. The entire political order, with its foundation, must be shifted out of its present location on the developmental scale towards what Michael Johnston calls the Influence Markets syndrome, where political corruption is the exception not the rule. That requires reform of Ukraine’s system of government as a whole—state, law, economy, culture, and society—which also means that RIDRU should be in business for a long time to come.

 

29 March 2016

 

[1] Most recently, for example, Taras Kuzio, Ukraine: Democratization, Corruption, and the New Russian Imperialism (Santa Barbara and Denver: Praeger, 2015), chap. 9, “The Rule of Law and Corruption.”

[2] For a concise and up-to-date treatment, see Leslie Holmes, Corruption: A Very Short Introduction (Oxford: Oxford University Press, 2015), chap. 1, “What is Corruption?”

[3] For a quick refresher, see Holmes, Corruption, chap. 2, “Why corruption is a problem.”

[4] The Social Science Encyclopedia, ed. by Adam Kuper and Jessica Kuper (rev ed., London and New York: Routledge, 1989), s.v. “Corruption.”

[5] Ibid.

[6] Mark Philp, “Political Corruption, Democratization, and Reform,” in Political Corruption in Transition: A Skeptic’s Handbook, ed. Stephen Kotkin and András Sajó (Budapest and New York: Central European University Press, 2002), 57.

[7] Diego Gambetta, “Corruption: An Analytical Map,” in Political Corruption in Transition, ed. Kotkin and Sajó, 35.

[8] Ibid., 35-6; emphasis in the original.

[9] Ibid., 36.

[10] Ibid. 37; emphasis in the original.

[11] Ibid., 41; emphasis in the original.

[12] Ibid., 44.

[13] Martin J. Bull and James L. Newell, “New Avenues in the Study of Political Corruption,” Crime, Law & Social Change 27, no. 1 (1997): 174; emphasis in the original.

[14] Ibid., 174-6.

[15] Thomas D. Lancaster and Gabriella R. Montinola, “Toward a Methodology for the Comparative Study of Political Corruption,” Crime, Law & Social Change 27 (1997): 190.

[16] Ibid., 191.

[17] Transparency International, “Corruption Perceptions Index 2009,” http://www.transparency.org/, accessed on 29 September 2010.

[18] Transparency International, “Corruption Perceptions Index 2015,” http://www.transparency.org/cpi2015, accessed 19 March 2016.

[19] Holmes, Corruption, chap. 3, “Can we measure corruption?” Holmes cautions that “for most purposes, citing a country’s score is less potentially misleading than citing its rank, certainly if over time comparison is being made.” Ibid., 41.

[20] Lancaster and Montinola, “Toward a Methodology,” 199.

[21] Enre Sik, “The Bad, the Worse and the Worst: Guesstimating the Level of Corruption,” in Political Corruption in Transition, ed Kotkin and Sajó, 91-113.

[22] Anders Åslund, Ukraine: What Went Wrong and How to Fix It (Washington, DC: Peterson Institute for International Economics, April 2015), 91.

[23] Ihor Siundiukov, “Koruptsiia ta istorychnyi dosvid sprob yiyi podolannia,” Den’, 9 November 2015, http://www.day.kiev.ua/uk/article/podrobyci/korupciya-ta-istorychnyy-dosvid-sprob-yiyi-podolannya, accessed 10 November 2015.

[24] Ibid.

[25] Michael Johnston, “Comparing Corruption: Participation, Institutions, and Development,” in Private and Public Corruption, ed. by William C. Heffernan and John Kleinig (Lanham, Maryland: Rowman & Littlefield, 2004), 275-322.

[26] Ibid., 277.

[27] Ibid., 288.

[28] Ibid., 290.

[29] Ibid., 291.

[30] Ibid.

[31] Ibid., 300.

[32] Ibid.

[33] Ibid., 306.

[34] Ibid., 308.

[35] Ibid., 311.

[36] Ibid., 311-12.

[37] Anna Markovskaya, William Alex Pridemore, and Chizu Nakajima, “Laws Without Teeth: An Overview of the Problems Associated with Corruption in Ukraine,” Crime, Law & Social Change 39, no. 2 (2003): 199.

