Western Anticorruption Policy in Ukraine: Success or Failure?

A few weeks back, I came across an interesting point-counterpoint on the impact of Western-backed efforts to promote anticorruption reform in Ukraine. On one side we have an online piece in Foreign Affairs by Adrian Karatnycky (the Managing Partner of a consulting firm that “works with investors and corporations seeking entry into the complex but lucrative emerging markets of Ukraine and Eastern Europe”) and Alexander Motyl (Professor of Political Science at Rutgers University) entitled, “How Western Anticorruption Policy Is Failing Ukraine.” And then on the other side we have a response piece on the Atlantic Council blog from Daria Kaleniuk (Executive Director of the Anti-Corruption Action Centre in Kyiv) entitled “Actually, the West’s Anticorruption Policy Is Spot on.” I’m no Ukraine expert, and so I’m reluctant to take a strong position on which side has the better of the argument, but I found the debate interesting not only for its implications for Ukraine, but also because it raises a couple of more general issues that come up in many other contexts, issues that anticorruption advocates should pay attention to even if they have no particular interest in Ukraine. Those issues are, first, a question of messaging—what I’ll call the glass-half-full/glass-half-empty question—and, second, the relative importance of holding individual wrongdoers personally (and criminally) accountable for corrupt conduct.

Let me first try to give a flavor of the debate, and then say a bit about each of those two issues.

Mr. Karatnycky and Professor Motyl start out by acknowledging that so far Western donors’ efforts to pressure Ukraine to undertake significant anticorruption reforms have yielded substantial progress, including major and successful reforms to the gas pricing system, the tax system, public procurement, the banking sector, management of state-owned enterprises, and other areas. “By any objective measure of change,” they write, “Ukraine’s efforts to reduce corruption”—which, the authors note, resulted largely from Western pressure—“have achieved more positive change in the last four years than in the two decades preceding them.”

So what’s the problem? Why, if Western-backed reform efforts have “saved as much as $6 billion in annual losses to the state,” didn’t Karatnycky and Motyl title their piece, “How Western Anticorruption Policy is Succeeding in Ukraine”? They give two related answers:

  • First, Karatnycky and Motyl complain that Western policymakers refuse to acknowledge how successful Ukraine’s reforms have been, and in so doing they contribute to a general sense of pessimism and frustration among the Ukrainian public—a frustration that may undermine support for President Poroshenko’s admittedly flawed reformist government and increase the attractiveness of more radical political elements. As they put it, the Western-supported anticorruption campaign in Ukraine is “diminish[ing] public appreciation for the real gains that had been made and dragg[ing] down support for those in power, including Poroshenko.” This, in turn, contributes to “three worrying trends: political fragmentation…; the strength of populist movements; and the absence of a serious liberal alternative.”
  • Second, in addition to (and contributing to) the overuse of the rhetoric of failure when characterizing Ukraine’s anticorruption reform efforts to date, Western governments and donors have, according to Karatnycky and Motyl, over-emphasized personal liability (especially criminal liability) of individual wrongdoers, at the expense of reforms to institutions. As they put the point succinctly, “The root cause of the failure of the West’s anticorruption effort is … the flawed belief that the key to change was individual politicians and not institutions.” A corollary, the authors continue, is that “Western anticorruption policies in Ukraine are failing because they have focused on creating and empowering adversarial structures rather than creating cooperative relationships with the state.” Therefore, Karatnycky and Motyl conclude, Western governments and donors interested in advancing the cause of anticorruption in Ukraine should pivot away from a focus on institutions meant to hold individual high-level politicians criminally liable for corruption, and should instead push for “reduction of the scope for rent seeking and other corrupt schemes” through extensive privatization, de-monopolization, and creation of independent regulatory bodies. To the extent that the West focuses on law enforcement institutions, Karatnycky and Motyl assert that the focus should be on internal capacity-building and greater monitoring of the enforcement agencies themselves.

Ms. Kaleniuk will have none of it. She agrees that Western-backed anticorruption reform efforts have achieved significant results, and emphasizes that “these reforms were possibly only because the IMF, EU, and other foreign partners demanded them.” But, while Karatnycky and Motyl think that the more recent focus on establishing more effective law enforcement bodies—such as the National Anti-Corruption Bureau (NABU), the Specialized Anti-Corruption Prosecutors Office, National Agency on Corruption Prevention, and the yet-to-be-established Special Anti-Corruption Court—is a mistake, Ms. Kaleniuk contends that Ukraine’s anticorruption reforms “can only be sustainable, irreversible, and effective if there is a well functioning punitive mechanism,” and so on this front “the West needs to dig in and push even harder.” In particular, while Karatnycky and Motyl suggest that NABU and the Special Prosecutors Office have not been terribly effective, Ms. Kaleniuk points out that in fact their track record in investigating and indicting even high-level officials is quite strong—but that the cases founder because of the ineffective, inefficient, and possibly corrupt judicial system. Given this, the Ukrainian public’s frustration and cynicism is understandable: As Ms. Kaleniuk puts it, “As a result of [anticorruption and transparency reforms], millions of Ukrainians know which senior officials steak from the state and how, but they don’t understand why no one is behind bars. Of course, this leads to massive frustration and deep distrust of the state.”

