Why does the fight against corruption is happening so slowly in Ukraine?

Oksana Huss and Oleksandra Keudel, lecturers at the Master’s in Public Policy and Governance program at Kyiv School of Economics, explained to us that there are several forms of corruption and that results vary with respect to each type.

What is corruption?

 

The law states that corruption is the abuse of power for personal gains. However this definition is too narrow and it poses a problem.

Scholars examine corruption on two levels. On individual level it may be considered a moral problem of a particular person acting in bad faith. However, the situation in Ukraine after the lustration process shows that the removal from office of particular individuals does not solve everything. This implies that this phenomenon has deeper roots and should be regarded as a system, describing social structure and the ways one may access common goods. The idea is that in some societies, the access to important resources (economic, political, natural) belongs to a limited circle of people, who tend to have the potential to take those resources by force. At some moment they decide that it is not profitable to fight each other and decide to make a deal and establish special rules, effective only within their circle, inaccessible for other members of the society. In Ukraine it is associated with the influence of the oligarchs and politicians, who are de-facto involved in doing business and are interested in personal enrichment instead of being impartial in the allocation of resources of the society.

  

 

How to distinguish corruption from non-corruption?

 

There are three distinct characteristics of corruption. The first is that the people, involved in corruption, have the political power and the right to distribute common resources. The second is that such power is used for personal gains. The third being that there is a significant damage for the society.

 

How does the typical corruption looks like?

 

Money and bribes represent the lowest level of corruption. Conversely, systemic corruption takes place at a higher level in the form of deals, that exchange the positions, that “control flows”, namely providing the ability to collect corrupt rent without taking bribes. In such a system only “insiders” may hold the offices, that allow to take kickbacks.

 

How does corruption inflict losses?

 

Corruption reduces competition because licenses, access to markets and tenders are given to “friends” instead of the most effective companies. Consequently, entrepreneurs realize that it is more important to  invest into building relationships with “useful” people, instead of developing innovations and products. This affects not only the budget (through higher prices), but also customers (through lower quality of goods and services). Last year, the Institute for economic development and political consultation calculated that in 2014-2018  the economic gains from open data and anti-corruption actions in governmental purchases (ProZorro), taxation administration and gas market constituted $6 billion annually – roughly 6% of Ukrainian GDP.

 

It is often said that Ukrainian economy does not develop due to corruption. Is it true?

 

It is hard to tell whether the economy does not develop because of corruption or vice-versa – the widespread corruption developed as a response to the economic crisis of the 90s, when existing institutions ceased to work, while the new ones still were not formed yet. However, the effects of a reasonable policy to fight corruption are hard to deny.

 

Are there any benefits from corruption?

 

You may say so. In the 20th century a functional approach to corruption was quite popular. At that times researchers stated, that corrupt practices fostered the growth of Asian nations. During that period they  did not have an established high-quality legal system, so corruption established specific rules of societal existence and helped to understand how the state works. However, in the long run corruption brings more damage, than benefits.

 

May individuals benefit from corruption?

 

Yes, but those benefits are quite ephemeral. For example when many people apply for  international passports, it creates a long line of applicants. Some people may want to sped their application and resort to giving a bribe in order to skip the line. However, those who observe this example, act similarly and try to pay to be among the first ones. When everyone does so, they once again form a long line, even though now they pay extra money.

 

What are the existing practices to fight corruption?

 

After it is established, which is the prevailing type of corruption in the society, the instruments to fight it may be chosen.
When it is possible to link corruption to the individual’s behavior (this will work in the states, where such acts are rather exceptional), the best methods to curb it include increasing transparency to see breaches of law and the following punishment.

However, societies with systemic corruption are usually characterized with the existing problem with justice system. Therefore corruption may be visible, but does not followed by punishment. In such case it is necessary to establish independent institutions to fight corruption and to ensure that they have sufficient powers. Indirect methods to fight corruption may also be used – including actions, that provide access to the distribution of the resources of society. This means, in particular, creating political parties, that really represent the interests of different groups within society, instead of representing those of oligarchs.

It is important to pay attention to the local opportunities, which are now developing rapidly through decentralization, namely those providing the means for citizens to influence the distribution of resources. As a rule, there is information about both local initiatives and budget participation on  the websites of towns and united territorial communities. People should cooperate with those having similar priorities and interests in order to promote their goals and influence local politics via transparent and honest methods.

 

Who is the main driver of the fight against corruption in Ukraine?

 

After the Revolution of dignity there exists a nominal triangle in anti-corruption activities.

The active representatives of society deliver information to international organizations because of the fact that the government has a vested interest in preserving the existing status quo and does not react to the complaints of civil society. At the same time, the European Union deems it desirable to have peaceful and strong neighbors to form stable trade relations with. Corruption is an obstacle to such plans. Therefore donor organizations, located in the EU pose a condition for the Ukrainian government – the fight against corruption in exchange for financial help.

Due to the fact, that the Ukrainian government is interested in a stable economic situation and theirs reelection, they comply with such requirements. It should be appreciated, because in the countries, where there is no political competition, politicians may ignore such conditions, because there is no possibility of them not being reelected. Therefore, the triangle consists of activists, international organizations and Ukrainian authorities. It severely lacks small and medium-sized businesses – the middle class, that has the resources to influence politicians and has an interest to protect its businesses.

 

Is the fight against corruption in Ukraine happening at a slow pace or not?

 

It depends on the type of corruption. When limiting it to individuals, one should look whether new anti-corruption institutions are established in order to enable the punishment of corrupt officials. This happed quite quickly in Ukraine.

