Why We Shouldn’t Be Overly Concerned About Corruption in the Reconstruction of Ukraine

Though the war in Ukraine continues to rage, scholars and policymakers around the world have already begun to look ahead to what it will take to help rebuild the country—a project that the Ukrainian government estimates will cost upwards of $750 billion, and which will likely entail substantial international assistance from a broad coalition of countries. Any project of this magnitude—one that involves large government contracts for construction, supplies, and other services—raises concerns about corruption. Indeed, concerns about the potential for widespread corruption in the reconstruction of Ukraine have already been voiced on this blog and elsewhere (see, for example, here, and here). But while this concern should be taken seriously, it should not be exaggerated. There are at least three reasons why the potential for corruption in the Ukrainian reconstruction process, while real, may not be nearly as severe as some of the current pessimistic commentary suggests:

  • First, the baseline level of corruption in pre-invasion Ukraine was likely overstated. True, familiar metrics like Transparency International’s Corruption Perceptions Index (CPI) suggest that corruption is pervasive in Ukraine: The most recent CPI gives Ukraine 32 points out of 100 (where a lower score indicates more perceived corruption); this score is only three points better than Russia and 9 points worse than Belarus. But this is misleading. As the CPI’s name makes clear, the index measures only the perception of corruption. And as a recent CSIS report explains, while Ukraine has historically struggled with oligarchs’ influence over politics (a carryover from its past connection to Russia), understaffing of anticorruption bodies, and corruption in the judiciary (addressed further below), perceptions of corruption are not necessarily an objective reflection of actual corruption levels, which are likely overstated in Ukraine. Indeed, it is paradoxically Ukraine’s recent progress against corruption that has likely worsened the perception of corruption in the country. As an important example, the rejection of corrupt president Viktor Yanukovych and public embrace of governance and rule of law reforms during and after the 2014 Maidan Revolution signaled to those outside the country that Ukraine suffers from high levels of corruption.
  • Second, not only do measures like the CPI tend to overstate the baseline level of corruption in Ukraine, but they do not adequately reflect the significant strides Ukraine has made with its more recent anticorruption efforts, including several that have taken place after Russia’s February 2022 invasion. In July, Ukraine appointed Oleksander Klymenko chief of the Special Anticorruption Prosecutors Office (SAPO), which has already revived several corruption and embezzlement investigations that had been stalled for years. According to Reuters, under Klymenko’s leadership, SAPO had launched 44 new investigations and gotten 25 convictions by the end of 2022. Ukraine also closed the Kyiv Administrative District Court, known as the most corrupt court in the country; that court previously had jurisdiction over government bodies in Kyiv, which gave it immense power. These more recent developments build on a string of important reforms stretching back to the 2014 Maidan Revolution, including the creation of five anticorruption bodies: SAPO, which prosecutes complex corruption cases; the National Anticorruption Bureau (NABU), which investigates corruption cases; the High Anti-Corruption Court (HACC), which tries corruption cases investigated by NABU and prosecuted by SAPO; the National Agency on Corruption Prevention (NACP), which administers state officials’ asset declarations; and the Asset Recovery and Management Agency (ARMA), which tracks, seizes, and repatriates stolen state assets. Also crucial, especially given the volume of future construction and procurement contracts central to the rebuilding of Ukraine, is the country’s internationally award-winning public electronic procurement platform Prozorro, created in 2016, that places full transparency and competition at the heart of the government procurement process.
  • Third, backsliding on Ukraine’s recent anticorruption progress is unlikely—and further progress is expected—in light of Ukraine’s long-term interest in joining the EU and continuing to receive support from other international bodies. As the German Marshall Fund states, eventual Ukrainian EU membership is “overwhelmingly supported by the Ukrainian people,” and the “prospect of membership is a powerful incentive to fix chronic problems like corruption[,] … weak governance, and rule of law.” EU accession requires compliance with the “Copenhagen Criteria,” which include having stable institutions guaranteeing democracy and rule of law. Membership in and support from other venerable international bodies and institutions is also a strong incentive to continue to institute reforms. For example, Ukraine hopes the IMF will institute a new lending program in Q1 2023, and Ukraine’s interest in securing IMF assistance has in the past served as an impetus for significant governance reforms. Scholars and policymakers suggest IMF loans can be made conditional on satisfying the Copenhagen Criteria, including judicial reform and fully staffing the leadership ranks of domestic anticorruption bodies. Ukraine’s progress in anticorruption reform is therefore likely to continue.

All that said, Ukraine’s anticorruption efforts are far from complete. There remain lingering concerns about reform of its Constitutional Court, which is the only mechanism to limit political power in Ukraine and which triggered a crisis in 2020 when it declared some components of Ukraine’s anticorruption laws unconstitutional. Additionally, there is the risk that anticorruption efforts become of secondary concern in the face of imminent wartime threats. Despite this, Western governments should be bullish that anticorruption efforts in Ukraine will continue to trend in the right direction. International donors looking to support Ukraine’s reconstruction can also take additional steps on their end to address concerns about corruption when creating aid packages in their legislatures, such as designating an Inspector General for Reconstruction, as the United States did with its Special Inspector General for Afghanistan Reconstruction (SIGAR), as a condition for aid. Though Ukraine’s anticorruption efforts could use further improvement, this should not dissuade nations from embarking upon a “reverse Marshall Plan” for a country seeking to distance itself from Russia in nearly every respect—not least from its legacy of corruption.

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