Ukraine’s decentralization reform has been hailed as one of the country’s most successful since the 2013-2014 Revolution of Dignity. Recently, a piece in Foreign Affairs claimed that Ukraine’s decentralization has ‘brought the country together’ in the face of Russia’s 2022 invasion, fostering political legitimacy, solidarity, and community pride. Offering a different perspective, in my research paper published in the Journal of Intervention and Statebuilding, I argue that the political, administrative, and fiscal processes of decentralization in Ukraine during the War in Donbas has further instituted certain inequalities and emboldened oligarchic power, which may pose difficulties for future post-conflict reconstruction, summarised here.
Stages of Decentralization
Ukraine’s decentralization involved not only the devolution of administrative responsibilities, fiscal resources, and political power to local government levels, but the amalgamation of these smaller units into ‘Amalgamated Territorial Communities’ (ATCs). This restructuring process began soon after the War in Donbas started in early 2014 and was originally envisioned to progress through both (1) constitutional reform, instituting local levels of politics within the constitutional system of government, and (2) ordinary legislation, devolving power and resources to municipal bodies and amalgamating roughly 11,000 local councils into 1,200-1,800 ATCs. Indeed, administrative decentralization through constitutional reform was also embedded into the Minsk Agreements, which stalled due to fears it may formally cede territorial control to Russia. As such, decentralization only proceeded through legislative action.
Legislative reform progressed through a first stage, from 2014-2019, which involved administrative and fiscal decentralization and the voluntary amalgamation of municipalities, and a second stage, which was the enforced amalgamation of remaining municipal bodies, from 2020-2021. It was hoped that this restructuring program would increase administrative transparency and divert political power from the central state, which has historically been captured by oligarchic financial-industrial groups, toward ‘the people’. As such, decentralization would help empower groups such as women and internally-displaced persons (IDPs).
Power to the People? Destruction, displacement, decentralization, and the Donbas
However, evidence suggests that decentralization negatively impacted the ability for marginalised groups, such as IDPs and women, to engage in the political process. First, legislation governing voting in municipal elections curtailed IDPs’ right to vote, based on their general inability to access a ‘registered place of residence’ under the legislation, which ensured local political bodies were relatively unresponsive to IDPs. Following years of protest, the Ukrainian Government finally updated the election code to permit IDP participation in the October 2020 elections.
Second, amalgamation fostered mass redundancies, especially for lower-level civil servants, disproportionately women. As voluntary amalgamations began with the beginning of the war in Donbas, 12,000 social workers and 25,000 healthcare professionals, predominantly women, lost their jobs. Education facilities such as preschools have also closed due to their transfer to local budgets, which further burdened women’s labour to pick up the slack. These dynamics were amplified on the warfront, where amalgamation in Luhanska made most staff within social protection and children affairs departments, predominantly women IDPs, redundant, impacting crucial services in vulnerable communities. The IMF also successfully pushed the Ukrainian government to eliminate previously ‘protected expenditure items’ in subnational budgets, mainly that of wages and social spending, with the advent of decentralization.
Third, forced amalgamation of remaining local communities in 2020 was unpopular and catalyzed further Ukrainian disillusionment with decentralization. For example, one national survey found half the respondents experienced no consequences of reform, with 12% believing changes for the worst occurred, particularly in the provision of medical services and aid to vulnerable people. Indeed, dissatisfaction with public health with decentralisation has been widely noted, concerning the health impacts from the war, HIV, and COVID-19 in Ukraine. This depth of disempowerment was reflected in voter turnout in the October 2020 elections. In the first round, only 39% of voters participated, lower than in previous elections. In second round voting, average turnout was a little over a quarter.
Finally, issues exploded on the frontlines of the War in Donbas with the conclusion of ATC amalgamation and 2020 elections. Across frontline ATCs, electoral processes were suspended due to ‘security reasons’, and Civil-Military Administrations (CMA) were established across Donetska and Luhanska. This situation persisted into 2021, with half the CMAs in Donetska lacking finalised leadership, while other CMA leaders received heightened remuneration. Delays meant that old municipal-level bank accounts were blocked while new ATC accounts remained inactivated, creating an inability to cover the expenses of essential frontline services. Communal institutions were threatened with the cessation of utilities due to arrears, and thousands of social service employees missed wages, as NGOs raised concerns that vulnerable groups were especially impacted.
Money Decentralises to Oligarch Pockets
The devolution of money to localities is often presented as illustrating the success of Ukrainian decentralization (i.e., here, which argues without analysis that more local resources caused better social services). However, infrastructure is prioritised in the use of ATC resources over social services, with infrastructure funding drastically increasing since 2014. Evidence suggests that locally-flowing money has been funnelled into infrastructure projects beset by incompleteness, inefficiencies, and/or questionable practices, or towards local representatives of pro-government parties. Indeed, recent anti-corruption investigations reveal several high-profile cases of embezzlement regarding road-based infrastructure. Budinvest Engineering has been one such example, a “road construction/maintenance” front company for regional oligarchic interests, with patronage in the regional Dnipropetrovsk administration and Zelenskyi government. Budinvest received billions of hryvnias in the last two years, including 1.5bn during the 2022 Russian Invasion, for road contracts, but with little evidence of work completed, disappearing money/materials, and vastly inflated costs.
Further, increased resources and the fragmentation of the political space have fuelled competition for well-funded, politically powerful local posts. Local powerbrokers, whether oligarchs or municipal politicians (or both), have dictated decentralization; accelerating the process when opportune to extend their influence, or delay, redraw, or disrupt amalgamation when their interests were threatened. Max Bader provides an example of oligarchic capture through a ‘feudal estate’ in Khrestovska ATC within the Kherson region, where, in 2020, the biggest local agricultural company was affiliated with the ATC head and approximately 70% of ATC council members.
Overall, the main takeaway is that decentralization is not a silver bullet that occurs in an abstract environment. As in other contexts, decentralisation can worsen problems when pursued within insecure environments, where people are already marginalised and/or elite capture is rife, as in Ukraine. Despite promises that decentralization in Ukraine would reduce oligarchic power and empower marginalised groups, it seems these aims have not been met and may now, post-reform and with the 2022 Russian Invasion, be even more difficult to achieve. For Ukrainian decentralization to meet its laudatory aims, concurrent fundamental structural change must dismantle elite patrimonial-criminal nexuses, bring political and economic power to regular and marginalised Ukrainians, and unravel violent capitalist relations.