Comments on Decentralization Reform in

Ukraine

Tymofiy Mylovanov

May 30, 2014

1

Some Background: Conflict in

Ukraine

2

3

The number of protests monthly

October 2009 – December 2013

4

0

200

400

600

800

1000

1200O

ct'0

9

De

c'0

9

Fe

b'1

0

Ap

r'1

0

Jun

'10

Au

g'1

0

Oct

'10

De

c'1

0

Fe

b'1

1

Ap

r'1

1

Jun

'11

Au

g'1

1

Oct

'11

De

c'1

1

Fe

b'1

2

Ap

r'1

2

Jun

'12

Au

g'1

2

Oct

'12

De

c'1

2

Fe

b'1

3

Ap

r'1

3

Jun

'13

Au

g'1

3

Oct

'13

De

c'1

3

4

Protest issues

11

2011 2012 2013

2013 before

Maidan (until

20.11)

2013 after

Maidan (from

21.11)

Socioeconomic 1374 60% 1546 43% 2062 43% 1926 56% 136 10%

Ideological 558 25% 858 24% 1740 36% 871 25% 869 62%

Political 564 25% 1249 34% 1727 36% 924 27% 803 58%

Civic rights 391 17% 617 17% 1644 34% 926 27% 718 52%

2277 3636 4822 3428 1394

5

Regional distribution of protests

7

2010 2011 2012 2013

2013 before

Maidan

(until 20.11)

2013 after

Maidan

(from 21.11)

Centre 389 17% 480 21% 633 17% 929 19% 637 19% 292 21%

Crimea 170 7% 160 7% 199 5% 211 4% 161 5% 50 4%

East 503 22% 573 25% 696 19% 903 19% 683 20% 220 16%

Kyiv 422 18% 406 18% 638 18% 805 17% 582 17% 223 16%

South 284 12% 225 10% 597 16% 774 16% 621 18% 153 11%

West 534 23% 430 19% 867 24% 1187 25% 735 21% 452 33%

Total 2302* 100% 2274 100% 3630 100% 4809 100% 3419 100% 1390 100%

* The “nationwide” events (i.e., those that were impossible to locate in a particular settlement) are not included in the

regional distribution

6

The number of protests per 1 million of

de facto population in regions

8

0

50

100

150

200

250

300

2010 2011 2012 2013

Center

Crimea

East

Kyiv

South

West

Ukraine

7

A Flaw in Unkrainian Constitution?

8

9

10

Renewal / Selection of politicians

• Myerson (2006) - ex-post selection

• Bernheim and Kartik (2010) - ex-ante selection

11

Decentralization initiative

12

Decentralization

• Government decentralization reform

• Academic decentralization initiative, February 24

– call for academic input

– Roger Myerson and Daron Acemoglu, Gerard Roland, Daniel

Treisman, Sergei Guriev, Paul Rodrik Grergory

– signed by more than 100 academics

13

Benefits of decentralization

14

Benefits of decentralization

• better local economic decisions

• counterintuitively, lower stakes in secession

• selection and training of national-level politicians

15

Focal issue

• Decentralization as means of preventing dictatorship

• Solution to the problem of non-existing institutions

16

Risks of decentralization

17

Risks

• Recentralization

• Capture of regions

• Corruption

• Secession pressure / ethnic or regional conflict

• Strengthening regional parties

18

Challenges

19

Recentralization

• Article 118 of the proposed constitution deals with decen-

tralization

– extremely vague

– keeps state administrations and creates local executive

councils

– details to worked out by law

• Financial resources?

20

Legitimacy

• The process is as important as substance of the reform

– The reform will not be backrolled only if it is understood

and protected by public

– Lower level politicial leaders, with ability to mobilize sup-

port, should feel ownership over the reform

– Convention and endorsements

21

Thank you!

22

Evidence?

23

Corruption

• ok if free press (Leesman and Markwardt 2009)

• not ok if more complex governing structure (Fan, Lin, and

Treisman 2009)

• Ukraine benchmark?

24

Safeguards against recentralization

• federalization provides a protective barrier (Inman 2008)

25

Strong national parties

• strong national parties are the key for

– smaller interregional conflict (Brancati 2006)

– better local public goods (Enikolopov and Zhuravskaya

2007)

• Ukraine - party of regions?

26

Decentralization as conflict mitgation strategy

• ethno-federalis works ok (Charron 2009)

• regional level inequality leads to civil conflict (Deiwiks, Ced-

erman, and Gleditsch 2012)

• armed clientilism (Eaton 2006)

• depends on what kind of decentralization (Siegle and O’Mahony

2010)

– increased support of local leaders, local expenditure, and

employment - good

– higher local taxes and higher local bureaucracies - bad

27