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Democratic Governance in Eastern Europe Analysis and Recommendations for the UNDP Country Programs in Belarus, Georgia, Russia, and Ukraine.

29 April 2009

Harvard Kennedy School Democratic Governance in Eastern Europe 29 April 2009

Emily Cintora

[email protected]

Report for UNDP

Bratislava Office

Democratic Governance in Eastern Europe 29 April 2009

1

Democratic Governance in Eastern

Europe

Analysis and Recommendations for the UNDP Country Programs in

Belarus, Georgia, Russia, and Ukraine.

I. Executive Summary

The last two decades have brought innumerable changes to Eastern Europe. Caught between old

legacies and new international norms, Eastern Europe is at once making both gains as well as facing

complex challenges in the democracy transition. These conflicting trends are evident in the countries of

concern for the UNDP’s Bratislava office: Belarus, Georgia, Russia and Ukraine.

After the “colored revolutions” in the early part of the decade, Georgia and Ukraine turned the corner

towards improved democratic governance. Although pervasive problems such as corruption,

inefficiency, and political deadlock have prevented more comprehensive transitions, both countries

have opened up to key political and administrative reforms. The UNDP provide targeted support to

capitalize on existing momentum to encourage further democratic reforms.

Despite these regional success stories, the UNDP must also provide targeted support to the

underperformers: Belarus and Russia. High levels of centralization and weak civil society threaten

governmental effectiveness and existing democratic institutions. In Belarus and Russia, the UNDP must

support programs that effect substantive changes yet will not be obstructed by political barriers.

UNDP faces considerable challenges in the region, including political instability, governmental

ineffectiveness, poor rights protection, and low responsiveness to citizens’ needs. Nevertheless, the

current context provides opportunities for projects targeting public administration reform, local

governance, anti-corruption and civil society and the media.

Report Objectives

This report will summarize the key challenges in the region and identify the areas the UNDP can

strategically address. UNDP priorities are determined based on the needs of the countries and the

feasibility of programs in specific country contexts. The report presents a range of policy options in the

areas of public administration reform, anti-corruption, local governance, civil society and media and fills

in the blanks of existing UNDP programs in these countries. Finally, the recommendations present a

strategic plan for the UNDP’s funding, programming, and regional partnerships.


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General Recommendations

UNDP Office Recommendations for Priority Areas of Democratic Governance

Bratislava Create a strategic funding and program plan for the region based on key challenges

and political feasibility.

Build a regional strategy based on shared concerns such as public administration

reform, local governance, anti-corruption, and civil society and media supplemented

with country-specific targets to fill in existing UNDP programmatic gaps.

Engage regional partners such as USAID, the World Bank, and other development

agencies and NGOs where appropriate to maximize the potential for program

success.

Belarus Focus on politically feasible programs targeting public administration reform, local

service delivery and corruption in order to gain foothold in the country.

Georgia Capitalize on existing momentum in anti-corruption, local governance and public

service delivery and build up existing civil society and media to support other

democratic reforms.

Russia Focus on politically feasible programs targeting public administration reform, local

service delivery, and corruption and assist support networks of media and civil

society to promote transparency and accountability.

Ukraine Capitalize on existing momentum in local governance and public service delivery b

building up existing civil society and media to support other democratic reforms.


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II. Table of Contents

I. Executive Summary .................................................................................................................. 1

Report Objectives ....................................................................................................................... 1

General Recommendations ........................................................................................................ 2

II. Table of Contents ................................................................................................................. 3

III. Key Challenges in the Region ................................................................................................ 4

IV. Causes of Key Challenges ...................................................................................................... 8

UNDP’s Strategic Priorities for the Bratislava Office ................................................................ 12

V. Policy Options and Strategic Programmatic Interventions ................................................... 14

VI. Conclusions ......................................................................................................................... 18

VII. Technical Appendix ............................................................................................................ 19

Appendix I: Regime Indictors .................................................................................................... 19

Appendix II: Human Development Report 2007 Data .............................................................. 20

Appendix III: Indicators Used in this Report ............................................................................. 21

Appendix IV: Decentralization in Europe, UNDP Measures ..................................................... 23

Appendix V: Regional Partners and their Existing Projects ...................................................... 27

Appendix VI: General Indicators ............................................................................................... 28

Appendix VII: Policy Options Case Studies................................................................................ 28

VIII. Endnotes............................................................................................................................ 33

Published Sources ..................................................................................................................... 33

Data Sources ............................................................................................................................. 35

Cover photos from Wikipedia.org, undp.org, Google Images, and Getty Images.


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III. Key Challenges in the Region

After the dissolution of the Soviet Union, a new generation of nations took shape in Eastern Europe.

Belarus, Georgia, Russia, and Ukraine are integral actors in Eastern Europe’s economy and society and

also represent the overall region’s successes and setbacks to democracy. Popular indicators, like

Freedom House or Polity IV, fail to agree on the state of democracy in several of these countries,

indicating complex transition processes. Yet four key challenges are evident, including political

instability, ineffective government functioning, insufficient protection of rights, and unresponsive

relationships between governments and their citizens.

Political Instability1 Fluctuating political stability has a significant impact on the quality of services and

efficiency that their governments can provide to their citizens. Since 1996, these countries have shown

small gains in political stability, as shown in Figure 1. Notably the largest improvements were made in

Figure 1: Political Stability in Eastern European Countries

Source: Kaufman and Kraay, World Bank Indicators, 2008.

Note: Political stability measured from -2 to +2. In 2007, Belarus and Ukraine ranked in the 50th-75th percentile of

the world’s countries in political stability while Russia and Georgia ranked in the 10th to 25th percentile.

Georgia and Ukraine in the early part of this decade after the Rose and Orange Revolutions. Also

significant is the relatively and consistently higher stability of Belarus (likely due to firm government rule

under Lukashenka since 1994), which nevertheless has made the least progress in the sectors of

democratic governance. Despite showing some initial promise in achieving stability in the 1990s, Russia

took steps back under the Putin presidency, which is it slowing attempting to regain. Despite some

deceptiveness of the indicator in the case of Belarus, political instability continues to hinder the

potential of governments and institutions in the region.

Democratic Governance Not Always Linked to Political Stability in

Bratislava's Countries of Concern

-1.8

-1.6

-1.4

-1.2

-1

-0.8

-0.6

-0.4

-0.2

0

0.2

0.4

1996 1998 2000 2002 2003 2004 2005 2006 2007

Year

Po

liti

ca

l S

tab

ilit

y E

sti

ma

te

Belarus

Georgia

Russia

Ukraine


5

Governmental Ineffectiveness2 Likely part of a feedback loop with regional instability, governmental ineffectiveness also challenges the region (see Figure 2). Although some improvements have been made over the last ten years, these four countries continue to rank below or near to the 50th percentile of governmental effectiveness worldwide. Furthermore, all four governments consistently had negative scores for the last ten years. In Georgia, this translates into a lack of territorial control and of capacity in local governance structures and in the judicial system. In Ukraine, governing ability is hindered by political deadlock between the prime minister and president, a lack of funding to support an independent judiciary, and predicted rising rates corruption. In Russia and Belarus, local outlets for governance are non-existent or serve as delegates to the central government.

Figure 2: Governmental Effectiveness in Eastern Europe


Note: Governmental effectiveness measured from -2 to +2. In 2007, all countries except Georgia ranked

below the 50th percentile of governmental effectiveness in the world. Georgia ranked between 75th and

50th percentiles.

Ensuring the Rights and Freedoms of Citizens3 According to indicators on political and civil rights, these Eastern European countries also fall short on protecting their citizens (See Appendix I). Under Lukashenka’s and Putin’s presidencies on Belarus and Russia, political rights and freedom of expression have been targeted. Elections in these two countries are widely considered to be not free and unfair.4 Crackdowns on media outlets and civil society organizations in the two countries have further restricted citizen expression and participation in politics. Despite UNDP’s and other regional partner’s human rights programs, Belarus and Russia continue to fall behind the Eastern European standards of human rights protection.5 While Ukraine and Georgia have a better record on human rights, there is still room for significant improvement. In particular, after the contested Georgian elections of 2007 and the Georgian-Russian conflict in 2008, Georgia stands at a crossroads between continuing the momentum of

Modest Improvements in Governmental Effectiveness

in Bratislava's Countries of Concern:Belarus Lags Far Behind Other Countries

-1.6

-1.4

-1.2

-1

-0.8

-0.6

-0.4

-0.2

0

1996 1998 2000 2002 2003 2004 2005 2006 2007

Year

Go

ve

rn

me

nta

l E

ffe

cti

ve

ne

ss

Belarus

Georgia

Russia

Ukraine


6

its democracy-building of the mid 2000s and recentralizing.6 Figure 3 shows that in Belarus, Russia and Ukraine less than half of citizens feel that they are free—less than in other regional countries, consolidated democracies like Sweden, and the world average (See Figure 3). Almost 60% of Georgia’s citizens indicate that they feel free, yet this percentage remains below the world average.