 

On the other hand, when looking at corruption as a problem of limited access to resource distribution, the progress with regard to it is happening at quite a slow pace. This is happening because in order for changes in the way society understand these processes, there must be established a functioning alternative political system without corruption. This is a lasting process of collective learning.

 

Politicians often talk about fight against corruption. Why is it so popular?

 

According to polls, Ukrainians consider corruption to be one of the most important problems in the state, which makes this theme easy to manipulate. Manifesting fight against corruption allows a politician to present him/herself positively and their competitor – negatively. However, it is important to stress the fact, that those talks are usually general and lacking proposals of specific steps to be taken. Realistically, in order to fight corruption there must happen a judicial system reform, for it is politicized now. This means that punishment is happening only with respect to chosen political opponents. Given such conditions even anti-corruption measures may become an instrument of political struggle.

 

Speaking of the role of the government in the fight against corruption, is there a model we should take as an example?

 

There is a successful Scandinavian model, where corporatism is prevalent. There, different groups of the population lobby their interests and politicians subsequently distribute the resources accordingly to people’s needs. It is essential to maintain the independence of anti-corruption bodies lest they become an instrument of political struggle.

 

Is the worldwide level of corruption declining?

 

It is difficult to measure because corrupt actions happen behind closed doors. Usually, levels of corruption are measured with the help of indices like the Index of corruption perception by Transparency International. At the same time, it is important to realize that different creators of indices have different understandings of the term “corruption”. Some report the level of political corruption, some focus on corruption in administrative bodies, some are experts on everyday corruption. If most experts mean a specific type of corruption and do not monitor others, the index may be distorted and does not represent the real situation.

 

Can society estimate the level of corruption in the country?

 

The perception of corruption is highly influenced by the media. In some authoritarian states like United Arab Emirates, the level of corruption is lower than in some democratic states, according to indices. The reason is that censorship does not allow the media to write about corruption, which creates a feeling that when you personally encounter it, it feels exclusive. In democratic societies, corruption is widely talked about, which makes it appear like that it is everywhere.

 

How does perception of corruption influence corruption?

 

When the media extensively tell that everything is corrupt, people stop fighting corruption. This creates a problem of the collective action – if a person realizes that everyone behaves in a particular fashion, it becomes more risky for him/her to go against the current. In such a case, participation in corrupt schemes is rather a rational step than a moral dilemma.

 

So the media should impose self-censorship?

 

The problem of corruption should not be silenced. However, in addition to talks about the damage  from corruption, positive examples should also be spoken about: honest officials and judges, success cases of eliminating corruption through eased regulation or the increased transparency, punishment of corrupt individuals. We are not speaking about propaganda or manipulations. We should keep in mind that the media usually focuses on the negative side. They should take a more conscious stance and start balancing information to create a more representative image.

 

Is the level of corruption in the country an important factor when deciding whether to invest thereto?

 

Foreign investors name corruption one of the main reasons they fear investing in Ukraine. Due to corruption it is hard for them to foresee the development of their business because they do not know how to “play by the rules” here. This usually pertains to medium-sized business and not to transnational corporations, that have strong lawyers and tax consultants.

 

What are the anti-corruption bodies functioning in Ukraine?

 

The system of anti-corruption bodies consists of NAPC (National Agency for Prevention of Corruption), SAP (Specialized Anti-corruption Prosecutor’s Office), NABU (National Anti-corruption Bureau of Ukraine) and Anti-corruption Court (it is still being established, because the parliament has only recently decided on which cases will actually be transmitted thereto). There is also NIB (National Investigations Bureau), which is intended to become the Ukrainian counterpart of FBI and to investigate corruption in the security bodies. In addition there are several institutions, established as the means of indirect fight against corruption, namely the system for electronic purchases ProZorro, the portal for open government’s data e-data.gov.ua and local portals for open data on the level of region, town, UTCs and the abilities to monitor the actions of local deputies through visiting sessions, inquiries or watching sessions online. It is also possible to prepare public expertise on the decisions and programs of the local authorities.

 

What are their main activities?

 

The main goal of the NAPC is to prevent corruption among government agents and to monitor the transparency of financing the political parties. In particular, this agency examines the electronic declarations of officials and, ideally, should notify their doubtful wealth. NABU is engaged in the investigations of the corruption on the highest level – among the top officials, deputies, heads of regional administration, prosecutors etc. NABU transmits its cases to the Anti-corruption Court. The SAP should oversee NABU’s investigations and act as prosecutors at courts, but during the last years their cooperation was quite challenging.

 

Is it possible to contact them directly?

 

One may address NABU by filing a request or proposal on their website https://nabu.gov.ua/zvernennya-gromadyan or directly via their box for appeals, located at their office (near the entrance). One may also write them a letter. NIB and NAPC also have official websites with their contacts https://dbr.gov.ua/kontakti and https://nazk.gov.ua/uk/departament-organizatsiyi-roboty-iz-zapobigannya-ta-vyyavlennya-koruptsiyi/kontakty/. Most of those bodies also have Facebook pages. Officially, they may be addressed through citizens’ appeals (Law of Ukraine on Citizens’ Appeals and Law of Ukraine on Information). The local councils and administrations may be easily accessed through contacts on their websites, by visiting public hearings or, when having specific proposals,  via local initiatives or petitions (this is more formal and requires their official reaction). With regard to local level, it is advisable to consult the Handbook of public activist by UCIPR http://dovidnyk.org.ua/421-buklet-instrumenty-vplyvu-hromadian-na-mistsevu-vladu-prezentovano.

 

Translation is done by Yuliia Vozniak, EA`21 student.