[38] Ibid., 199-200.

[39] Ibid., 200.

[40] Ibid., 201.

[41] Ibid., 203.

[42] Susan Rose-Ackerman, “Corruption and the Criminal Law,” Forum on Crime and Society 2, no. 1 (December 2002): 3.

[43] Ibid.

[44] Ibid., 18.

[45] Kuzio, Ukraine, 349.

[46] Ibid., 350.

[47] Åslund, Ukraine, 143.

[48] Ibid., 144.

[49] For the full story as it has been running in the Ukrainian press, see: Ivan Kapsamun, “Komu rozhribaty?” Den’, 22 December 2014, http://www.day.kiev.ua/uk/article/podrobyci/komu-rozgribaty; “Shokin pidpysav nakaz pro stvorennia antykoruptsiinoi prokuratury,” UNIAN, 22 September 2015, http://www.unian.ua/politics/; “Poroshenko nevidkladnoho formuvannia antykoruptsiinoi prokuratury,” Den’, 19 October 2015, http://www.day.kiev.ua/ru/; “YeS vymahaie zmin u stvorenni antykoruptsiinoi prokuratury: vplyv Shokina zavelykyi,” Yevropeis’ka pravda, 27 October 2015, http://www.eurointegration.com.ua/news.2015/10/27/7039972/; “V YeS zazhadaly zaminyty ‘chetvirku Shokina’ cherez problem u stvorenni antykoruptsiinoi prokuratury,” and “Klimkin zaperechuie konflikt mizh MZS i Shokinym cherez stvorennia antykoruptsiinoi prokuratury,” UNIAN, 27 October 2015, http://www.unian.ua/politics/; Fedir Popadiuk, “Vybory antykoruptsiinoho prokurora: Diia druha,” Ukrains’ka pravda, 25 November 2015, http://www.pravda.com.ua/articles/2015/11/25/7090056/; Omar Uzarashvili, “Do viiny z koruptsiieiu hotuvalysia tsilyi rik,” Vysokyi zamok, 5 January 2016, http://wz.lviv.ua/ukraine/155120, accessed 5 January 2016; “Pryznacyvshy prokuroriv til’ky z systemy, Shokin proiavyv nepovahu do suspil’stva—ekspert,” Dzerkalo tyzhnia, 1 January 2016; “Porosheno nazvav prychyny, z iakoi ne zvil’niaie Shokina,” Dxerkalo tyzhnia, 14 January 2016; Anastasiia Ringis, “Antyreforma: Yak henprokuror Shokin zatsementuvav prokuraturu, i shcho z tsym robyty,” Ukrains’ka pravda, 22 February 2016, http://www.pravda.com.ua/articles/2016/02/22/7099861; and Alina Kuptsova, “Genprokuratura VS pravookhranitel’naia reforma: rabotu novykh organov sabotiruiut,” Obozrevatel’, 4 March 2016, http://obozrevatel.com/politics/17042.

[50] Kuzio, Ukraine, 343-8.

[51] “SShA pryv’iazaly nadannia kredytnykh harantii Ukraini do vidstavky Shokina,” Dzerkalo tyzhnia, 21 January 2016; and “Nezadovolenyi sabotazhem reform v HPU Paiett pryvitav vidstavku Shokina,” Dzerkalo tyzhnia, 18 February 2016.

[52] “Ukraine’s ‘Resigned’ Chief Prosecutor Appears Back at Work,” bne Intellinews, 16 March 2016, http://intellinews.com/ukrain-s-resigned-chief-prosecutor-appears-back-at-work-92983/.

[53] Contrary to expectations, however, on 29 March 2016, the vote in the VR requiring Shokin’s dismissal did pass. “U HPU poiasnyly, khto vykonuvatyme obov’iazky henprokuratora,” Ukrains’ka pravda, 29 March 2016, http://www.pravda.com.ua/news/2016/03/29/7103736/; and “Rada dala dobro na vidstavku Shokina,” Dzerkalo tyzhnia, 29 March 2016.

[54] Holmes, Corruption, 125.