Figure 3: Citizens Not Feeling the Effects of Democratization in Eastern Europe

Weak Responsive Relationships between Governments and their Citizens7 As a result of poor rights

protections and ineffective governance, Eastern European nations are characterized by a wider trend: a

lack of responsive governance. The disconnect between governments and their citizens is evident in

almost all sectors, from elections to civil society opportunities and especially vulnerable and opposition

groups. In Georgia, voter dissatisfaction led to a strong opposition movement in 2007 which was harshly

put down by the Saakashvili government. Georgians also voice little confidence in key democratic

institutions such as the court system. In Ukraine, the upper echelons of government remain in a

deadlock and are unable to make significant movement on constitutional amendments on elections,

local governance and anti-corruption. In Russia, the gap between the government and its citizens is

growing as the administration centralizes institutions, thus diluting voice and accountability. In general,

citizens in these four countries do not believe their governments are progressing towards democracy

(See Figure 4), indicating a need for governments to be more responsive to the practical needs of their

citizens.

47

5955

58

47

73

82

44

80

020

40

60

80

Ho

w m

uch

fre

edo

m y

ou fe

el (

%)

Belar

us

Geo

rgia

Hung

ary

Polan

d

Russ

ian

Federa

tion

Slove

nia

Swede

n

Ukr

aine

Unite

d Kin

gdom

Note: The percentages reflect the amount of the population that feels they are free. Red line notes world average.

Source: QoG Dataset, World Values Survey, 2008.

Eastern European Countries Feel Less Free than the Average World Citizen


7

Figure 4: Democracy Progress Slow in Eastern Europe

020

40

60

De

mocr

acy

is d

eve

lopin

g in

ou

r co

un

try

(%)

Belar

us

Geo

rgia

Hung

ary

Polan

d

Russ

ian

Federa

tion

Slove

nia

Swede

n

Ukr

aine

Unite

d Kin

gdom

Source: QoG Dataset, World Values Survey, 2008. Red line indicates world average.

Note: This graph indicates the proportion of citizens that believe democracy is developing in their country.

Populations have less Faith in their Countries' Democratic Progress than the Average World Citizen

Eastern European Countries Have Low Opinion of Democratic Progress


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IV. Causes of Key Challenges

While a myriad of factors contribute to the state of governance in these four countries, three recurring trends may be at the root of the key challenges, including insufficient public engagement with central and formal institutions to ensure governmental accountability; the lack of local institutions and informal outlets for public engagement; and the prominence of corruption in both lower and higher levels of government.

Insufficient public engagement in central and formal governance institutions8: A key concern in

democratic governance in the Eastern European region is the lack of government engagement with the public, as indicated by the voice and accountability scores (Figure 5). Although Georgia and Ukraine have seen upward trends in voice and accountability in recent years, there still remains much room for improvement. In Georgia, improvements to voice and accountability are hindered by crackdowns on opposition politicians and parties while in the Ukraine, public disillusionment with constitutional reforms and judicial independence has reduced confidence in central institutions. Meanwhile, Russia and Belarus continue to struggle in this area and have seen a decline in voice and accountability. Russia’s top-heavy government recently reduced electoral representation with changes in electoral laws and recent elections were marred by harassment of the opposition, biased media coverage, and significant abnormalities in the southern provinces. Belarus’ elections are also controlled by the executive and are marked by fraud and harassment of the opposition. Figure 5: Voice and Accountability in Eastern European Countries


Note: Voice and Accountability measured from -2 to +2. In 2007, all four countries were ranked in or below the

50th

percentile of the world countries in voice and accountability.

Diverging Trends in Voice and

Accountability in Bratislava's Countries of

-2

-1.8

-1.6

-1.4

-1.2

-1

-0.8

-0.6

-0.4

-0.2

0

1996

1998

2000

2002

2003

2004

2005

2006

2007

Years

Voi

ce a

nd A

ccou

ntab

ility

Belarus

Georgia

Russia

Ukraine


9

Figure 6: Level of Competitiveness Drives Local Levels of Stability

Figure 7: Ability to Participate in Politics Also Tied to Higher Political Stability

Low political competition and low engagement are key drivers behind weak voice and accountability. Data shows that contestation and inclusiveness in the political process is significantly linked to higher political stability and is a key characteristic of highly democratized countries to emulate—such as

BLR

GEO

HUN

POL

RUS

SVN

SWE

UKR

GBR-1

01

2

Conte

sta

tion (

Copp

edg

e e

t al.

)

-2 -1 0 1 2Political Stability (World Bank)

Contestation Correlation between variables significant at the 80% confidence level.

Source: QoG Dataset, World Bank Indicators and Coppedge et al., 2008.

Note: Contestation measured from -2 (not competitive) to +2 (competitive). Political stability measured -2 (unstable) to +2 (stable).

Belarus is the Regional Exception

Low Political Competitiveness Contributes to Low Stability

BLR

GEO

HUN

POL

RUS

SVN

SWE

UKR

GBR

.6.8

11.2

1.4

Inclu

siv

enes

s (

Co

pped

ge e

t al.)

-2 -1 0 1 2Political Stability (World Bank)

Inclusiveness Correlation significant at the 95% confidence level.

Source: QoG Dataset, World Bank and Coppedge et al., 2008.

Note: Inclusiveness measured -2 to +2. Political Stability measured -2 to +2.

Inclusiveness Closely Tied to Political Stability


10

Sweden and regional success, Slovenia (Figure 6 and 7). Higher contestation and inclusiveness are key to ensuring the responsiveness of governments to their citizens needs.

Insufficient Outlets for Public Participation9: In addition to the divide between citizens and central government, Eastern European countries also lack adequate informal and local outlets for citizen engagement, including civil society organizations and local government units. Weak local level institutions restrict the channels between governments and their citizens and can also reduce efficient service delivery and administration.10 According to UNDP’s decentralization indicators (See Figure 8 and Appendix IV), there are many opportunities for more political, administrative and fiscal decentralization. While Georgia and Ukraine have made strides towards empowering local communities through local governance, Russia and Belarus has effectively recentralized governance.

Figure 8: Overall decentralization ranking per group of countries

11

Source: UNDP, 2008. Note: Decentralization measured on a scale of 0 (not decentralized) to 4 (effectively

decentralized).

Similarly in the realm of informal outlets, Georgia and Ukraine have active and functioning civil societies

protected by legislation and the courts. These country’s civil societies are often given credit for the

successes of the “colored revolutions” which began new eras of democratic progress. Their successes

can also be linked to higher levels of human rights protections, relatively free and fair elections, and

greater government accountability and effectiveness. However, Belarus and Russia have placed severe

restrictions placed on civil society organizations through excessive administrative barriers and outright

harassment and closure. This limits the informal outlets for public participation which typically promote

government accountability and effectiveness.

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

Cze

ch R

epub

lic

Slova

k R

epub

lic

Slove

nia

Latv

ia

Poland

Rom

ania

Bulgar

ia

Eston

ia

Hun

gary

Lith

uani

a

Alban

ia

Cro

atia

FYR M

acedo

nia

Geor

gia

Mon

teneg

ro

Serbia

Armen

ia

UN

Adm

in. P

rov.

Koso

vo

Rus

sian

Fed

erat

ion

Bosnia

& H

erze

govin

a

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stan

Kyrgy

stan

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dova

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ista

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Turke

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Ukr

aine

Azerb

aija

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Uzb

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Belaru

s

Active Decentralizers Advanced Intermediate Decentralizers Early Intermediate Decentralizers Non decentralizers


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Corruption and Weak Rule of Law:12 As final, significant causal factor of struggling democracy in Eastern

Europe is the prevalence of corruption and weak rule of law. The misuse of public funds and bribing of

officials at all levels of government has severe consequences for government effectiveness,

responsiveness and legitimacy. Although Georgia in particular has made significant strides in anti-

corruption, the issue remains pervasive in the other three countries (See Figure 9 and Appendix VIII).

Only Georgia and Ukraine have implemented or created strategic anti-corruption plans, while Russia and

Belarus efforts remain ad hoc. Belarus showed a significant increase in corruption according to

Transparency International’s corruptions Perceptions Index—falling from 36th to 107th place from 2002

to 2005. Russia currently ranks 143rd out of 180 countries on the TI Index, with indications that lower

level administrative corruption is decreasing while high level political corruption is increasing.13 Weak

rule of law allows ongoing corruption at various levels of government (Figure 10).

Figure 9: Corruption in Eastern Europe


Note: Corruption measured from -2 to +2. In 2007, Belarus and Russia ranked in the 10th

-25th

percentile for

corruption in the world’s countries while Georgia and Ukraine ranked in the 25th

to 50th

percentile.


