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Revolution and Reform in Ukraine EVALUATING FOUR YEARS of REFORM

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Revolution and Reform in Ukraine EVALUATING FOUR YEARS of REFORM ITRevolution DOES and Reform NOT in Ukraine MATTEREvaluating Four Years of Reform HOW SLOWBy Silviya Nitsova, Grigore Pop-Eleches, YOU and Graeme RobertsonGO LNG AS YOU DON'T STOP PONARS Eurasia July 2018 Revolution and Reform in Ukraine EVALUATING FOUR YEARS OF REFORM JULY 2018 Silviya Nitsova University of North Carolina at Chapel Hill Grigore Pop-Eleches Princeton University Graeme Robertson University of North Carolina at Chapel Hill PONARS Eurasia is an international network of scholars advancing new approaches to research on security, politics, economics, and society in Russia and Eurasia. PONARS Eurasia is based at the Institute for European, Russian and Eurasian Studies (IERES) at the George Washington University’s Elliott School of International Affairs. This publication was made possible in part by a grant from Carnegie Corporation of New York. The statements made and views expressed are solely the responsibility of the authors. Program Directors: Henry E. Hale and Marlene Laruelle Managing Editor: Alexander Schmemann Senior Research Associate: Sufian Zhemukhov Program Associate: William McHenry PONARS Eurasia Institute for European, Russian and Eurasian Studies (IERES) Elliott School of International Affairs The George Washington University 1957 E Street NW, Suite 412 Washington, DC 20052 Tel: (202) 994-6340 www.ponarseurasia.org Cover image: Shutterstock/Vadven 393132940 © PONARS Eurasia 2018. All rights reserved Executive Summary In February 2014, Ukraine grabbed the world’s attention with its second revolution in a decade. The corrupt and increasingly authoritarian administration of President Viktor Yanukovych was overthrown. After the revolution, Ukraine embarked upon a wide- ranging series of economic and governance reforms. In this volume, we assess the progress of these reforms and analyze the main factors that explain the successes and failures we see. Rather than attempt a comprehensive review of all areas of reform, we focus on a number of key areas—economic reform, governance and anti-corruption, security and criminal justice and language policy. Each of these areas is of fundamental importance for the development of Ukraine as a prosperous, independent and democratic state and so is worthy of attention in its own right. However, by focusing on these areas in particular, we also observe variation in the extent of the progress that has been made, allowing us to understand the key factors that have either driven reform forward or hindered it. We discuss the progress and challenges in each area. In each policy domain, there have been difficulties that reformers have struggled to overcome and many challenges remain. In no single policy domain that we analyze here has the promise of the revolution been fully and irreversibly realized. Nevertheless, there are areas, notably in economic reforms and governance and anti-corruption, where substantial progress has undeniably been made and the environment has been transformed compared to before the revolution. However, progress in the areas of security and criminal justice and language policy is much less clear. The key to understanding patterns of relative success and failure, we argue, lies in understanding the interaction between Ukrainian civil society and the international community. We develop the idea of the “sandwich model” in which domestic civil society plays a crucial role in elaborating policy ideas and in policing progress in implementation, while the international community presses an often reluctant political elite into adopting reforms. The most progress in reforms has been made where cooperation between domestic civil society and international actors has been close and well-coordinated. In other areas, progress has been more limited. The “sandwich model” represents a new way of understanding how international and domestic actors can contribute to reform in a context where neither the government nor the opposition are unambiguously supportive of essential reforms. Unfortunately, the conditions for success of the “sandwich” are rather stringent and rare. As a result, the battle for reform in Ukraine goes on and is far from won. Table of Contents Chapter 1. Reforms by Sandwich .............................................................................................................. 1 Learning the Lessons of Revolution ....................................................................................................... 2 Designing Reforms In and After the Euromaidan ................................................................................ 5 The “Sandwich” Strategy ......................................................................................................................... 6 What’s New About the “Sandwich”? ..................................................................................................... 7 Research Strategy – Illustrating the Importance of the Sandwich ................................................... 10 Conclusion................................................................................................................................................ 11 Chapter 2. Economic Reforms .................................................................................................................. 12 Gas Price Liberalization ......................................................................................................................... 13 Tax Reforms ............................................................................................................................................. 18 Conclusion................................................................................................................................................ 19 Chapter 3. Governance: Anti-Corruption .............................................................................................. 21 Creating New Anti-Corruption Institutions – NABU ........................................................................ 22 Asset Declarations ................................................................................................................................... 24 Asset Recovery ........................................................................................................................................ 26 Public Procurement ................................................................................................................................. 27 Reform Effects on Corruption Perceptions .......................................................................................... 30 Chapter 4. Security and Criminal Justice ............................................................................................... 34 Judicial Reform ........................................................................................................................................ 34 Police Reform ........................................................................................................................................... 38 Security Services Reform ........................................................................................................................ 41 Reform Effects on Corruption Perceptions .......................................................................................... 43 Conclusion................................................................................................................................................ 44 Chapter 5. Language Policy ...................................................................................................................... 45 Reform Dynamics .................................................................................................................................... 47 Public Opinion ......................................................................................................................................... 50 Chapter 6. Conclusions.............................................................................................................................. 53 The Sandwich .......................................................................................................................................... 54 Looking Forward ..................................................................................................................................... 56 Bibliography................................................................................................................................................ 58 Chapter 1. Reforms by Sandwich The Euromaidan Revolution was Ukraine’s second revolution in 10 years. The first revolution—the so-called Orange Revolution of 2004—while successful in removing a corrupt autocratic ruler, did little to change the political course of the country. In this, Ukraine’s experience was not that different from that of many of its neighbors. While mass protests have repeatedly demonstrated the capacity to remove autocrats in the post- communist space (Bunce and Wolchik 2011), the record on actually achieving deep and lasting reforms is much more mixed (Pop-Eleches and Robertson 2014). In case after case, it has proven difficult to maintain coalitions of revolutionaries, who are usually more united in opposition to the previous regime than in support for a positive agenda (Beissinger 2013). Moreover, once safely ensconced in the presidential palace, access to the enormous possibilities for corruption and self-dealing that power offers has proved a temptation
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