Ukraine Needs Decentralization, Done Right

Ukrainian policy makers must resist a knee-jerk rejection of decentralization in this environment.

Since independence in 1991, Ukraine has done little to reform the style of governance created during Soviet rule. New constitutional amendments by President Poroshenko offer the chance to change that. However fears that decentralization will serve big business and separatists in the east mean some in Ukraine want to stall the process. This would be wrong. It is urgent that decentralization proceed in a careful, transparent, and participatory way.

A new Ukraine cannot develop within the old dictatorial system. Then as now the real decision-making power resided in the capital; governance at the local level was a façade for a rigidly centralized system. Instead the government should sequence reform, spell out the devolution of decision making and fiscal authority, and engage the public in discussion on and implementation of these changes.

Today, the public can’t expect local government to address its concerns after years of neglectful centralized governance. After the disastrous presidency of Viktor Yanukovych led to the Revolution of Dignity in early 2014, President Poroshenko introduced a set of constitutional amendments to promote decentralization and re-align the balance of power between parliament, president, and cabinet of ministers. This needs rethinking.

The amendments are a positive step. However, Ukrainian policy experts, including the Center for Political and Legal Reform, are alarmed at the proposal that the decentralization process take place all at once instead of through a more incremental process. President Poroshenko’s commitment to moving decentralization into actual policymaking is welcome, but both internal and external risks need to be considered before launching the process full-scale.

It’s not clear whether the public at large is ready to participate in this effort. On the one hand, the paternalist sentiment—which favors a more centralized approach to governance—runs high, especially in volatile eastern regions. In a poll [PDF] last year, 68 percent of residents there said the state should provide everything for the public well-being. On the other hand, the Euromaidan and the volunteer support to the Ukrainian military during the war with Russia both illustrate an amazing capacity for self-organization. To avoid the risk of low participation in decentralized decision making, it is essential to engage the public in discussing and eventually implementing reform.

Big business is also demanding decentralization in Ukraine. There is a risk that in certain regions private interests with little concern for public good may use the reform to usurp local governance since local communities would at first have little capacity to challenge them. So Ukraine also needs to build better separation between government and big business. Changing the legislation on party financing to decrease the dependence of legislators at all levels on big businesses would help.

The current presidential draft envisions immediate decentralization at all levels, creating a danger of local communities suffocated by their stronger regional counterparts. To minimize this risk, a sequenced implementation of the reform is needed. At first, decentralization would occur in local and district communities. After one election cycle, similar reforms would be introduced at the higher, regional level. Capable regional self-governance depends on capable local self-governance. Without correct sequencing, regional self-governance driven by narrow interest groups could stoke irredentist sentiments.

Russia has portrayed the war with Ukraine as an internal conflict with some regions fighting for more autonomy from the center. Russia’s suggestions for resolving the conflict have evolved from the complete “federalization” of Ukraine including quasi-state entities empowered to conduct their own foreign policy, to “decentralization” where one region would block Ukraine’s European aspirations.

These ideas have nothing in common with true federalism or decentralization, where foreign policy is made at the national level. As the latest ceasefire talks show, calls for decentralization by separatists in eastern Ukraine are in fact asking for a situation where the national government would deal with rebuilding the east while that region could veto political decisions that enable the whole country to move toward democratic and open society.

On September 16, 2014, the Ukrainian parliament adopted a law on special self-governance procedures for the territories controlled by the separatists in the east. Many worry that Russia will now use the legislation as an example of decentralization to fuel centrifugal tendencies and advance its foreign policy agenda in Ukraine. The continued economic collapse has strengthened the argument that the country needs a strong national government to pull the state out of crisis.

Ukrainian policy makers must resist a knee-jerk rejection of decentralization in this environment. Done correctly, decentralization can signal a new, truly democratic beginning for Ukraine. Far from being a political albatross, decentralization will serve a catalyst for wider political reform and truly honor the sacrifices at the Maidan for proper self-rule.

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