12

Figure 10: Rule of Law in Eastern Europe


Note: Rule of law measured from -2 to +2. In 2007, Belarus and Russia ranked in the 10th

-25th

percentile for rule of

law in the world’s countries while Georgia and Ukraine ranked in the 25th

to 50th

percentile.

UNDP’s Strategic Priorities for the Bratislava Office

In summary, the key challenges of the region include political instability, ineffective governance, poor rights protection, and unresponsive relationships between governments and their citizens. The primary causes of these challenges include insufficient public engagement with central government institutions to ensure accountability, the lack of local and/or informal outlets for public engagement, and the prominence of corruption and weak rule of law. Figure 11 ranks priorities for UNDP in each of the countries according to the pervasiveness of problems in the sectors, gravity of the challenges, and opportunity for improvement.14 Given its unique position as a UN agency and the political realities of the region, UNDP must carefully maneuver and plan programs to address key concerns. In many cases, this renders programs directly targeting issues like human rights unfeasible in the face of government opposition. Thus, UNDP should focus on gaining influence and key footholds using less polarizing programming such as public administration reform and anti-corruption programs. The priorities circled in red in Figure 11 indicate areas in which UNDP could gain strategic footholds, have a significant impact, and create a regional strategy. The other priorities should not be ignored but are indirectly addressed by the programs this report will recommend.

Low and Volatile Enforcement of Rule of Law in Bratislava's

Countries of Concern

-1.4

-1.2

-1

-0.8

-0.6

-0.4

-0.2

0

1996 1998 2000 2002 2003 2004 2005 2006 2007

Year

Ru

le o

f La

w (

esti

ma

te)

Belarus

Georgia

Russia

Ukraine


13

Figure 11: Priorities for UNDP’s Regional Office

Belarus Georgia Russia Ukraine

Public Administration

Reform/Local

Governance/Anti-

Corruption

3

1

3

1

Human Rights/ Justice 1 1

Representation/

Gender

Media and Civil Society 2 2 2 2

Electoral Reform 3 3

Constitution-Building


14

V. Policy Options and Strategic Programmatic Interventions

The following section presents a range of policy options available to the UNDP within the priority areas identified. Figure 12 summarizes the opportunities available in each of the categories: public administration reform, anti-corruption, local governance, and civil society and media.

Figure 12: Menu of Policy Options

Public administration reform:15 The direct intent of public administration reform is to tackle

government ineffectiveness at its roots. Indirectly public administration reform also promotes

democratic culture, augments government responsiveness to citizens, combats corruption, and

increases transparency and public information. The various mechanisms available include conducting

social audits to identify key public concerns, training and capacity-building of public servants to improve

Program Options

Key Priority Areas

Eastern Europe Region UNDP's Policy Options

Public Administra-tion Reform

Social Audits

Training/ Capacity-building

Legislation on Civil Service

Responsibilities and Processes

Increasing Public Access to Civil

Service (ie. egovernment)

Anti-Corruption

Corruption Commissions

Anti-corruption training/ education

Social Audits

Legislation on Preventing and Punishing Low and High Level

Corruption

Right to Information

Laws and Document

Publication

Local Governance/ Decentraliz-

ation

Political Decentralization

(elections, legislative changes)

Administrative Reform(public

service or policy-making

decentralization)

Fiscal Reform (increased local

revenue and expenditure

responsibilities)

Capacity-building in all three types of

decentralization

Civil Society and Media

Legislation protecting media expression and

NGOS

Capacity-building

Micro-grants to Media and Civil

Society Organizations

Foster dialogue between media, civil society, and the government

Support Watchdog

Organizations


15

service quality, legislation on civil service processes and responsibilities to promote transparent

procedures, and increased public access to civil service. Social audits have been used with success in

other countries to identify citizen needs, including India and Ukraine.16 Innovative approaches to

enhancing public service access include e-government, which has met with success in countries like

Estonia and Bulgaria.17 Currently, UNDP already conducts various forms of public administration reform

in all four countries of concern (See Figure 13 for the full list). See Figure 14 for recommendations.

Anti-corruption programs:18 Anti-corruption programs tackle government misuse of funds, unequal

access to services, and governmental ineffectiveness at its core. Various tools can be used to combat

corruption, including anti-corruption commissions to create strategic plans, anti-corruption

training/education, social audits, passing legislation on preventive or punitive measures, and right to

information legislation and implementation. Georgia is a regional success story in this area, showing

significant improvement over the years through a combination of legislation, training, raising public

awareness, and prosecution.19 While both Georgia and Ukraine have right to information legislation and

strategic plans to combat corruption, Russia and Belarus do not. Russia does have an anti-corruption

working group, but it does not currently have active projects. UNDP does not currently support anti-

corruption projects in Belarus, Georgia and Russia and supports only a trade transparency program in

Ukraine. Anti-corruption is a key area where UNDP can increase its regional impact on democratic

governance. See Figure 14 for a full list of short and long-term recommendations.

Figure 13: Existing UNDP Programs in Priority Areas20

Belarus Georgia Russia Ukraine

Public Administration

Reform

Administrative Procedures

Reform

Capacity-building Fund

Civil Service Registry

Reform

Modernization of the

Finance System

Reforming the Budgeting

Process—Implementing

Performance- based

Budgeting

Civil Service Reform

Anti-Corruption None None None EUBAM Project

(increasing trade

transparency

Local Governance None Strengthening local

governance in vulnerable

regions

Territorial

decentralization support

None None

Media and Civil Society Legal clinic at Belarusian

State University

Promoting Democracy

through the Internet

Increasing Public

Participation in Electoral

Process

Civil Society-State

Relations Project

Consumer Society and

Citizens Networks

Marketing Democracy

Project


16

Local Governance:21 Local governance programming targets the lack of responsiveness to citizen’s

needs as well as increasing voice and accountability. Local governance and decentralization also can

diffuse intergroup tensions, protect the rights of vulnerable groups by increasing their participation in

decision-making and can reduce corruption and government ineffectiveness by increasing transparency

and the quality of local needs assessments. Decentralization encompasses a broad range of governance

restructuring techniques at the political, administrative, and financial levels. Political decentralization

often entails the use of legislation or constitutional amendments and electoral reform to territorially

federalize a nation, allot local representation, and define local government responsibilities.

Administrative decentralization can involve the devolution of public service delivery (often the least

controversial) and/or policy-making to the local governance structures. Financial decentralization refers

to the reassignment of revenue collection and expenditure assignments to the local level. Various

combinations of the decentralization techniques have been used with success in various regional

countries such as Croatia and Macedonia (See Appendix VIII).

With the significant momentum behind democracy in Ukraine and Georgia, there is a window of

opportunity to promote the three forms of decentralization. UNDP already supports local governments

in Georgia and should expand this assistance to Ukraine (See Figure 13). UNDP does not currently

support local governance in Belarus and Russia, likely due to their strong central governance. Therefore,

UNDP should promote incremental decentralization, beginning in the short term with public service

decentralization to build momentum for further decentralization in the future. See Figure 14 for

complete recommendations.

Media and Civil Society: Programming for media and civil society is essential for increasing the

legitimacy and sustainability of democratic governance. By assisting locals with the skills and tools to

monitor, report, and advocate, countries are able to combat problems on their own. A wide range of

programs can be instituted including the easing of restrictive legislation or creation of protective

legislation for media and civil society organizations, capacity building and training for journalists and

non-governmental organizations, micro-grants to media and civil society organizations, promotion of

dialogue between national governments and civil society actors, and the creation or support of

watchdog organizations that can monitor the freedom of media and civil society.

The strong tradition of civil society22 and media involvement in Georgia and Ukraine is supported by

legislative protections and capacity-building opportunities. Thus, these countries are in a key position to

tackle key national challenges, such as constitutional amendments in Ukraine and the electoral process

in Georgia. However, Georgia must strive to regain some media freedom after a 2007 crack-down. Yet

in Russia, media and civil society freedom has regressed due to bans on certain types of programs,

complex registration processes, frequent tax audits, some cyber warfare against opposition internet

sites and the recent Law on Extremism.23 In Belarus the state essentially controls the media and civil

society organizations are faced with restrictive laws. See Figure 14 for recommendations and Appendix

VII for case study on USAID’s ProMedia program in Bulgaria.


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Figure 14: Regional and Country-Specific Recommendations

Public Administration Reform Local Governance/

Decentralization

Anti-Corruption Civil Society and Media

Belarus Short-term: Continue to support

administrative procedures reform

and consider a social audit.

Long-term: Support civil service

capacity-building programs.

Short-term: Promote

decentralization of public service

delivery.

Long-term: Extend decentralization

agenda to fiscal and political

spheres.

Short-term: Propose a commission to

create a strategic anti-corruption plan

and conduct social audit.

Long-term: Promote greater

transparency with right to know

legislation and publication of budget

and program functioning.

Short-term: Promote national

dialogue between the

government and non-

governmental actors.

Long-term: Work to relax

legislation restricting media and

civil society organizations.

