The risk for Ukraine is corruption caused by the influx of external funding — Jennifer Brick Murtazashvili

Author

Olena Hrazhdan

What does reconstruction mean? It’s not only about rebuilding walls damaged by explosions. The process of post-war reconstruction includes the reconciliation of conflicting groups within the country, renewing the sustainable work of government bodies, and strengthening the people’s cultural identification.

Ukraine will be writing a new page of global reconstruction history based on its experience of the war against Russia. It is the first country since World War II to be rebuilt after a war with an external aggressor while preserving its legitimate government and institutions endorsed by the people. However, there’s still an impending risk of repeating the mistakes made by other countries, such as Afghanistan.

To understand the process of future reconstruction in Ukraine, talked with Dr. Jennifer Brick Murtazashvili. She is the Founding Director of the Center for Governance and Markets and a Professor at the Graduate School of Public and International Affairs at the University of Pittsburgh. Dr. Murtazashvili has researched the post-war reconstruction processes in Afghanistan and studies governance and security in developing economies.

What reconstruction is and what this concept includes

Jennifer, you study post-war reconstruction professionally as a process. On the one hand, this is the actual rebuilding of infrastructure, industrial facilities, and housing. However, your experience shows that it's a more complicated concept. Can you please define it?

The most important is the reconstruction of political and economic institutions that facilitate long-term reconstruction after the war. A war causes destabilization. But the period of destabilization helps people rethink the political order and the nature of domestic political institutions and therefore rebuild the country so as to eliminate the issues that caused the conflict.

Now, Ukraine is a very different case. Post-conflict reconstruction, in most cases, happens after a civil war where people are fighting for their right to participate. Often, it is resistance against dictators who repress the population. In other cases, these are aggressor countries that were rebuilt, such as Japan and Germany after World War II.

Dr. Jennifer Brick Murtazashvili, Professor at the Graduate School of Public and International Affairs at the University of Pittsburgh. Photo by the press service of the Kyiv School of Economics

What international experience can we apply then?

First, it’s important not to be trapped by the rentier state effect. It occurs in a situation where revenue in the economy is not generated from productive sources. This can be oil revenue or international aid. It’s like inheriting a huge amount of money. The money can be spent carelessly, and the risk of corruption increases because you don’t have to think about your performance.

In economics, they call it the IKEA effect. If you build the furniture yourself, you value that furniture much more, although it’s inexpensive. So, the potential risk to Ukraine is corruption that comes from the huge influx of external funding.

I’m not saying that Ukrainians are corrupt or that the government is corrupt. It is a normal phenomenon when a country has huge amounts of aid money coming in or oil resources. We see this in a lot of oil-rich states, which have huge amounts of corruption.

Another concern is that the international community sets up parallel bodies to administer aid. It can undermine local governments in the region. The international community is often very bad at targeting the people who need assistance the most because they don't have good information. So they'll have two or three staff members who can direct hundreds of millions of dollars.

How decentralization helps reconstruction

You studied the case of Afghanistan. The country saw extensive reconstruction after the war, but international donors did everything by themselves and didn’t cooperate with local governments and businesses. People felt that their needs were neglected, and the Taliban leveraged it. What do you think should be done to prevent the donors from making such mistakes in Ukraine?

In Afghanistan, there were elections for officials at the national level but never at the subnational level. There were no elections of local governments but officials appointed by the central government. It means that people in local communities didn’t have a voice. So the donors said they had consultative meetings with community leaders led by NGOs. But I think it's not possible to have real, meaningful participation unless it's through a formal government body. This is where the final decisions are made. The locals didn’t believe the "consultative meetings". There was so much money coming in, and people couldn't hold the leaders accountable. They felt like the international community didn’t listen to them.

Ukraine, on the contrary, has real, meaningful decentralization. That means that decisions on reconstruction will go through local bodies, the hromadas (municipalities — ), whom people trust. This can be very inconvenient for donors.

