Towards Effective Anti-Corruption Strategies in Ukraine : Removing the Cornerstone Without Toppling the Building

The work presents a theoretical framework, and offers a tentative analytical framework for building strategies for combating systemic corruption of the kind that is observed in Ukraine. It argues that, as in some other countries undergoing the process of modernization, corruption in Ukraine plays an important social role by filling gaps between formal (often impracticable) rules, and informal ones. At the same time, it creates incentives and provides the means for maintaining and widening these gaps, as in the critically important case of 'capture' of the state by extorting officials endowed with abnormal administrative discretion and affiliated with crony businesses. Systemic factors of such kind make corruption so persistent and anti-corruption so necessary for development. Effective strategies should primarily address the real sources of corruption, and take into account the possible side effects. Otherwise anticorruption efforts can bring only limited success, and may even become counterproductive, as demonstrated in the examples of previous anti-corruption attempts in Ukraine. Meanwhile, prior to the Orange Revolution, systemic factors prevented the implementation of effective anticorruption strategies. In order to facilitate the creation of anti-corruption constituencies, it is proposed to classify the corrupt deals as embezzlement, collusion, overtimes, and extortion based on the interests of involved and suffering parties. Implications from this theoretical analysis are combined with some standard political economic recommendations in the tentative analytical framework for policy making and public advocacy. As examples of its application, tentative anti-corruption strategies are suggested for some forms of corruption in Ukraine, such as capture in setting up legislation and extortion in its enforcement; embezzlement in budget execution, collusion in procurement and regulation, and asset stripping in state-owned firms; collusion and extortion in public services; and extortion in the public administration