Georgia Short-term: Continue to support

the capacity-building fund, civil

service registry reform and

financial modernization.

Long-term: Improve public access

and provide more outlets for

participation through e-

government programs

Short-term: Continue to fund local

governance capacity-building in

vulnerable regions and territorial

decentralization.

Long-term: Promote further

political decentralization supported

by fiscal and administrative

devolution.

Short-term: Continue to provide

strategic and technical advice to

Georgia’s thriving anti-corruption

effort.

Long-term: Promote anti-corruption

education in school curriculums.

Short-term: Continue elections

and media project.

Long-term: Provide training for

NGO workers and journalists and

create a micro-grant project to

fund existing and new

organizations.

Russia Short-term: Increase funding for

performance-based budgeting and

conduct a social audit.

Long-term: Promote egovernment

and local governance to reach local

level with greater public service

efficiency.

Short-term: Promote

decentralization of public service

delivery.

Long-term: Extend decentralization

agenda to fiscal and political

spheres.

Short-term: Provide assistance in

crafting anti-corruption strategy with

existing inter-agency anti-corruption

working group.

Long-term: Promote greater

transparency with right to know

legislation and publication of budget

and program functioning.

Short-term: Promote national

dialogue between the

government and non-

governmental actors.

Long-term: Work to relax

legislation restricting media and

civil society organizations.

Ukraine Short-term: Continue civil service

reform and promote egovernance

projects.

Long-term: Continue to promote

public access to services and

provide capacity-building.

Short-term: Fund local governance

capacity-building.

Long-term: Promote further

political decentralization supported

by fiscal and administrative

devolution.

Short-term: Continue to support

EUBAM project, support government

enactment of “Measures Plan,” and

conduct a social audit.

Long-term: Introduce anti-corruption

education and other forms of

capacity-building.

Short-term: Continue supporting

civil society and citizen networks.

Long-term: Provide training for

NGO workers and journalists and

create a micro-grant project to

fund existing and new

organizations.

Regional

Successes24

Estonia: Use of E-Government

programs to increase service

delivery and transparency. Also

used in Bulgaria.

Ukraine: Social audits for citizen

report cards (Public Affairs

Foundation).

Croatia: Mixture of political, fiscal,

and administrative decentralization

measures implemented. While not

fully implemented yet, the country

is on track to become a EU member

country and scores well above

neighbors in democratic

governance indicators.

Georgia: Anti-corruption strategy

plan, an implementing council,

legislative reforms to promote

transparency in government, training,

and new workplace rules. Significant

improvement since 2003.

Ukraine and Georgia: Mixture of

donors funding civil society and

media capacity-building

programs, media-protecting

legislation, and reduction in

barriers to opening NGOs.

ProMedia Project by USAID

Regional

Partners

Currently

Implementing

Projects in

these Areas25

World Bank

OSCE

OSI

USAID (in Georgia and Ukraine)

World Bank

OSI

EU

World Bank

Transparency International

OSI

EU

World Bank

OSCE

OSI

USAID


18

VI. Conclusions

With democratic and economically prospering European Union neighbors on one side and a legacy of Soviet-style rule on the other, Eastern European countries are currently facing difficult transitions to democratic governance. While challenges exist in the sectors of human rights/justice, electoral processes and constitution-building, by focusing on public administration, local governance, anti-corruption, and civil society issues, the UNDP can promote internalized and more sustainable democratic change that will initiate and support further reforms in other areas.

Figure 16: Summarized Recommendations

UNDP Office Recommendations for Priority Areas of Democratic Governance

Bratislava Create a strategic funding and program plan for the region based on key challenges

and political feasibility.

Build a regional strategy based on shared concerns such as public administration

reform, local governance, anti-corruption, and civil society and media supplemented

with country-specific targets to fill in existing UNDP programmatic gaps.

Engage regional partners such as USAID, the World Bank, and other development

agencies and NGOs where appropriate to maximize the potential for program

success.

Belarus Focus on politically feasible programs targeting public administration reform, local

service delivery and corruption in order to gain foothold in the country.

Georgia Capitalize on existing momentum in anti-corruption, local governance and public

service delivery and build up existing civil society and media to support other

democratic reforms.

Russia Focus on politically feasible programs targeting public administration reform, local

service delivery, and corruption and assist support networks of media and civil

society to promote transparency and accountability.

Ukraine Capitalize on existing momentum in local governance and public service delivery b

building up existing civil society and media to support other democratic reforms.


19

VII. Technical Appendix

Appendix I: Regime Indictors

Country Name Civil Liberties

(Freedom

House)

Political Rights

(Freedom House)

Freedom House

Status

Regime Type

(Cheibub Gandhi

Regime)

Polity Regime

Type (Polity IV)

Belarus 6 6 Not Free Dictatorship -7

Georgia 4 4 Partly Free Dictatorship 5

Russian Federation 5 5 Partly Free Democracy 7

Ukraine 4 4 Partly Free Democracy 7

* Source: QoG dataset, 2008. Countries are graded between 1 (most free) and 7 (least free) for Freedom House measures and on a scale of -10 (strongly autocratic) to +10 (strongly democratic) for Polity.


20

Appendix II: Human Development Report 2007 Data

Indicators Belarus Russian Federation Ukraine Georgia

Human development index value

2005 0.804 0.802 0.788 0.754

Life expectancy at birth, annual estimates (years)

2005a 68.7 65.0 67.7 70.7

Adult literacy rate (% aged 15 and older)

1995-2005b 99.6 e 99.4 e 99.4 e 100.0

GDP per capita (PPP US$)

2005 7,918 10,845 6,848 3,365

GDP per capita, annual growth rate (%)

1975-2005 2.2 g - 0.7 g - 3.8 g - 3.9

1990-2005 2.2 - 0.1 - 2.4 0.2

Public expenditure on health (% of GDP)

2004 4.6 3.7 3.7 1.5

Public expenditure on education (% of GDP)

1991 5.7 3.6 6.2 ..

2002-05c 6.0 3.6 h 6.4 2.9

Military expenditure (% of GDP)

1990d 1.5 i 12.3 .. ..

2005d 1.2 4.1 2.4 3.5

Gender-related development index (GDI) value

2005 0.803 0.801 0.785 ..

Notes: a. The HDI rank is determined using HDI values to the sixth decimal point. b. Data refer to national literacy estimates from censuses or surveys conducted between 1995 and 2005, unless otherwise specified. Due to differences in methodology and timeliness of underlying data, comparisons across countries and over time should be made with caution. For more details, see http://www.uis.unesco.org/. c. Data refer to the most recent year available during the period specified. d. Because of limitations in the data, comparisons across countries should be made with caution. For detailed notes on the data see SIPRI (Stockholm International Peace Research Institute). 2007c. SIPRI Yearbook: Armaments, Disarmaments and International Security. Oxford, U.K.: Oxford University Press. e. For purposes of calculating the HDI, a value of 99.0% was applied. f. UNICEF (United Nations Children’s Fund). 2004. State of the World’s Children 2005. New York. g. Data refer to a period shorter than that specified. h. National or UNESCO Institute for Statistics estimate. i. Data refer to the closest available year between 1991 and 1992. Source: column 1: calculated on the basis of data in columns 6-8; see Technical note 1 for details. column 2: UN (United Nations). 2007e. World Population Prospects 1950-2050: The 2006 Revision. Database. Department of Economic and Social Affairs, Population Division. New York. Accessed July 2007, unless otherwise specified. column 3: UNESCO (United Nations Educational, Scientific and Cultural Organization) Institute for Statistics. 2007a. Correspondence on adult and youth literacy rates. May. Montreal, unless otherwise specified. column 4: World Bank. 2007b. World Development Indicators 2007. CD-ROM. Washington, D.C., unless otherwise specified; aggregates calculated for HDRO by the World Bank. column 5: World Bank. 2007b. World Development Indicators 2007. CD-ROM. Washington, D.C.; aggregates calculated for HDRO by the World Bank. column 6: World Bank. 2007b. World Development Indicators 2007. CD-ROM. Washington, D.C.; aggregates calculated for HDRO by the World Bank. column 7: World Bank. 2007b. World Development Indicators 2007. CD-ROM. Washington, D.C. column 8: UNESCO (United Nations Educational, Scientific and Cultural Organization) Institute for Statistics. 2007b. Correspondence on education expenditure data. April. Montreal. column 9: UNESCO (United Nations Educational, Scientific and Cultural Organization) Institute for Statistics. 2007b. Correspondence on education expenditure data. April. Montreal. column 10: SIPRI (Stockholm International Peace Research Institute). 2007b. Correspondence on military expenditure. March. Stockholm. column 11: SIPRI (Stockholm International Peace Research Institute). 2007c. SIPRI Yearbook: Armaments, Disarmaments and International Security. Oxford, U.K.: Oxford University Press. column 12: calculated on the basis of data in columns 3–10; see Technical note 1 for details.


