Podcast “Reconstruction” with Myroslava Savisko: Ten Years into Decentralization

On the achievements of decentralization reform after ten years

Both our European partners and Ukrainians believe that decentralization is one of the most successful reforms since 2014. First and foremost, it has become a prerequisite for Ukraine’s resilience in this war: communities acted as the block that prevented Russian troops from advancing deep into Ukrainian territory. Therefore, it is logical to ask: “What truly helped? What distinguishes the functioning of the lowest territorial units before and after the start of the reform?”

Before the start of decentralization, district administrations, headed by officials appointed by the President, were responsible for providing services to residents, including social services. The idea of the reform was to enhance service quality by enabling the heads of amalgamated territorial communities (ATCs) to communicate directly with residents, thereby increasing their accountability. Consequently, trust in local government bodies, along with their effectiveness and quality, should increase.

Thanks to academic research, we have confirmation that this has worked. 

For example, the article by Oleksii Hamaniuk shows that in communities that voluntarily merged, the income from PIT grew faster than in areas where pre-reform management methods were retained. This indicates that the planned objectives were achieved: trust among both businesses and residents in the newly formed administrative units increased. Consequently, these communities could improve service quality because they had more funds to invest in roads, schools, healthcare facilities, and more.

Of course, there were also shortcomings in the reform. A significant number of communities did not merge voluntarily, and in 2020, a Cabinet of Ministers resolution forced the unification of those that had not done so themselves. This resulted in a certain gap between those who took advantage of decentralization opportunities earlier and those who did so later.  

How the EU views the reform today

The main requirement of the European Union is not to stop where certain achievements have already been made. Our partners express concerns regarding the establishment of military administrations in areas where the security situation allows for the existence of civilian administrations.

Another important issue is the ability of local self-government bodies (LSGs) to influence state policies. In particular, this pertains to the personal income tax: whether this tax remains at the local level or goes to the central budget. The European Union continues to emphasize that in matters directly related to communities, there should be consultations with LSGs and maximum involvement of these bodies in decision-making. 

Before the full-scale war, more than 70% of all communities in Ukraine were subsidy-dependent, meaning they received additional funds from the state budget. Seventy percent is a significant number. With the war, communities in frontline or border areas near Russia and Belarus have suffered greatly due to a decline in tax revenues. 

All this has created a gap between the levels of provision among different communities. Many communities have relatively fewer tax revenues but not fewer needs. As a result, LSGs may be unable to fulfill all their obligations. This, in turn, can be exploited for manipulation by various groups, sometimes even separatist ones, and may take the form of political conflicts in other areas. 

On centralization and decentralization in the European context

A significant number of EU countries are decentralized. At the end of the last century, EU countries adopted the European Charter of Local Self-Government, which encourages the implementation of the principle of subsidiarity, meaning being as close to residents as possible in order to provide services at the lowest level and receive feedback.

In our reform, we looked to countries that have already undergone a path similar to Ukraine’s, such as Poland. Like Ukrainians, the Polish have a tendency toward a centralized state, believing that “someone will decide everything for us, and that will be better.” There is even a specific term in academia for this tendency — “stubborn institutions” — a threat that exists for us right now. 

It is essential to understand that only a short time has passed since the reform, and therefore, LSGs have not yet gained sufficient influence at the local level. As a result, there is a strong desire among regional and oblast-level elites, as well as central-level politicians, to return to the old system, where it is very easy to appoint key leaders and control them. However, it is precisely the delegation of greater power to communities that provides the leadership that manifests itself in critical and crisis situations, when people do not wait for decisions from above but make decisions independently and implement them.

On engaging citizens in local governance

A significant role in engaging citizens lies with the leadership and their chosen methods of managing the community. It all starts with the team that the head of the community has. There are quite hierarchical systems where the leader assigns tasks to everyone and expects them to be completed. Then, there are more horizontal systems with several key managers, in which staff initiative is highly encouraged. In those management systems where the head promotes horizontal interaction and does not control all processes, I believe there is greater engagement from businesses and civic organizations. When people see they are given opportunities to contribute, they take advantage of them.

Therefore, it is extremely important to encourage horizontal leadership and management so that not just one head is responsible for everything but that they develop as many hubs as possible where people can also show initiative and take action locally. However, this cannot happen without trust and understanding that sometimes it may take longer than if you set the tasks yourself. 

On citizens’ expectations

In the course of the full-scale war, we have realized that in addition to services such as education and healthcare, there are also specific expectations regarding how quickly local authorities will respond in the event of a missile strike, whether they will assist with window installations and backup power supplies, the condition of shelters, and overall how various services will react.

We investigated what priorities residents have versus those of local self-government bodies and found that the latter tend to focus more on traditional areas of management. These include public utilities, economic development, and healthcare issues. Among residents’ priorities are developmental issues: not everyone is satisfied with road conditions or the economic situation. Furthermore, residents are actively paying attention to matters related to shelters and the government’s response to shelling and attacks. 

We also surveyed businesses and civic organizations, and representatives from the business sector reported that LSGs do not often reach out to them for help. This is also an issue of insufficient engagement, as finding comprehensive support is crucial in critical situations.

One of the most striking findings of the study for me was the response to the question about the support received by internally displaced persons, families of military personnel, and service members who have returned from combat (“How do you assess the community’s support?”). In all the communities where the research was conducted, it turned out that the assessment of the level of support for IDPs was higher than for military personnel and their families. How can this be explained? Perhaps it is because communities have learned a bit better how to work with IDPs but have not yet fully figured out how to support the families of service members, especially since their numbers have significantly increased in recent years. Or it might be about understanding the concept of support in general. A significant number of responses from military families were “I don’t know” or “I can’t answer.” Therefore, it is possible that citizens do not fully understand their needs, which the community could help to address. 

What can communities do now to be more resilient?

Based on our research, we can offer several important recommendations. First, the primary focus should be on partnership. Communities need to collaborate with one another, with communities abroad, and also establish cooperation within the community itself. 

The second factor of community resilience is management. We often lack capable teams, and finding them is crucial for both quickly responding to developments and thinking about recovery, as well as for providing quality services here and now.  

The third piece of advice I would like to add is that communities must unite more actively in associations and alliances to jointly defend their interests. The most important thing here is speaking with one voice. This is crucial for advocating and lobbying for their interests at the central level.