This year is a crucial milestone in Ukraine’s journey of reform launched after the 2014 revolution, also called the Revolution of Dignity. Decentralisation in Ukraine has been widely acknowledged as very successful so far. Before the reform, the country’s state structure was permeated by centralised policymaking. Major decisions had to be approved by the central authorities in Kyiv, minimising the scope for local initiatives. The reform redistributes power from the national to the local level and allows communities to amalgamate on a voluntary basis. An increase in local budgets is one of the most visible successes of the decentralisation. Further reform steps in 2020 may represent either a transformative miracle or a dramatic disappointment.

The New Europe Center and the Centre for East European and International Studies (ZOiS) have conducted joint research to assess the current state of affairs regarding decentralisation and possible ways of resolving the challenges. A key result of the research is that decentralisation is one of the most popular reforms in Ukraine. In a recent survey of Ukrainians conducted by the Gorshenin Institute, 68.3 per cent of respondents thought the government needed to continue implementing local government reform, and 45.3 per cent said they had witnessed positive local changes as a result of decentralisation.

This year is critical for decentralisation. As of January 2020, 1,029 amalgamated territorial communities (ATCs) had been created under the reform, each with its own responsibilities, budgets, and rights. An ATC is a primary local government body in Ukraine created through the association of the residents of several towns or villages. So far, ATCs have been created on voluntary basis, showing the democratic, grass-roots nature of the reform.

But Kyiv now has an ambitious intention to merge non-amalgamated communities in the coming months, because state-wide local elections are planned in October this year. Time pressure is a major feature of the government’s reform efforts. The authorities intend to hold regional public consultations, amend the constitution, and create more than 300 new ATCs in a challenging timeframe.

International support

Western donors have contributed more than €250 million to Ukrainian decentralisation. Cooperation between Ukrainian authorities and donor organisations on decentralisation can serve as an effective model for other reforms. Overall, Ukraine is currently implementing twenty-four Western-backed projects and programmes.

In 2017, the German government appointed former minister-president of Saxony Georg Milbradt as its special envoy for Ukraine’s decentralisation. This is a unique format of cooperation between Ukraine and Germany, underlining Berlin’s strong support for Kyiv’s decentralisation reform. As the history of decentralization in Europe shows, there is no universal recipe for success. Thus, Ukraine has had to define and implement its own unique model, borrowing from — but not copying — best practices of Scandinavian countries, Poland, Germany, France and the Baltic States.

The benefits of decentralisation

One of the major changes associated with decentralisation is the blossoming of local democracy. Local authorities are now more attentive to the expectations of their communities. Previously, local politicians could ignore the wishes of voters and blame the central government for not approving or funding local projects. Now, civil society actors are engaged in so-called participatory budgets, a consultation process that is virtually unprecedented in the post-Soviet space.

A system in which local officials have more direct contact with, and accountability to, communities makes wrongdoing such as corruption harder. The threat of public condemnation is perhaps more likely than a conviction in a Ukrainian court.

In this context, it is important to support independent local initiatives and projects aimed at monitoring budget expenditure. Western donors that encourage anti-corruption activities in Ukraine should pay more attention to this sphere. The Ukrainian government, supported by external stakeholders, should also reform the country’s law-enforcement system and judiciary, because many local independent investigators have been endangered or killed by elites seeking to preserve corrupt practices.

Democratisation is not the only major effect of decentralisation. There have been more practical outcomes, too, which have been visible and popular. For the first time in many years, small towns and villages are emerging from hibernation, as new funds allow them to restore local infrastructure. Local authorities have begun to fund repairs of old schools and the construction of new ones, as well as the restoration of communal buildings, for the first time since the Soviet era.

The major challenge is how to seize these opportunities. Resources are limited, and it would be beneficial for communities to invest more in development projects. Criticism is sometimes directed at Ukraine’s lack of strategic vision for how the state should look when the full package of decentralisation initiatives is finalised. Decentralisation implies changes not only in administrative and territorial structure but also in healthcare and education. Many steps are being developed and carried out ad hoc, which may undermine large-scale efforts.

Ukraine has become a leader in democratic transformation in the post-Soviet space. Successful decentralisation may have wider positive impacts. EU and German help and advice to Ukrainian decision makers is highly important at this stage. EU member states with a deep knowledge of decentralisation should continue to play an active role in the implementation of Ukraine’s reforms.

This article was written as part of a project carried out jointly by the New Europe Center (Ukraine) and the Centre for East European and International Studies (ZOiS, Germany). The article is a summarised version of the paper ‘The Link between Decentralization and EU Integration’ presented in Berlin in February 2020.

Sergiy Solodkyy is the first deputy director of the New Europe Center in Kyiv and an expert in foreign policy, international relations, and security.