21

Appendix III: Indicators Used in this Report26 Source Indicator(s) Benefits Drawbacks

World Bank Institute

1) Political Stability Estimate: measures perceptions that the government will be destabilized or overthrown by unconstitutional and/or violent means. 2) Rule of Law Estimate: “the extent to which people have confidence in and abide by the rules of society” 3) Government Effectiveness Estimate: indicates the “inputs required for the government to produce and implement policies and deliver public goods”

Widely acknowledged source and indicators

Derived from multiple sources with allowance for standard errors

All countries under the scope of this report are recorded individually (i.e. separate indicators for Kosovo and Montenegro)

No consideration of civil and political rights in governance definition

Potential unreliability of conceptual concepts across individual indicators compiled in the aggregate estimates

Freedom House 1) Political Rights: measures the right to participate freely in the political process 2) Civil Liberties: measures “the freedoms of expression and belief, associational and organizational rights, rule of law, and personal autonomy without interference *of+ the state” 3) Status: combining the measures of political right and civil liberties, the status of a country is rated as free, partly free, or not free.

Widely used in literature and reports as well as by other indicators

Measures civil liberties and political rights as a part of governance

Accounts for gradations of democracy, yielding more detailed analysis

Lists of rights used to has changed over time rendering comparisons unreliable

Some OSCE members may object to the rights-based concept of governance

Polity IV 1) Combined Polity Score: ranks regimes from +10 (strongly democratic) to -10 (strongly autocratic). 2) Polity fragmentation: The operational existence of a separate polity, or polities, comprising substantial territory and population within the recognized borders of the state and over which the coded polity exercises no effective authority (effective authority may be participatory or coercive).

Slight fragmentation indicated under 10%

of country subject to local authority,

moderate fragmentation is 10-25%, and

serious fragmentation is25-50%, state

failure results at 50%+.

Accounts for gradations in the level of democracy, allowing for more detail

Widely used in literature and reports as well as by other governance indicators

Objective and replicable

No polity score for Bosnia-Herzegovina as it is classified as a case of foreign interruption

Non-transparent assessment by experts

Excludes civil liberties

Some conceptual vagueness

Cheibub and Gandhi

1) Regime Type: a dichotomous assessment of whether a country is a democracy or a dictatorship

Highlights the acute problem areas

Quick and clear regime description

Can oversimplify the governance context and be subject to false positive or false negative results

Lacks diplomatic utility and may encounter resistance from national leaders

World Values Survey27

1) How much freedom do you feel?: measures the percentage of people who believe they are free in the country. 2) Belief that democracy is advancing: measures “the degree to which citizens feel their country is becoming more democratic”

Portrays a view from the citizens’ perspectives

Widely used data source seen as legitimate

Useful to measure program implementation and progress of certain agendas

Potential for response bias if citizens are afraid to speak negatively of their government

Respondents have different definitions of concepts

Time series data is limited.

Data missing for some countries in this report


22

Coppedge et al. 28

1) Inclusiveness: measures “the

variation in the proportion of the

population entitled to participate

on a more or less equal plane in

controlling and contesting the

conduct of the government. “

Measured on a scale from -2 (not

inclusive) to +2 (inclusive).

2) Contestation: measures the

ability of citizens to contest the

decisions made by their

government.

Uses existing accepted indicators (Polity and Freedom House)

Times series and wide coverage of countries

Measures equality in participation and rights

Accounts for political party trends and elections results

Subject to the expert bias of indicators used (Polity and Freedom House)

Subject to the conceptual non-equivalence of indicators used


23

Appendix IV: Decentralization in Europe, UNDP Measures Methodology for the ranking of countries according to their level of decentralization

29

Scores from 01 to 04

Political Decentralization

Indicator: Existence of elected sub-national tiers

NO sub-national tiers with elected sub-national assemblies and executives 1

ALL or SOME sub-national tiers with elected assemblies but ALL with executives

Appointed by central government 2

SOME BUT NOT ALL sub-national tiers with elected assemblies and executives 3

ALL sub-national tiers with elected assemblies and executives 4

Administrative Decentralization

Indicator 1: Assignment of expenditure responsibilities between the central and the local governments in the law and actual

implementation of the law

No specification of different responsibilities 1

Legal framework exists but it is not clear 2

Clear legal framework exists but it is not implemented 3

Clear legal framework exists and it is implemented 4

Indicator 2: Actual primary responsibility for public service delivery

Centre 1

Significant deconcentration 2

Some devolution 3

Substantial devolution 4

The index of administrative decentralization consists of the mean of indicators 1 and 2

Fiscal Decentralization


24

Indicator 1: Arrangements for fiscal transfers from the central to the local governments

None 1

Ad hoc 2

Formula in theory but not implemented or formula with arbitrary element built-in 3

Transparent formula implemented 4

Indicator 2: Local Expenditure as a percentage of Total Public Expenditure

< 15% 1

16 to 25% 2

26 to 35% 3

> 36% 4

The index of fiscal decentralization consists of the mean of indicators 1 and 2

Overall Decentralization: The average of all the indicators used above.

Overall decentralization ranking per sub-region30

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

Cze

ch R

epub

lic

Slova

k R

epub

lic

Slove

nia

Latv

ia

Poland

Rom

ania

Bulgar

ia

Eston

ia

Hun

gary

Lith

uani

a

Alban

ia

Cro

atia

FYR M

acedo

nia

Mon

teneg

ro

Serbia

UN

Adm

in. P

rov.

Koso

vo

Bosnia

& H

erze

govin

a

Turke

y

Geor

gia

Armen

ia

Rus

sian

Fed

erat

ion

Mol

dova

Ukr

aine

Azerb

aija

n

Belaru

s

Kazakh

stan

Kyrgy

stan

Tajik

ista

n

Uzb

ekista

n

Turkm

enist

an

Central & Eastern Europe Western Balkans & Turkey Western CIS & Caucasus Central Asia


25

Ranking of countries according to their level of political, administrative and fiscal

decentralization

Graph 1 - Extend of Political Decentralization per Sub-Region

0

0.5

1

1.5

2

2.5

3

3.5

4

Bulgar

ia

Cze

ch R

epub

lic

Eston

ia

Hun

gary

Latv

ia

Lith

uania

Slova

k Rep

ublic

Slove

nia

Poland

Rom

ania

Alban

ia

Bosnia &

Her

zegov

ina

Cro

atia

FYR M

acedo

nia

Mon

teneg

ro

Serbia

Turke

y

UN A

dmin. P

rov.

Koso

vo

Armen

ia

Azerb

aijan

Belaru

s

Geor

gia

Moldo

va

Rus

sian

Fed

erat

ion

Ukr

aine

Kazakh

stan

Kyrgy

zsta

n

Tajik

istan

Turkm

enist

an

Uzb

ekista

n

Inde

x S

cor

e


Graph 2 - Extend of Administrative Decentralization per Sub-Region

0

0.5

1

1.5

2

2.5

3

3.5

4

Bulg

aria

Czec

h Republic

Estonia

Hungary

Latvia

Lithuania

Slovak

Republic

Slovenia

Pola

nd

Rom

ania

Albania

Bosn

ia &

Herz

egovina

Cro

atia

FYR M

acedonia

Monte

negro

Serb

ia

Turkey

UN A

dmin

. Pro

v. K

osovo

Arm

enia

Aze

rbaija

n

Bela

rus

Georg

ia

Mold

ova

Russ

ian F

edera

tion

Ukra

ine

Kaza

khsta

n

Kyr

gyzs

tan

Tajikista

n

Turkm

enista

n

Uzbe

kista

n

Ind

ex

Sc

ore



26

Graph 3 - Extent of Fiscal Decentralization per Sub-Region

0

0.5

1

1.5

2

2.5

3

3.5

4

Bulgar

ia

Cze

ch R

epub

lic

Eston

ia

Hun

gary

Latv

ia

Lith

uani

a

Slova

k R

epub

lic

Slove

nia

Poland

Rom

ania

Alban

ia

Bosnia

& H

erze

govin

a

Cro

atia

FYR M

acedo

nia

Mon

teneg

ro

Serbia

Turke

y

UN

Adm

in. P

rov.