[55] Josh Cohen, “Parliament Votes to Weaken Ukraine’s Key Anti-Corruption Law,” Atlantic Council, 23 February 2016, http://www.atlanticcouncil.org/blogs/new-atlanticist/.

[56] Josh Cohen, “Don’t Mess With Kyiv’s Activists,” Atlantic Council, 22 March 2016, http://www.atlanticcouncil.org/blogs/new-atlanticist/.

[57] Kuzio, Ukraine, 349.

[58] “10 kliuchovykh punktiv zakonu pro liustratsiiu: Dovidka,” Tyzhden’, 15 October 2014, http://tyzhden.ua/News/121324.

[59] “V SBU liustruvaly bil’she sta kerivnykiv,” Tyzhden’, 4 April 2015, http://tyzhden.ua/News/133580; “Pid Liustratsiiu vzhe potrapyly ponad 400 chynovnykiv—Min’iust,” Tyzhden’, 14 April 2015, http://tyzhden.ua/News/134243; and “Pid liustratsiiu potrapyly 15 kerivnykiv oblasnykh upravlin’ MVS,” Tyzhden’, 8 May 2015, http://tyzhden.ua/News/136006.

[60] Dmytro Kryvtsun, “Liustratsiia bez ochyshchennia,” Den’, 23 March 2016, http://www.day.kiev.ua/article/podrobyci-intervyu/lyustraciya-bez-ochyshchennya.

[61] “Council of Europe Venice Commission: some provisions of Ukrainian lustration law should be revised,” Interfax-Ukraine: Ukraine News Agency, 12 December 2014, http://en.interfax.com.ua/news/general/239646.html, accessed 25 March 2016.

[62] Reuters, “Ponad 500 koruptsioneriv prytiahnuto do vidpovidal’nosti za ostanni dva misiatsi—Poroshenko,” UNIAN, 6 October 2015.

[63] “Pravookhorontsi spiimaly zastupnyka holovy Sluzhby eksportnoho kontroliu na khabari v $ 250 tysiach,” Dzerkalo tyzhnia, 9 December 2015.

[64] “Poroshenko rozkrytykuvav rezul’taty borot’by z koruptsiieiu v Ukraini,” Dzerkalo tyzhnia, 10 December 2015.

[65] Dzerkalo tyzhnia, 16 February 2016.

[66] “Paiiett pomityv prohres u borot’bi z koruptsieiu v Ukraini,” Dzerkalo tyzhnia, 13 January 2016.

[67] EW News Desk Team, “IMF Obtains Commitment from Ukraine to End Corruption,” Economy Watch: Follow the Money, 11 February 2016, http://www.economywatch.com/news/IMF. . . .

[68] “Statement by the Minister of Economic Development and Trade of Ukraine Aivaras Abromavicius,” Ministry of Economic Development and Trade of Ukraine, Official Web-site, [3 February 2016], http://www.me.gov.ua/News/, accessed 25 March 2016. For more on the resignation, see: “Posly dev’iat’okh zakhidnykh krain pidtrymaly Abromavichusa,” Vysokyi zamok, 3 February 2016, http://wz.lviv.ua/ukraine/158728; “’Syly zla khochut’ vidmotaty vse nazad’: Naivazhlyvishe vid Abromavichusa,” Ekonomichna pravda, 3 February 2016, http://www.epravda.com.ua/publications/2016/02/03/579719/; “Khto takyi Pin’kas, cherez yakoho podav u vidstavku ministr Abromavichus,” and “”Abromavichus ide u vidstavku cherez tysk i blokuvannia reform,” Dzerkalo tyzhnia, 3 February 2016; and Alec Luhn, Economic minister’s resignation plunges Ukraine into new crisis,” Guardian, 4 February 2016, http://www.theguardian.com/world/2016/feb/04/.  On 16 March, however, it was reported that the Minister had returned to work from his vacation. “Minister Abromavicius back to work after vacation,” UKRINFORM, http://www.ukrinform.net/rubric-politics/1983034.

[69] Andrew Wilson, “Corruption is Stalling Ukraine’s Optimistic Revolution,” Europe Newsweek, 14 February 2016.

[70] Ibid.

[71] “Dear Friends: Corruption in Ukraine,” The Economist, 13 February 2016, http://www.economist.com/node/216929/print.

