Dear Chairman, Members of the Committee, Colleagues,
Allow me to thank you for the opportunity to speak at these hearings. It is a great honor to be in the presence of so many distinguished experts on combating corruption.
I have had the honor to head a three-year project as part of the Threshold Country Plan (TCP) between the US and Ukraine's governments, entitled ACTION, and funded by USAID and the MCC. TCPs focus extensively on providing technical assistance and best practices to allow for improvements in priority areas. In Ukraine those areas are the court system, notaries, civil service, education, the regulatory sector, and customs. My company, Management Systems International, was tasked with monitoring progress along the TCP priority targets. Together with our colleagues at the Kyiv International Institute of Sociology and the research company "InMind," we have conducted over 20 surveys and are currently about to release the follow-up surveys which should give an indication of what has changed in corruption over the last two years.
Here is a quick preview of our major survey findings: Corruption levels in Ukraine have remained remarkably stable over the last two years - interestingly, we do see a slight increase in corruption perceptions among the public (how widespread people think corruption is) at the same time that we see a slight decrease in actual corruption experiences (the factual corruption that citizens themselves experience). These trends are common for societies that are being exposed to extensive anticorruption initiatives. Public perceptions of the problem usually increase because the issue is always in the media and the public agenda. But it is a good sign that the actual corruption experiences of everyday Ukrainians are trending downward, even if it only amounts to a slight reduction for now. Decreases were witnessed in the fields of customs, courts, education, and real estate.
In addition, we have worked extensively with Ukraine's NGOs and Journalists, in supporting their development into professional advocates for citizen's interests. We have financially supported over 200 NGOs and trained over 550 journalists on investigative reporting related to cases of corruption.
Allow me to take a few minutes to try and make some preliminary conclusions from our work based on our experience working with civil society and measuring corruption in Ukraine.
1) Ukraine's citizens have a love-hate relationship with corruption;
In a variety of our quantitative and qualitative surveys, we found that Ukraine's citizens have grown accustomed to high levels of corruption. Decades of corruption in government have led citizens to blame all of their problems on government corruption, quick to identify those in power as the main culprits, and wash their hands of responsibility. We have found, however, that while extortion by government officials is the most common form of corruption, levels of voluntary bribe-giving, even accounting for a certain amount of under-reporting, are substantial. So, corruption is definitely a two-way street in Ukraine.
We see that especially the young, educated, and more affluent are willing to engage in corruption to get ahead. At the same time, this same group - young, educated, and more affluent - is the one that declares the highest readiness to counteract corruption. This indicates a complicated relationship that Ukraine's citizens have with corruption - it is engrained in day-to-day functioning and seen as an acceptable tool to solve problems by 53 percent of the population.
Corruption is seen as an acceptable way to get things done: it is a market transaction that solves problems. Citizens are most concerned about corruption when it costs too much. They treat it as an auxiliary service product to tame the market they have to live in.
It is thus clear that there is little understanding of the mid- and long-term effects of corruption: it is not clear to the vast majority of our respondents why giving a bribe to the doctor once (and then every time during following visits) makes a substantial contribution to the provision of sub-par medical services.
We have conducted some public education activities to explain the social costs of corruption, but much work remains to be done by the Ukrainian authorities and non-governmental organizations.
2) Corruption should be combated not as a sin, but regulated as a market mechanism
As stated above, citizens - especially the active part of the population - see corruption not as a sin, but as a service that can be used in their favor.
It is not useful to try to counteract corruption as an immoral act; this is not likely to work in getting bureaucrats to stop demanding and citizens to stop offering bribes. Rather, regulatory tools should be used instead to decrease corruption. Ukraine has much experience in regulating "undesirable" services and some of these experiences might be useful here.
Let me explain what I mean here about regulating corruption:
Increasing its price and decreasing its reliability: These can be achieved by applying institutional safeguards, be they through mutual monitoring of other government agencies, media or civil society. The Threshold Country Plan is very active in this sphere: decreasing subjectivity in various government processes (such as random case assignment in courts and standardize testing to university admissions), developing monitoring ability (through internal investigative units and investigative reporting), and developing various transparency mechanisms (new legislation on access to information). We understand that even the most perfect system can eventually be beaten, but this will require extremely high investments and sophistication which will drive the price of corruption up so high that is will hopefully become unfeasible.
Consider higher education: the introduction of standardized testing has been a huge success in decreasing corruption by decreasing the ability of making subjective judgments. As a result, we see a tremendous drop in the use of personal contacts during the 2008 admission year. Could the computer systems have been broken given sufficient effort? Probably. But the cost of doing so would have been so incredibly high that it was simply easier to sit and study for the test.
If traffic police will be so scared of losing their job, they will only accept bribes of a substantial amount that covers their potential risk. If this risk is increased, so is the sum of the bribe. At some stage, it becomes economically impractical to engage in corruption for the vast majority of the population. If corrupt officials cannot provide a reliable corruption "service" because the computer system, and internal investigations, and journalists are watching too closely, the businessman is going to start considering legal options to get his license.
Before starting new corruption initiatives, we should always ask ourselves whether it will likely lead to an increase in the price of corruption and a decrease in its reliability.
3) NGOs are finally able to play an active role and be partners in the process;
We have witnessed an explosion of NGO activity over the last two years. They have not only received funding, but also training and know-how and are likely to continue anti-corruption efforts in Ukraine over the coming years. The over 200 individual projects largely monitored particular government anti-corruption activities, analyzed the results and then made recommendations on how to improve them in the future. In over 50 cases, these recommendations were adopted by local or regional government, proving that NGOs are ready to be partners. They have recently joined their efforts in coalitions and are focusing on admission to universities, access to government information, and providing legal services to citizens suffering from corruption.
NGOs monitoring efforts are another contribution toward the above formula: increased attention to corruption increases its risks. Improved administrative standards increase their cost.
4) Journalists are finding their stride in investigative reporting;
Over the last two years, investigative reporting has developed into a substantial force in the anti-corruption sphere. Previously a rare effort, hundreds of journalists throughout Ukraine have now received training and are starting to conduct investigations. They are also getting increasing support from their editors and publishers, a crucial link in the complicated chain of events that lead to high-quality investigations. While many problems with media bias are considered to exist, much progress has been made as can be witnessed by several high profile investigations over the last few years - for example the usage of vaccines, and tender procedures and practices.
Investigative reporting is able to uncover elaborate corruption schemes, which as a result become less attractive. This is again likely to increase the price of corruption.
5) Access to information is a universal problem if Ukraine is going to make progress in combating corruption.
Finally, an issue that is of direct attention to the members of parliament present here: all our civil society partners have found that the largest obstacle to their anti-corruption efforts is a lack of access to government information. While it has been regulated by the "Law on information" this regulation is insufficient for the purposes of effective anti-corruption work, as confirmed by numerous Council of Europe expert reports. The leading Ukrainian think-tanks have joined forces in developing a new draft "Law on access to public information" that is scheduled to come before parliament in the first hearing later this week. The law includes the most progressive western access to information concepts while keeping in mind Ukrainian realities and has been endorsed by Article IXX, an international access to information watchdog, and the special representative of the OSCE on Freedom of the Media.
Access to information is the ultimate tool that shines sunlight onto corrupt dealings. It makes every government transaction of public interest potentially available to the same public and thus dramatically increases the risk of corruption.
I thank you for your attention and look forward to further collaboration.
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