Koso

vo

Armen

ia

Azerb

aija

n

Belaru

s

Geor

gia

Mol

dova

Rus

sian

Fed

erat

ion

Ukr

aine

Kazakh

stan

Kyrgy

zsta

n

Tajik

ista

n

Turkm

enist

an

Uzb

ekista

n

Inde

x S

cor

e



27

Appendix V: Regional Partners and their Existing Projects USAID World Bank OSCE Other Aid Agencies

Belarus Eurasia Foundation Program (increasing civil society participation)

Focus on program budgeting in Belarus

Encourages third party engagement and monitoring of World Bank projects in Belarus

Civil Society Fund

Fostering dialogue between the government and civil society

Capacity-building for government workers

Public discussions on freedom of information and the use of the internet

Gender equality

EU (has offered re-engagement plan to the government)

OSI

Georgia Elections assistance Increasing governance

efficiency through technology

Communities Empowered for Local Empowerment Project

Parliament and political party strengthening

Civil society dialogue Justice sector

reorganization

Public sector financial management reform

Support to electoral commission and civil society watchdog groups

Parliamentary reform for more competitive government

Training for journalists Civil registry reform Making legislation process

more transparent

EU IMF DFID (funding only) SIDA Netherlands Ministry

for Development Cooperation

Romania Poland OSI

Russia Local governance and public service delivery projects

Community development for a stronger civil society

Elections monitoring Politician training Media training Increasing political

participation Monitoring corruption in

elections

Judicial reform Customs development Treasury development Improving central and

local government fiscal relations

None Transparency International (joint World Bank program)

DFID (funding only) OSI

Ukraine Capacity-building for civil society and the media

Creating a more effective and more transparent parliamentary process

Supporting political competitiveness through capacity building and monitoring

Monitoring and capacity building for courts and

Administrative and civil service reforms

Evidence based program management

More transparent budgeting procedures

More efficient service delivery

Promoting gender equality Increasing public

participation in decision-making

Support media legislation Strengthening the electoral

process Micro-grants and capacity

building for civil society organizations

Using E-government to combat corruption

EU SIDA DFID (funding only) Denmark Netherlands Germany Slovak Republic Poland Japan Switzerland OSI


28

Appendix VI: General Indicators Indicators of good governance, by world region, 2006

Voice and accountability

2006

Political stability

2006

Government regulatory quality

2006

Rule of law

2006

Corruption 2006

N. of states

Industrialized 1.35 0.88 1.39 1.46 1.62 30

C & E Europe -0.10 -0.11 -0.01 -0.33 -0.31 26

Latin America & Caribbean 0.26 -0.01 0.04 -0.20 -0.04 33

East Asia -0.76 0.15 -0.58 -0.32 -0.61 4

SE Asia & Pacific -0.07 0.40 -0.27 0.09 -0.30 23

South Asia -0.69 -0.88 -0.28 -0.19 -0.44 7

Africa -0.59 -0.51 -0.75 -0.74 -0.65 49

Arab states -0.97 -0.61 -0.26 -0.16 -0.11 18

World -0.05 -0.05 -0.06 -0.06 -0.05 190

Note: The indicators range from -2.0 (negative ratings) to +2.0 (positive ratings).

Source: Kaufmann-Kray World Bank Institute Indicators of Good Governance, 2006.www.worldbank.org. Originally

created by Pippa Norris.

Appendix VII: Policy Options Case Studies

Political Decentralization Case Study: Macedonia31

UNDP identified Macedonia’s decentralization agenda as the most active and promising regional

example of political decentralization. Macedonia is one of only two countries in the Balkan region that

has created a multiyear, strategic plan for decentralization. Still, like other Balkan states, Macedonia

pursues its decentralization strategy in a highly fragmented and ethnically-charged context. Yet, instead

of being paralyzed by ethnic divisions that co-opt decentralization, as in near neighbor Bosnia-

Herzegovina, the country has used political decentralization to diffuse ethnic tensions.

Avoiding civil war at the time of the break-up of Yugoslavia, Macedonia adopted a new constitution in

1991 with a unitary system governed by a parliamentary democracy with executive, legislative, and

judicial branches. The constitution recognized the right to local self-governance but the government

proceeded to centralize powers in the early 1990s. The constitution created a central government level

and a local government level with 84 municipalities and the capital territory of Skopje. In the later

1990s decentralization programs began with new laws on local self-governance passed in 1995 and

1996, the European Charter on Local Self-Government ratified in 1997, and the decentralization

program articulated in the Government Program and the Government Strategy for Reforming Public

Administration in 1999.


29

In early 2001, ethnic tensions erupted between the Albanian minority and Macedonia majority over

political power and minority rights during which several people were killed and thousands of people

were displaced. The Ohrid Framework Agreement (OFA) ending the violence also included details of

further political decentralization, public service decentralization, and central-local relationships. While

devolving significant political and public service powers to the local level, the Ohrid Framework

Agreement specifically rejected an ethnically based territorial solution to local governance. Thus, the

agreement emphasizes the unitary nature of the state of Macedonia while ensuring that all citizens and

especially minorities have greater voice in the local functioning of government and public services. The

OFA also outlined new decision-making procedures including require dual majority of votes for passing

laws of special interest for ethnic communities.

While much remains to be done in Macedonia in synchronizing the three spheres of decentralization

and promoting political stability, the political decentralization under the OFA and other arrangements

has prevented wide-scale violence or governmental collapse experienced by other nations in the

Balkans.

Fiscal and Administrative Decentralization Case Study: Croatia32

Since the early 1990s, Croatia’s decentralization progress has been largely political and ad hoc, leading

to fragmentation and inefficiency in local governance structures. However, according to UNDP, Croatia

has a high potential for successful decentralization given its relatively high per capita income and large

public sector. Recent improvements indicate that Croatia may soon become a regional model for

decentralization incorporating all three spheres of political, administrative, and fiscal decentralization.

Before the dissolution of Yugoslavia, the Croatian state had 118 local governments with a significant

amount of autonomy. After independence in the early 1990s, while Croatia initially embarked upon

state centralization the local governance structure split 118 areas into 426 municipalities, putting a high

strain on local financial, administrative, and human resources. Despite calls by some for local

consolidation of municipalities, the central government claims strong political opposition to redrawing

local government territories—a similar problem albeit on a smaller scale to the proposed redrawing of

politically decentralized entities in Bosnia-Herzegovina.

Croatia currently has three levels of governance: the central state, 20 counties (also called districts), and

426 municipalities. A 2000 constitutional amendment deconcentrated regional authorities and defined

the responsibilities of municipal governments as environmental and urban planning, pre-school

education, culture, sports, primary health care, fire-fighting, and social welfare. The Local Government

Act of 2002 further defined county responsibilities as regional policy coordinators between

municipalities and providers of services in the realms of elementary and secondary education, health

care, social welfare, economic development, zoning and urban planning, transportation and

infrastructure. In 2004 a Decentralization Commission was established to strengthen the legislative

framework for decentralization by amending the Law of Local Self-Government, the Law on Local

Elections and the Law on Territorial Structure.


30

Although the focus in Croatia has been political decentralization, these recent legislative and

administrative changes have devolved a significant amount of responsibility of service delivery and

increased fiscal responsibility for these functions. The Law on Financing Local and Regional Self-

Governing Units and other legal documents create a public revenue assignment system based on non-

shared state taxes (such as customs duties, excise and VAT taxes), shared state taxes (revenues split

between the central and local government, including the personal income tax and the corporate income

tax), and local own source taxes and fees (including inheritance/gift taxes, motor vehicle licenses,

consumption tax, and trade permits). The Croatian government also uses intergovernmental transfers

to offset unequal regional development and revenue generation, although criticisms have been made

about the lack of local accountability and central oversight of this transfer system. Local borrowing is

also permitted under the regulation and limitations of the Budget Law.

Although there are still many flaws and inefficiencies in Croatia’s administrative and fiscal

decentralization programs largely due to its ad hoc nature, local governments are unique in the region in

that they are permitted real administrative responsibilities and fiscal opportunities to support local

governance. As UNDP urges, the next priority is not pursuing more decentralization but to “rationalize

the structure that has emerged.”33

Case Study of Civil Service and Anti-Corruption Tools: Ukraine Social Audits34

Despite a relatively strong civil society presence in Ukraine, there are still some gaps between the

citizens and the government. To improve citizen voice and to increase government responsiveness

UNDP supported along with other organizations a social audit process that yielded government reports

cards in Ukraine. The program sought to close these lapses in communication, increase public

confidence in state institutions, increase public consultation in state decision-making, and to provide a

form of capacity building for local civil society organizations to conduct similar audits in the future.

The audit took the form of surveys distributed in various Ukrainian cities and was monitored by local

civil society and a council representing a wide cross-section of Ukrainian society, including women,

youth, and minorities. Prior to conducting the audit, organization received training in survey

administration and design and policy formation based on results found. The survey questioned the local

population and businesses about their satisfaction and experiences with public services, including

questions on corruption.

After the survey data was collected and compiled into a report card form, civil society organizations

organized media campaigns to publicize the findings and promote local and national dialogue. This

dialogue continued at a more formal level in a series of town level community meetings and in advisory

councils made up of government and NGO leaders.

The results of the program are successful in all pilot communities. The social audits have increased the

interaction and cooperation between NGOs and local government and provided citizens with a platform


31

to voice concerns and suggestions for improvement. In one pilot community the audits resulted in the

creation of citizen task forces and the creation of service centers where citizens can pay for all municipal

services in one place. Overall, the program has increased governmental transparency and promoted

cooperative relations between civil society and the Ukrainian government.

