Monday, September 15, 2014

Reform priorities: expert survey results

By the Editorial Board of VoxUkraine

After many years of mismanagement, Ukraine badly needs reforms in nearly all areas. A key question is where to start and how to set priorities. In the first week of September, VoxUkraine conducted a survey among Ukrainian and international economists asking them to rank political and economic reform priorities for Ukraine and comment on their choice. 30 responses were received. Given the challenges currently faced by Ukraine, the majority of professional economists suggest to follow an integral approach to ensure complementarily of reforms and hence to improve outcomes. Survey results identify five clusters of most urgent reforms.

  1. Anti-corruption reform and broader reform of judiciary system. Anti-corruption reform was mentioned the most frequently in the list of the reform priorities and got the highest score. Majority of experts agree that as corruption is pervasive in all spheres, its elimination would provide boost for the economy, ensure better provision of public services and create foundation for efficient implementation of other reforms. Many experts noted that anti-corruption reform is a subset of broader reform of judiciary system, which was ranked #2 in the list of priorities. Also, lustration (ranked #6) and the reform of law enforcement prosecution agencies (ranked #7) should be components of the same cluster of reforms aimed at strengthening the rule of law in Ukraine.
  2.  Reforms of armed forces and defense. Russian aggression against Ukraine dictated overwhelming priority of changes in the sphere of defense and security. Reforms of the armed forces and defense industry were ranked #3 closely followed by the need to develop new defense doctrine and national security strategy (ranked #5) and reform security, intelligence and border service (ranked #8).
  3. Energy independence. The third cluster of reforms concerns energy and is also closely associated with the Russian aggressions. The cease of gas supply from Russia and high risk of cutoffs in the supply of other energy materials from Russia put the issue of energy independence among most urgent reforms. Experts commented that the implementation of energy independence could be considered as a component of a wider energy reform (ranked #10).
  4. Stimulus for business: deregulation and tax reform. Deregulation (ranked #9), tax reform (ranked #10) and programs for small and medium business development (ranked #12) constitute the next cluster of reforms aimed at boosting private entrepreneurship and thus providing people with opportunities to take care of themselves instead of relying on the state support. Deregulation is also considered as a ‘low-hanging reform fruit’ allowing business to counterbalance destabilizing economic factors.
  5. Reform of public service. Public service reform and reform and reorganization of state agencies (both ranked #13) conclude the list of top-5 reform priority clusters for the country. Similar to anti-corruption and judiciary reforms, the public service reform is considered to be the prerequisite for successful and smooth implementation of other reforms, ensuring that the changes are not sabotaged or reversed.
Among other reforms mentioned among top priorities by some experts were land reform considered to be at the quite high level of readiness for adoption and allowing opening up of agricultural potential of the country; reform of state financial control and stabilization the state budget; programs to attract investments and to stimulate exports, and reform of financial sector. The list is long, but there is a clear consensus on what the government should focus on.


  1. Thanks for the list, quite enlightening. Just a few thoughts on the above.

    I wonder how the list would change if ideas for specific measures within each area are given and then ranked by ease of their implementation=likelihood of resistance of the key players.

    For example, anti-corruption and in particular the judicial reform is clearly the top priority. It is far from obvious, though, what should be done to achieve any tangible result, and what resources are needed – both in terms of human capital, money, etc. Most important, are there incentives of the people on whom adaptation and implementation of the reform depends, for making sure it is successful? And who specifically has incentives to resist the reform? To summarize, if it is important but unlikely to be implemented, should the focus be on something else?

    For example, de-regulation, no.9 in the list of the priorities, has direct bearing not only on ease of doing business in Ukraine but also on the level of corruption, no.1. And, if properly targeted to the area where the least resistance is expected, it may have a relatively large impact with relatively little effort invested. Should it then move up the list of the priorities, as compared for example to the judicial reform? Or maybe not?

    Any chance future posts would address any of that?


  2. Zoya, from my experience of doing research on various matters, most policy recommendations come back to the issue of corruption and flawed judicial system. Once those are remedied, many issues will be resolved automatically. We have great laws, we need to make sure that there is a way to enforce them. I put the reform of health care system lower on the list although this is also a matter of national security, exactly because effective anticorruption laws and honest judicial system will change many things in this sphere as well. For the better.

    Olena Nizalova.

    P.S. What is wrong with the registration here? I have tried the google account and my post disappeared. Noticed other people signing in the same way. Can anyone help on this? Do not want to be anonymous.

  3. Thank you, Olena, I take your point, and I fully agree that saving the problems with judicial system and corruption will bust the system in all areas. My question is whether drastic improvement in these areas now, in Ukraine, is achievable in the short run, and what is needed for this? And if it is not easily achievable, that why should it be a priority for the reform? Maybe there are other areas, where relatively low input will result in higher positive impact? I do not know, I am thinking aloud.

    I am not in academia, and unfortunately am not familiar with the research on what approaches to the judicial reform, what specific measures have been used in other countries, and how successful there were. I do understand that there is wider a research on fighting the corruption, which would be directly applicable for Ukraine. From my outlook as a legal practitioner, though, I am a bit skeptical about judicial reform – developing it and then adopting and implementing seems to be a very tough call.

    I had talked with a number of litigators asking them what, in their opinion, would be a list of measures to be taken to drastically improve judicial system? As the most realistic and helpful they named simple technical measures, such as automatic allocation of cases among judges, prohibition of the same person to be the head of the court, etc. The impact would be limited, but tangible, and the measure could fly as the resistance will probably be limited. Other, more drastic measures which were under discussion were viewed with much higher skepticism. Of course, maybe there are the right approaches, we may be simple unaware of them.

    As for fighting the corruption, I believe very strongly that de-regulation should be seen as primarily an anti-corruption measure, rather than something that would simply help the economy and business by cutting the transactional costs.

  4. На мой взгляд, распространенное заблуждение, будто в Украине коррупция. Коррупция - это повреждение в целом здорового тела. А в Украине такой образ жизни ("Мы матом не ругаемся, мы им разговариваем" :) ). Ее невозможно устранить какими-то антикоррупционными мероприятиями. Реформа госслужбы, децентрализация и дерегуляция - 3 реформы, которые изменят этот образ жизни. После этого, возможно, появится коррупция :)