1. Economic reforms will help eliminate corruption in Ukraine
Corruption worsens country’s investment climate. It increases direct costs of doing Corruption hurts the
business making national product less competitive, and hampers establishment of a economy and general
level playing field. Corruption distorts competition, increases business and welfare
personal risk. The economy suffers on many fronts - from reduced incentives to
reduced long-term investments to reduced activity. Ultimately, the price is paid for
in growth and well-being.
And corruption can actually be brought under control - Chile, Singapore and South
Korea have all shown that cultures of corruption can be reformed. Research shows
that getting rid of corruption pays off handsomely in the long term - incomes per
capita can go up three times.
Ukraine does not do well today: it is ranked 134 out of 178 in the Transparency
International Corruption Perception Index. President Yanukovitch has introduced
an economic reform package that was intended to improve things. But will it
work? Was it right to initiate economic reforms before corruption was tamed?
Arguments FOR
The reforms will reduce the role of the state in the economy. That reduces the A smaller state offers less
opportunity for corruption, so will reduce its level too. The number of licenses and opportunity for
permits required to do business in Ukraine will fall; hence, as the degree of contact corruption …
required between the state and business falls, so will corruption. Privatisation will
have the same effect. The smaller state will be able to concentrate on its core
function of levelling the playing field. A smaller state is more easily held to
account. All in all corruption should be reduced.
Some social functions are irreducibly the proper purvey of the state - public goods, … and public sector
some standard-setting and anti-trust law. The reform package aims to increase reform will make for a
transparency and accountability in those areas that remain under state control. more transparent state
Energy tariffs are to be increased towards cost-reflective levels, and public
procurement will be reformed to enhance transparency. Responsibilities will be
properly ascribed and the civil service will become professionalised. A well-
functioning state offers fewer motivations for corrupt practices.
Foundation for Effective Governance
Ukraine, Kiev, 23-F Kudryavskaya Str., tel: +380 44 501 41 00, факс: + 380 44 501 41 05
feg@feg.org.ua
www.feg.org.ua, www.debaty.org

2. Arguments AGAINST
All very well in theory, but think about the implementation: that will entirely be in A corrupt system cannot
the hands of corrupt bureaucrats and politicians backed up by a corrupt media. You reform itself - the
would need real monitoring by the public and strong coercive measures in place to sequencing is all wrong
get implementation anywhere near what is needed. Without it, the reforms will be
blocked or manipulated for the survival of the current, vicious system. Things
could even be worse than they are today. Get real: a system this corrupt cannot
reform itself. The political system needs to be cleaned-up first. The reforms have
got the sequencing all wrong. Look at Georgia, they successfully reformed their
police by implementing structural reforms together with replacement of the
incumbent police staff not prior to that.
A big piece of missing reform is the judiciary. You cannot have effective The whole system -
deregulation, for example, even if the governing law is unambiguous but including the judiciary -
businesses cannot actually get protection in court. A good law overseen by an needs reform, not just the
incompetent - or corrupt - judiciary is of no use at all. Again, the sequencing is all economy
wrong.
The impact of the economic reform package on corruption in Ukraine will be debated in public at an event
brought to you by the Foundation for Effective Governance in partnership with London-based Intelligence
Squared on October 13th in Kiev, Ukraine.
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Statistics
Control of Corruption for different countries in years Correlation between Corruption Perception Index
1998 and 2009 (CPI) and Global Competitiveness Index (GCI)
World Bank Worldwide Governance Indicators Transparency International and World Economic Forum
Foundation for Effective Governance
Ukraine, Kiev, 23-F Kudryavskaya Str., tel: +380 44 501 41 00, факс: + 380 44 501 41 05
feg@feg.org.ua
www.feg.org.ua, www.debaty.org