Case Study on Anti-corruption and Public Administration Reform:

Georgia’s Post-Revolution Reforms35

Georgia has been heralded by many as a model of success in the region, moving from weak democratic

governance to a regionally higher performer in the areas of governmental effectiveness, voice and

accountability, and rule of law. Most significant is Georgia’s success in the anti-corruption, having

realized significant improvements according to World Bank and Transparency International indicators

since 2003.

Successful anti-corruption programming is often attributed to the Saakashvili administration which has

tackled corruption on many fronts. In particular, success has been linked to internal changes in the

government’s structure. One of the first moves to combat corruption was public administration reform

and the downsizing of the government workforce by up to 50% in some agencies and bureaus, including

the “power ministries” like the Interior Ministry, State Security Ministry, and the Ministry of Defense.

The downsizing sought to reduce nepotism and allow for higher salaries to attract qualified candidates

for government positions, especially in the police force, judiciary, and customs. State representatives

also received a salary increase of up to ten times and increased pensions to prevent bribe-taking.

Salaries are regularly paid on time and in full. The salary increase was supported by a fund created by

UNDP and the Open Society Institute.

Another part of Georgia’s anti-corruption strategy including the reducing of tax burdens and of state

bureaucratic procedures. Bureaucratic processes specifically targeted the licensing system for

businesses, cutting the number of activities requiring a license from 909 to 105. Caucaz Net reports that

as a result of this policy there has been an increase in tax collection causing state revenues to more than

double.

At the central level, Georgia articulated its plans in a 2005 National Anti-Corruption Strategy. In addition

to supporting structural changes and procedural reform, the plan sought to promote meritocracy in

government hiring and patronage. In January 2009, the government established a new anti-corruption

council. This council, led by the current Minister of Justic, is tasked with updating the 2005 action plan.

Public Administration Case Study: E-Government in Estonia36

Upon independence in 1992, the Estonian government began plans to open government actions up to

the public through technology. In 2000, the Estonian government began broadcasting cabinet and other

meetings on the internet. In addition, cabinet members can attend meetings by telecommuting,


32

allowing them to attend more meetings while they travel to various parts of the country. In addition to

real time transparency of government decision-making, cabinet decisions are also posted to the internet

site within 30 seconds. The Estonian government also has created various online forums for citizens to

comment on and suggest ideas to the government, including the portal call “Today, I Decide.”

The benefits of e-government have been remarkable in Estonia. Since independence, the government

administrations have included reached out to the younger generation and more young policymakers are

involved in government, bringing with them new forms of government innovation. Citizens also appear

to be satisfied with increased government transparency and accountability that e-government has

created in the formerly closed system. The government also reports higher efficiency since the

institution of e-government—reporting that cabinet meetings that once ran ten hours now regularly

take 45 minutes. The government also reports that proposals from the citizens on government websites

have led in several cases to legislative changes. Estonia was also ranked by a Harvard University study as

the 5th most developed e-government in the world.

The e-governance model is one that can also be transplanted in other parts of Eastern Europe. Estonia

has started an e-government academy in conjunction with UNDP and the Soros Foundation to teach

other countries how to develop similar systems and tailor them to their countries’ needs. However,

some hindrances to the system exist including the national access to internet and citizens’ computer

skills. To increase the effectiveness of e-government in other Eastern European countries, UNDP must

partner with regional NGOs to promote citizen capacity building and to increase internet access.

USAID’s ProMedia Project in Eastern Europe37

One regional partner in UNDP’s media strengthening projects could be USAID’s Pro Media Program. The

program provides funding a support for capacity-building and micro grants to media organizations to

promote greater public information access and higher standards of reporting and journalism. Their

capacity building programs include workshops and journalist exchanges within participating countries.

The program also targets journalists reporting on political corruption with special grants. The program

also intends to develop an online capacity-building site with case studies, training courses, key contacts

and reference sources, news and links to other sources of information on independent media and

support.

Pro Media has supported media programs in the past in the past in Ukraine and Georgia as well as the

former Yugoslavian countries, Bulgaria and other Eastern European countries. ProMedia is currently

working in Belarus to support the creation of independent media outlets. Successes in the region

include Bulgaria where ProMedia assisted the government in creating legislative protections for

journalists, supporting right to public information acts, assisted in creating professional media

associations, and provided training to journalists to cover legal and democratic governance stories. As a

result Bulgaria developed a media training center which produces and airs a regular anti-corruption

television show.


33

VIII. Endnotes

Published Sources

Alberti Adriana and Fatma Sayed. “Challenges and Priorities in Reforming Governance and Public Administration

in the Middle East, Northern Africa, and Western Balkans.” DPADM Discussion Paper. United Nations,

2007.

Batt, Judy. 2003. “Introduction: Defining Central and Eastern Europe.” Developments in Central and Eastern

European Politics. Eds. Stephen White, Judy Batt, and Paul G. Lewis. Durham: Duke University Press.

Collier, David and Robert Adcock. 1999. “Democracy and dichotomies: A pragmatic approach to choices about

concepts.’’ Annual Review of Political Science 1: 537-565.

De Vries, Michiel. “The Rise and Fall of Decentralization: A Comparative Analysis of Arguments and Practices in

European Countries.” European Journal of Political Research, Vol. 38 (2000): pp. 193-224.

Devas, Nick and Simon Delay. “Local Democracy and the Challenges of the Decentralising State: An International

Perspective.” Local Government Studies, Vol. 32, No. 5 (Nov. 2006): pp. 677-695.

Elkins, Zachary. 2000. “Gradations of Democracy? Empirical tests of alternative conceptualizations.” American

Journal of Political Science 44 (2): 293-300.

International Crisis Group. “Georgia: Sliding Towards Authoritarianism?” Europe Report N. 189. 19 December

2007. Online at www.crisisgroup.org.

Ibid. “Russia and Georgia: The Fallout.” Europe Report N. 195. 22 August 2008. Online at www.crisisgroup.org.

Krishna, Anirudh. “How Does Social Capital Grow?: A Seven Year Study of Villages in India.” Journal of Politics Vol.

69 No. 4 (November 2007): pp. 941-956.

Nodia, Ghia. “Nations in Transit: Georgia.” Freedom House 2008. Online at www.freedomhouse.org.

Norris, Pippa. 2008. ‘The Globalization of Comparative Public Opinion Research.’ For the Sage Handbook of

Comparative Politics Eds. Neil Robinson and Todd Landman. London: Sage Publications. Available at

www.pippanorris.com.

Ibid. Driving Democracy. New York: Cambridge University Press, 2008.

OSCE. Online country pages for Belarus, Georgia, Russia, and Ukraine. Online atwww.osce.org.

Ibid. “Chapter Seven: Federalism and Decentralization.” Driving Democracy. Cambridge: Cambridge University

Press, 2008.

Orttung, Robert W. “Nations in Transit: Russia.” Freedom House 2008. Online at www.freedomhouse.org.

Rodden, Jonathan. “Comparative Federalism and Decentralization: On Meaning and Measurement.” Comparative

Politics, Vol. 36, No. 4 (Jul. 2004): pp. 481-500.

Silitski, Vitali. “Nations in Transit: Belarus.” Freedom House 2006. Online at www.freedomhouse.org.

http://arjournals.annualreviews.org.ezp1.harvard.edu/doi/abs/10.1146/annurev.polisci.2.1.537



http://web.ebscohost.com.ezp-prod1.hul.harvard.edu/ehost/detail?vid=4&hid=109&sid=dd0e11fa-6638-4bfd-8326-af688cab65a2%40sessionmgr103&bdata=JnNpdGU9ZWhvc3QtbGl2ZSZzY29wZT1zaXRl#db=aph&AN=2888948

http://www.pippanorris.com/


34

Shushko, Oleksandr. “Nations in Transit: Ukraine.” Freedom House 2008. Online at www.freedomhouse.org.

Teorell, Jan, Soren Holmberg & Bo Rothstein. 2008. The Quality of Governance Dataset Codebook, version

15May08. University of Gothenburg: The Quality of Government Institute, www.qog.pol.gu.se.

Treisman, Daniel. The Architecture of Government: Rethinking Political Decentralization. Cambridge: Cambridge

University Press, 2007.

Ibid. 2007. ‘What have we learned about the causes of corruption from ten years of cross-national empirical

research?’ Annual Review Of Political Science 10: 211-244 2007.

Tusalem, Rollin F. “A Boon or Bane?: The Role of Civil Society in Third- and Fourth-Wave Democracies.”

International Political Science Review (2007) Vol. 28 No. 3: pp.361-386.

UNDP. 2008. “Strengthening Democratic Institutions in Eastern Europe and the Commonwealth of Independent

States.” Annual Report of UNDP’s Regional Democratic Governance Practice. www. undp.org.