[72] Ibid.

[73] Wilson, “Corruption is Stalling.”

[74] Ibid.

[75] Chris Miller, “Corruption Threatens Ukraine’s Hard-Earned Freedom,” YaleGlobal ONLINE, 14 March 2016, http://yaleglobal.yale.edu/print/10343; “Yevropeitsi chekaiut’ na Ukrainu v YeS pislia real’noi borot’by z koruptsiieiu ta oliharkhamy—opytuvannia,” Dzerkalo tyzhnia, 25 June 2015; “Borot’ba z koruptsiieiu ye kliuchovoiu dlia doviry mizhnarodnykh partneriv do Ukrainy—Moherini,” Den’, 9 November 2015, http://www.day.kiev.ua/uk/news/091115-borotba-z-korupciyeyu-ye-klyuchovoyu-dlya-doviry-mizhnarodnyh-partneriv-do-ukrayiny; Alla Dubrovyk, “Antykoruptsiini reform v Ukraini—kliuchovi,” Den’, 10 November 2015, http://www.day.kiev.ua/uk/article/podrobnyci/antykorupciyni-reformy-v-ukrayini-klyuchovi; “Merkel’: ‘Ukraina maie borotysia z koruptsiieiu i zmenshyty vplyv oliharkhiv,’” Vysokyi zamok, 17 October 2015; and “YeS zaklykav Ukrainu do borot’by z koruptsiieiu,” Den’, 12 February 2016.

[76] Vitalii Kniazhyns’kyi, “’Zatsikavleni’ ta ‘smotriashchi’,” Den’, 23 March 2016, http://www.day.kiev.ua/uk/print/529535.

[77] Stanislav Markus, Property, Predation, and Protection: Piranha Capitalism in Russia and Ukraine (New York: Cambridge University Press, 2015), 168 for the quotation, and chap. 6 more generally.

[78] Volodymyr Lanovyi, “Yak reformuvaty koruptsiinyi lad,” Ekonomichna pravda, 23 October 2014, http://www.epravda.com.ua/publications/2014/10/23/499475.

[79] Ibid.

[80] Anders Åslund, “Ukraine Can Beat Its Political Corruption,” Atlantic Council, 19 October 2015, http://www.atlanticcoucil.org/blogs/new-atlanticist/.

[81] Ibid. For details, see “Verkhovna Rada vvela derzhfinansuvannia politychnykh patii,” Den’, 8 October 2015, http://www.day.kiev.ua/uk/print/501226; “VR zaprovadyla derzhavne finansuvannia partii i yikhniu zvitnist’,” Ukrains’ka pravda, 8 October 2015, http://www.pravda.com.ua/news/2015/10/8/7084187/; and “Rada pryiniala zakon pro finansuvannia partii z derzhbiudzhetu,” UNIAN, 8 October 2015, http://www.unian.ua/politics/.

[82] Åslund, “Ukraine Can Beat Its Political Corruption.”

[83] Ibid.

[84] Ibid.

[85] “First-Ever IRI Ukraine National Municipal Poll: Ukrainians Deeply Concerned Over Corruption; Remain Committed to Europe and Democracy,” IRI, International Republican Institute, 19 May 2015. “Nationwide,” in a survey of 22 oblast capitals involving 17,000 respondents, “87 percent of Ukrainians surveyed said corruption was a significant or somewhat significant problem for their city.”

[86] “Poroshenko vetuvav dozvil hromadianam ‘poliuvaty’ na koruptsioneriv,” Vysokyi zamok, 24 June 2015.

[87] “VR ukhvalyla novyi zakon pro derzhavnu sluzhbu,” Den’, 10 December 2015, http://www.day.kiev.ua/ul/news/101215-vr-uhvalyla-novyy-zakon-pro-derzhavnu-sluzhbu.

[88] On bureaucracy, see Fukuyama, Political Order and Political Decay, chap. 3.

[89] Ben Aris, “The Jaresko manifesto for Ukraine,” bne Intellinews, 23 March 2016, http://www.intellinews.com/the-jaresko-manifesto-for-ukraine-93474/.

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