The central government makes decisions quickly, while local governments are slower, so they may be said to be incompetent. But faster isn’t always better. What matters isn't the building of the school; it's people feeling that they were part of this and that the money for the school wasn't wasted. This seems to matter more than the actual reconstruction itself.

Lessons from Afghanistan for Ukraine

How do we achieve this feeling that the money wasn't wasted? Who should distribute the money?

This is up to the people of Ukraine. The donors may have a say, but they shouldn’t decide for the people. There has to be a debate about how the money will be spent. And it’s very important that everyone feels they have a seat at the table during the debate.

Speaking of Afghanistan again, reconstruction started there when there was still fighting. We expect the war to end soon with our victory, but nobody knows when it will happen. How is it possible to reconstruct a country that is still in an ongoing war?

I think there's two ways in Ukraine to think about this. The first one is the deoccupied territories. I visited Hostomel, Bucha, and Irpin. There's still a lot of physical damage to infrastructure there, but the local administrations have rebuilt everything very quickly. On the deoccupied territories that suffer from daily shelling, power sources and infrastructure also have to be rebuilt.

But then there's also ongoing political reconstruction. Ukraine has a goal that is EU accession. It wants to re-engineer some of its institutions to align them with EU standards. Such institutional reconstruction will protect the country from the kinds of corruption or civil conflicts that other countries face after wars.

Dr. Jennifer Brick Murtazashvili giving a lecture at the Kyiv School of Economics. Photo by the press service of the Kyiv School of Economics.

International partners may suspect corruption if they see the slightest notion that the game is not fair in procurement. What can we do to tackle mistrust between international agencies and the private sector?

This is where oversight is so important, and this is the role that civil society should play. My concern is that the role of civil society becomes confused when they're both implementing and overseeing reconstruction. I think that it should be the private sector that implements reconstruction projects. And it should be the NGOs and civil society that oversee, and investigate, and make sure that there's no corruption. You create a lot of opportunities for corruption when you have civil society both as advocates and as implementers.

The more oversight, the better. I’d like to mention the establishment of a Special Inspector General for Ukraine reconstruction. This institution is a very politically sensitive issue in the United States. Those politicians who are opposed to aid to Ukraine have advocated for the creation of the Special Inspector General.

But I also support this initiative because it will only help the people of Ukraine. The international community will inevitably make mistakes and do things that are wrong.

The citizens of Ukraine can complain to their own government about actions that the government takes, but they cannot complain to anybody about what the international community does. So, the Special Inspector General will protect the interests of the people of Ukraine and also protect them against corruption, as this organization is very effective in investigating instances of corruption.

The idea of having more oversight bodies is very politically unpopular among those who support giving aid to Ukraine. They are needed not because Ukrainians are bad or because there's anything bad about Ukraine. We know that Ukraine has a history of corruption. We know the effect that international aid has on corruption. Let us help Ukrainians protect themselves from us, the international community, and give them one more oversight body.

Recovery has just started in Ukraine. The burden of this process lies mainly on officials and businesses. How can other Ukrainians who don’t work in these sectors help implement this process?

It's hard for me to say as an outsider. But I would say that we should encourage participation, give everyone a voice, and let them talk and ask questions. There's such a spirit of this inside Ukraine.

I think that is what has helped Ukraine mobilize for the war, this incredible spirit of local participation and volunteerism. And that has to extend to reconstruction. Reconstruction can't be seen as something that's given to us by someone to help.

This is their own reconstruction, and they are not waiting for someone to do it for them. Let’s talk about raising the money. If the government doesn't have the money, people will find money to do this. There's an incredible spirit inside Ukraine.

I've seen this even as Tymofii Brik started a group on reconstruction [a group chat for students of the free Recovery and Reconstruction Course at Kyiv School of Economics — ]. This is the same. Not waiting for someone else but doing it ourselves.

[The Kyiv School of Economics organized a special free class on post-war recovery, inviting professors from leading U.S. universities. From August to December, they are giving lectures about various aspects of recovery in such areas as economics and econometrics, political studies, law, and social studies.]