Ibid. 2008. “Decentralization in Europe and the CIS.” Discussion Paper on Democratic Governance Practice.

Bratislava, 2008. Online at http://europeandcis.undp.org/governance/.

Ibid. Human Development Report. New York: United Nations Development Programme. 2007.

Ibid. “Fiscal Decentralization in Transition Economies: Case Studies from the Balkans and Causasus.” Bratislava.

Online at www.undp.org/europeandcis. 2005.

Ibid. “Country Programme Document for Belarus (2006-2010). Online at www.undp.org.

Ibid. “Draft Country Programme Document Between the Republic of Georgia and the UNDP (2006-2010). Online at

www.undp.org.

Ibid. “Country Programme Outline for the Russian Federation (2004-2007). Online at www.undp.org.

Ibid. “Country Programme for the Russian Federation (2008-2010). Online at www.undp.org.

Ibid. “Country Programme Action Plan (2006-2010) Between the Government of Ukraine and the UNDP. Online at

www.undp.org.

USAID. “Indicators of Decentralization from USAID’s Decentralization and Democratic Local Governance

Handbook.” Online at www.usaid.gov.

Ibid. Country pages for Belarus, Georgia, Russia, and Ukraine. Online at www.usaid.gov.

World Bank Country pages for Belarus, Georgia, Russia, and Ukraine. Online at www.worldbank.org.

http://www.qog.pol.gu.se/



http://europeandcis.undp.org/governance/

http://www.undp.org/europeandcis

http://www.undp.org/



35

Data Sources International IDEA. Voting Turnout since 1945. www.IDEA.int

Kaufmann, Daniel and Art Kraay. World Bank Institute. Good Governance. www.worldbank.org

Quality of Governance (QoG) dataset. 2008. www.qog.pol.gu.se

UNDP. 2007 Development Report online indicators. www.undp.org

World Values Survey, 1981-2005. http://www.worldvaluessurvey.org/

1 Recent developments taken from the Freedom House reports of 2008 for all four countries and the UNDP

situation assessments from the most recent UNDP country program papers. See the published sources for more

information.

2 See the Freedom House reports of 2008 for all four countries and the UNDP situation assessments from the most

recent UNDP country program papers. See the published sources for more information.



4 In the most recent Russian elections, the OSCE even refused to monitor due to high restrictions and obstruction

by the Russian government.

5 A red flag for Russian human rights is a recent, large increase in the number of Russian claimants at the European

Court of Human Rights.

6 For more on Georgia’s unique position and the events of 2007 and 2008, see International Crisis Group’s two

reports on Georgia listed in the references.





9 For more on the benefits of decentralization and civil society see Norris (2008), Alberti, and Tusalem.

10 See literature on decentralization by Alberti and Norris for more on the link between government effectiveness

and local governance/decentralization.

http://www.idea.int/

http://www.worldbank.org/

http://www.qog.pol.gu.se/


http://www.worldvaluessurvey.org/


36

11 UNDP. “Decentralization in Europe and the CIS.” Discussion Paper on Democratic Governance Practice.

Bratislava, 2008. Online at http://europeandcis.undp.org/governance/. “In order to obtain an overview of the

status of decentralization in the Europe and CIS region a methodology was devised to rank countries according to

their level of decentralization on the basis of five indicators: one for political decentralization, two for

administrative decentralization and two for financial decentralization. For each indicator countries scored 1 to 4

points (1 for the lowest level of decentralization and 4 for the highest). A composite index consisting of the

average of the scores for the five indicators mentioned above was created to rank countries according to their

overall level of decentralization.” (p.10)

12 For more on the effects of corruption, see Norris, STM 103 class presentation on corruption and Treisman

(2007). See Freedom House and UNDP’s country reports and programs for more details in each country.

13 Freedom House, Russia report, 2008.

14 Essentially, ranking were determined by looking at low scores in the World Bank aggregate indicators and

qualitative contextual evidence from the Freedom House and UNDP country reports. Given the gravity of human

rights abuses, these were marked as a top challenge in the countries where basic rights were not protected de jure

and/or de facto, such as Belarus. Further prioritization was determined given the recurring mentions of key

problems in the literature on each country.

15 For more on public administration reform programs see the April 6th

, 2009 Presentation Notes for STM 103 at

www.pippanorris.com.

16 See Appendix VII for more information on Ukrainian social audits.

17 See Appendix VII for case a case study of egovernance.

18 For more on corruption and anti-corruption programs see Treisman (2003) and the April 6

th 2009 Presentation

Notes for STM 103 at www.pippanorris.com.

19 See Appendix VII for more on Georgia’s anti-corruption program.

20 Programs found on UNDP’s website, individual country pages. For more information on these programs see

www.undp.org.

21 For more on the benefits and drawbacks of decentralization see De Vries, Norris, and Alberti.

22 For example, in Ukraine 99% of civil society organizations noted some form of interaction with central of local

government entities according to the latest Freedom House country report (2008).



37

23 The Law on Extremism was passed to create criminal punishment for slander of public officials. From Freedom

House’s Russia report (2008).

24 See Appendix VII for case studies on regional successes mentioned. Description of media protection in Georgia

and Ukraine is included in the body of this report.

25 Information on these existing programs found on the World Bank’s, OSCE’s, and OSI country pages. See

Appendix V for more details and more actors in the region.

26 Originally compiled for Cintora, Report to the OSCE on Democratic Governance in the Balkans, March 2009.

27 For more on public opinion surveys, see Norris, Pippa (2008).

28 Coppedge et al. 2008. “Two Persistent Dimensions of Democracy: Contestation and Inclusiveness.” Journal of Politics. Online

at

http://74.125.47.132/search?q=cache:Du5z5cy_eBQJ:sitemason.vanderbilt.edu/files/cFgGoU/Dimensions%2520of%2520Demo

cracy%2520COPPEDGE.pdf+Coppedge,+Alvarez+%26+Maldonado+inclusiveness&hl=en&ct=clnk&cd=9&gl=us&client=firefox-a.

Original definition from Dahl (1971).

29 Methodology taken directly from UNDP. “Decentralization in Europe and the CIS.” Discussion Paper on Democratic

Governance Practice. Bratislava, 2008. Online at http://europeandcis.undp.org/governance/. (Appendix 1)

30 UNDP. “Decentralization in Europe and the CIS.” Discussion Paper on Democratic Governance Practice. Bratislava, 2008.

Online at http://europeandcis.undp.org/governance/. (p. 15).

31 Case study from Cintora’s policy options report to the OSCE on decentralization, 2009. Macedonia case study

information from UNDP, “Fiscal Decentralization in Transition Economies” and Bieber’s “Institutionalizing Ethnicity

in the Balkans,” and for more on OFA see Crisis Group’s piece on Macedonia and

www.fes.org.mk/pdf/SVETOMIR%2520SKARIC%2520-

%2520OHRID%2520AGREEMENT%2520AND%2520MINORITY%2520COMMUNITIES.pdf+ohrid+agreement&cd=4&

hl=en&ct=clnk&gl=us.

32 Case study from Cintora’s policy options report to the OSCE on decentralization, 2009. For more on this case

study and decentralization in Croatia see UNDP (Bratislava, 2005).

33 UNDP (2005), 83.

34 For more on Ukraine’s social audits and report cards system, see UNDP’s report at

www.undp.org/oslocentre/docs08/sofia/Case%20Study%201-

%20Citizens%20Report%20Cards%20Ukraine%20FINAL.pdf.

http://74.125.47.132/search?q=cache:Du5z5cy_eBQJ:sitemason.vanderbilt.edu/files/cFgGoU/Dimensions%2520of%2520Democracy%2520COPPEDGE.pdf+Coppedge,+Alvarez+%26+Maldonado+inclusiveness&hl=en&ct=clnk&cd=9&gl=us&client=firefox-a

http://74.125.47.132/search?q=cache:Du5z5cy_eBQJ:sitemason.vanderbilt.edu/files/cFgGoU/Dimensions%2520of%2520Democracy%2520COPPEDGE.pdf+Coppedge,+Alvarez+%26+Maldonado+inclusiveness&hl=en&ct=clnk&cd=9&gl=us&client=firefox-a




38

35 For more on Georgia’s anti-corruption programs, see Transparency International’s country page for Georgia at

www.transparency.ge, the Carnegie Endowment at www.carnegieendowment.org and Caucaz Europe News article

at http://www.caucaz.com/home_eng/breve_contenu.php?id=191.

36 For more on E-government in Estonia see BBC news article

http://news.bbc.co.uk/2/hi/technology/3690661.stm.

37 For more on the ProMedia Project see USAID’s description at http://www.usaid.gov/pubs/bj2001/ee/cee/. For

more on Pro-Media;s success in Bulgaria see http://bulgaria.usaid.gov/media-program/page.html.

http://www.carnegieendowment.org/

http://www.usaid.gov/pubs/bj2001/ee/cee/

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