How Can Ukraine’s Government Be Made More Effective?
by Alex Sundakov

There is a general consensus among the Ukrainian government and foreign donors that the existing machinery of government is not capable of designing and implementing the policies needed to achieve the government’s objectives. Recent administrative reforms have generated some improvements, but the government still lacks effective levers to achieve the transition of the Ukrainian economy and society. Moreover, there is increasing concern that administrative reforms to date have not focused on key priorities and have failed to address underlying problems. This is despite considerable donor involvement in the process.

· Leftover Soviet elements, including the definition of the function of government, lack of initiative, day-to-day work habits, and hierarchical relationships.

· Elements of spontaneous adaptation—the kind of change that occurs without deliberate design, forced by changes in external circumstances. For example, whether they like it or not, government agencies have had to adapt to the existence of independent businesses and mass media.

· Finally, change that has been driven by deliberate policy action within the context of intentional administrative reform.

· The government cannot prioritize among strategic issues and is unable to cut through organizational structures and allocate reform responsibilities to specific ministers.

· Decisionmaking lacks open public consultation; government committees follow bureaucratic structures, which creates tension between political advisers to the prime minister and government civil servants.

· The delegation of responsibilities within the government gives too much decisionmaking power to ministers, who at the same time have very little control over policy formulation.

· Policy implementation is still dominated by legalistic decisions; there is no built-in method for civil servants to learn from mistakes and from each other; and time pressure inhibits wider use of experiments and pilot projects.

· Advanced control mechanisms are missing from the public administration, which does not support diagnosis for future strategy design. Instead of planning activities, government units formulate unrealistic "concepts" and political statements.

· It would be able to deal with legitimate conflicts of interest consistently and predictably. Such conflicts would be resolved based on well-understood policy, rather than at the whim of an individual official.

· It would set the rules of the game but would not play the game itself. In particular, the machinery of government would not tilt the playing field in favor of interests associated with officials.

· It would be under constant scrutiny, and would consult and incorporate the views of the civil society.

The key acts of deliberate policy appear to be:

· Reducing the number of ministries.

· Creating new agencies, such as an Antimonopoly Committee, that are explicitly designed for the new policy objectives.

· Recent changes in decisionmaking at the Cabinet of Ministers level, which have highlighted the relative roles of political decisionmakers and civil servants.

· Central European countries had a unifying framework for technical assistance—preparation for EU integration. By contrast, it is difficult to identify a unifying principle for foreign assistance in Ukraine. Donor priorities appear to be more supply driven, and chosen according to political criteria.

· Technical assistance projects in Central Europe appear to be largely built around specific implementation benchmarks required to transform institutions to EU standards. By contrast, technical assistance to Ukraine rarely envisages implementation as the main product of a project. Rather, projects tend to provide advice, on the expectation that the government will take care of implementation once the political will is present.

· Technical assistance projects in Central Europe tend to provide systematic access to information and personnel in the West, integrating officials into international networks. Projects in Ukraine tend to provide one-off training and sporadic access.

· In designing assistance projects, donors should take into account how that assistance will be integrated with government processes, and in some cases should impose conditions on how such processes should be changed before a project can go ahead. A foreign consultant may write an excellent policy paper, but if that advice is not part of the internal policy development process, it will be treated as a piece of academic research and will have little effect.

· In providing advice, donors are often reluctant to engage the civil service, and try to short-circuit the bureaucracy by attaching advisers directly to politicians. But while it may be important for foreign advisers to have the status of advisers to a minister (or prime minister), they will not be effective if they stand outside the established decisionmaking process. The bureaucracy will not go away; it will remain powerful, and the best contribution an adviser can make is influencing its work.

· Foreign advice tends to be focused on what to do (such as what policy to adopt) rather than on how to reach a rational decision. Foreign advisers are paranoid about presenting Ukrainian decisionmakers with alternatives because they fear that a "wrong" alternative will be chosen. Senior officials often express the view that foreign advisers are self-serving. By contrast, successful examples of foreign assistance typically involve a direct effort to improve the work of a particular institution, to set up a new process, or to provide advice within an established process.

· Few donor programs appear to be aimed at "teaching the teachers." For example, many technical assistance programs involve study tours by Ukrainian officials to donor country institutions. But it is rare for such projects to require written reports by the returning officials, or to provide resources for follow-on seminars or the dissemination of collected material. Most Ukrainian officials operate in extreme intellectual isolation and have no Western peer groups. This inevitably means that they fall back on Soviet habits of thought and action. The objective should be to integrate Ukrainian officials with international networks of civil servants and policy advisers.

Alex Sundakov is director of the New Zealand Institute of Economic Research (NZIER). Email address: alexs @nzier.org.nz. This article is based on his recent paper, "Public Sector Reforms in Ukraine: On the Path of Transformation," LGI Discussion Paper 18, 2001.