Because she thinks that judicial reform is the key to addressing this problem, Ms. Kaleniuk devotes much of her piece to emphasizing the need for the Special Anti-Corruption Court, with foreign participation in judicial selection. But while this is an interesting and important issue (one we’ve touched on in prior blog posts—see here, here, and here), in the remainder of this post I want to consider the two more general issues I flagged at the beginning: first, whether it’s sensible (in Ukraine or more generally) for anticorruption reformers in a country suffering from endemic corruption to emphasize efforts to hold individual high-level wrongdoers accountable; and, second, how to frame the messaging around anticorruption reform efforts—in particular, how much emphasis should be placed on the progress that’s been made, and how much emphasis should be placed on the problems that remain.

  • On the issue of individual accountability, I confess that while I must include the caveat that I don’t know much about Ukraine, I found Ms. Kaleniuk’s argument much more convincing. I don’t think anyone would disagree with Karatnycky and Motyl that structural institutional reforms that reduce the opportunities for corruption are essential (though some might take issue with some of their prescriptions, such as mass privatization). But the claim that such institutional reforms can be successful without also employing the “big stick”—a real threat that breaking the law will result in serious punishment—strikes me as not consistent with the evidence. Those countries that have done a tolerably good job of getting corruption under control have generally not relied only on effective investigation, prosecution, and punishment, but that’s certainly been part of the recipe. I can’t think of any countries that have made significant progress against corruption without establishing effective mechanisms to hold wrongdoers, including powerful individuals, accountable. (Of course, in some countries—China springs to mind—the most senior leaders may not be subjected to any real legal accountability, but that’s different from saying that institutions that can take down individual high-level politicians aren’t vital.) Moreover, while Karatnycky and Motyl assert that “systemic reform is always a complex process highly dependent on changing structural relationships and institutional practices and not on changing the personalities that head them,” it’s not clear that this assertion—at least the last clause—is actually true, despite the superficially sophisticated phrasing. Of course changes to “structural relationships and institutional practices” matter—but there’s also a fair bit of evidence that individual leaders can make a huge difference. In fact, quite a few (though certainly not all) of the leading examples of successful (or at least promising) anticorruption reform efforts have been highly dependent on individual leaders: Think Lee Kwan Yew in Singapore, Mikheil Saakashvili in Georgia, Xi Jinping in China, John Magufuli in Tanzania, and others. But that’s actually a side point: Those, like Ms. Kaleniuk, who emphasize the need for effective legal mechanisms to hold individuals accountable aren’t making that argument mainly because they think that simply removing and replacing a handful of officials will make a difference, but rather because eliminating the culture of impunity will systematically change officials’ incentives. Otherwise, institutional reforms—including those along the lines that Karatnycky and Motyl advocate—are likely to be themselves corrupted. On this point, I have to say it struck me as baffling—I’m tempted to say naïve, though I’m reluctant to lock horns on this point with (alleged) regional experts—to advocate mass privatization in the absence of effective mechanisms to punish both powerful government officials and well-connected private actors who engage in acts of high-level corruption. It seems to me that the experience of much of the former Soviet Union—especially Russia—is a textbook illustration of how the privatization of state resources, when combined with a culture of impunity for high-level officials and their cronies—is a recipe for disaster. Now, I don’t know enough to have a strong view on whether the specific reforms being pushed by Western governments or Ukrainian NGOs—such as the specialized anticorruption court—are good ideas or not. But the larger point I want to make here, which has relevance beyond the Ukraine debate, is that while it’s sometimes fashionable to emphasize the (correct) point that an exclusive focus on individual liability, without accompanying institutional reforms, is not enough to achieve genuine progress in the fight against corruption, we shouldn’t forget that the reverse is also true: trying to reform institutions without tackling the culture of impunity is unlikely to produce lasting change.
  • Now, as for the messaging issue, here I think there’s a genuine, deep-rooted problem that the Ukraine debate tees up, but that I don’t think enough people who work in this area have fully appreciated. Here’s what I see as the problem: The fight against corruption is a long slow slog, and for most countries, even countries that have in fact made significant progress, the problem usually remains daunting. Emphasizing the progress that has been made in the fight against corruption—what I’ll call the “glass half full” message—can help undermine the fatalistic narrative that corruption is intractable, thereby inspiring people to have more confidence that change is possible; it may also increase the incentives for governments to undertake serious anticorruption reforms—even reforms that might expose corruption in among their own officials and allies—because they believe they’ll get political credit for their progress. On the other hand, emphasizing the extent of the problem—the “glass half empty” message—may be more effective in getting citizens to focus on the issue and take action. After all, anger and disgust are great motivators, probably better than rational calculation. Given that there may always be pressure to subordinate corruption to other issues, or simply to sweep it under the rug, maintaining a certain level of public outrage at how bad the problem is may be necessary to get citizens and media to focus on the issue, which in turn may be necessary to get politicians to do something about it. Emphasizing the scope of the problem also makes clear to would-be reformers that half-measures aren’t enough, even if they do produce some genuine progress. The challenge, to which I fear I don’t have a good answer to yet, is how anticorruption advocates and activists, as well as influential outsiders, can calibrate the message appropriately, to convey both that significant progress has been made and should be celebrated, but also that the problem remains substantial, such that the government can’t rest on its laurels.

One more issue that I’m somewhat reluctant to bring up, but that I think ought to be noted. The bio of Mr. Karatnycky that appears with the Foreign Affairs piece identifies him only as “a Senior Fellow and Co-Director of the Ukraine in Europe Project of the Atlantic Council.” That’s not wrong, but his day job (which presumably provides most of his income) is, as noted above, Managing Partner of a consulting firm that helps “investors and corporations seeking entry into … Ukraine and Eastern Europe,” and that advertises its “range of relationships in the world of policy, government, and business,” as well as Mr. Karatnycky’s prior working relationship with Ukraine’s “leading policy reformers,” as major assets. To be clear, I do not for the moment mean to cast any aspersions on Mr. Karatnycky’s integrity or to raise doubts about his sincerity. Nonetheless, many readers might feel like they ought to know, when reading a piece that advocates measures like privatization and de-monopolization–measures that would open up many more opportunities for foreign investors–that one of the co-authors (or his clients) might stand to realize substantial financial benefits from such policies. Some readers might also feel like it’s relevant to know that a piece suggesting that it’s a policy mistake to focus on individual liability of certain government officials is co-authored by someone who, in the business context, advertises his close personal relationships with those same officials. Again, this is a bit delicate, because I have no reason to believe that the positions advanced in the Foreign Affairs essay represent anything other than Mr. Karatnycky’s considered views as an expert on Ukraine (though it’s worth noting that Mr. Karatnycky has been criticized in the past for his alleged tendency to cozy up to whomever happens to be in power in Ukraine at the moment). And it may well be that Foreign Affairs, rather than Mr. Karatnycky himself, decided which part of Mr. Karatnycky’s long and impressive CV to list in the byline to his piece. But I do think that when businesspeople, especially consultants who trade on their personal relationships with government and business elites, comment on political affairs in the countries where they work, they should be identified by their primary (business) job, not by a think tank affiliation or other title that they may hold–especially when the topic is corruption. And Mr. Karatnycky has been called out on this issue before, making it even more important to take extra steps to avoid any suggestion, however misguided or unfair, of an attempt to be less than forthright about his potentially relevant business interests.

(Lest I be accused of hypocrisy on this point, I should mention that in March 2017 I was retained by a USAID contractor to travel to Kyiv for three days, mainly to present the findings from a report I co-authored on specialized anticorruption courts, and I was paid a modest consulting fee to do so. I have no ongoing financial or business interests in Ukraine, or any expectation of future contract work related to that country.)

2 thoughts on “Western Anticorruption Policy in Ukraine: Success or Failure?

  1. Matthew the issue is not exactly black and white. Yes Adrian tends to express the Ukrainian diaspora view of Ukraine government is right no matter what and yes the West has been fantastic in supporting anti-corruption. However, the issue is how much can you attack the Government and still work with them to get things done? Is constant opposition to a Government that has done reforms in 4 years than the previous 25 years effective way to achieve more reforms? These are valid points and I see validity in both Mr. Karatnycky position as I do with Ms Kaleniuk’s defense. As a person who followed the Ukrainian anti-corruption events on a daily (and most days hourly) basis I see a worrying trend of having only one narrative being expressed and certainly the personal attacks on Karatnycky on social media for daring to express a different point of view is concerning. What I see going on now is the empowerment of civil society but with little accountability or interest in dialogue on some issues. These concerns are shared by many other political observers in Kyiv who at the moment are largely keeping silent.

    • I don’t think I disagree with anything in your comment. I agree entirely that the issue of messaging–how much to emphasize the progress that’s been made vs. how much to emphasize the problems that remain–is a very difficult challenge, for the reasons I lay out in my second bullet point in the post (which seems generally consistent with the point you make in your comment).

      As for the issues related to Mr. Karatnycky specifically: I certainly did not intend my penultimate paragraph to be a “personal attack” on him for “daring to express a different point of view”, and I hope it did not come off that way. I took pains to emphasize that I had no reason to doubt his sincerity. But I stand by my assertion that, when he or anyone else with similar business interests comments on issues like this, it’s important that the business interests be clearly disclosed. That certainly doesn’t mean his views should be ignored; lots of people with a personal financial stake in a policy issue also have a great deal of expertise on that issue, and their views are not necessarily distorted by their material interests. But such interests do seem like the sort of thing that interested readers ought to know about, and so ought to be disclosed. Failure to do so is not only misleading, but might add fuel to the campaign to the personal attacks.

      In any event, I left that point to the end precisely because I wanted to keep the focus of my criticisms of his position on the substance — especially my disagreement with the claim that pursuing “institutional reform” in the absence of individual accountability would be sufficient.

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