Decentralization means delegating considerable authority and budgets from the state bodies to the bodies of local self-governance, to entrust as much authority as possible to the bodies operating closest to public, where this authority can be exercised most successfully.


1

Defining the territorial boundaries of the local self-governance bodies and executive power

Setting up three-tiered system of the administrative and territorial structure in Ukraine.

Defining the territorial boundaries of the local self-governance bodies and executive power
2

Dividing the competences between the local self-governance bodies of different levels

Competences most vital for peoples’ life should be transferred to the power level closest to them.

Dividing the competences between the local self-governance bodies of different levels
3

Dividing the competences between the local self-governance bodies and executive power bodies

Delegating the competences of the local state administrations to the local self-governance bodies. The executive power will retain only control functions.

Dividing the competences between the local self-governance bodies and executive power bodies
4

Identifying the scope of resource needed at each level

The budget system should be renewed completely. When the size of raion or community increases additional resources appear at local level. They could be efficiently used. The residents of villages and small towns will only win, because it is the very level at which money is needed, for example for public works – road repairs, law and order, elementary school, fire service etc.

Identifying the scope of resource needed at each level
5

Making local self-governance bodies accountable to their voters and to the state

People will become aware that the quality of the local power operation will depend on their voting. So the quality of life will depend on the residents themselves. We will introduce the local self-governments’ accountability not only to their voters for their successful operation, but also to the state – for its legality.

Making local self-governance bodies accountable to their voters and to the state

17 questions about reform

Decentralization means delegating considerable authority and budgets from the state bodies to the bodies of local self-governance, to entrust as much authority as possible to the bodies operating closest to public, where this authority can be exercised most successfully.


Local self-governance is the system under which the residents of villages, settlements and towns take the issues of governance into their own hands. People elect local councils and their heads.  They become responsible for the most essential issues.

Local self-governance bodies are in charge of school and pre-school education, health care at the basic level (out-patient clinics, first medical aid stations), cultural establishments, public works – street lighting, roads, street cleaning, public order, and of many other vital issues.

Reform essence: give the right of solving all the aforementioned problems back to the public –residents of villages, settlements and towns.


It did, but only within rigid boundaries. In order to do well by its local community local authorities need money. And local powers did not have it. The taxes paid by enterprises and individual taxpayers employed there, were taken to Kiev – to the treasury - almost in full.   Then bureaucrats from Kiev come up with decisions –who receives what and in what amount. Often the decisions on the money to be spent on local needs were influenced by the “kickbacks” at all power levels –in the ministries, oblast’ and raion administrations.

In fact it was not local self-governance sensu stricto, but a corruption vertical growing stronger every year.  That is why if any local self-government could operate at all, it was against the system and not in line with it.


By means of power decentralization. The local self-governance reform ensures the right to decision-making, i.e. delegation of authority, and capacity-building, i.e. transfer of funds to the citizens. It will be stipulated by the Constitution of Ukraine and by many laws. It will establish new rules for the power system functioning.   

All the redundant structures set up for the centralization of power and funds should be abolished. Many laws should be changed to that end.


The essence of transformations suggested by decentralization reform: the executive bodies and local self-governance bodies finally will deal with the issues intrinsic to them. And citizens will be empowered to set up (through elections) local self-governance bodies in the community, raion and oblast’.

Respectively, local self-governance bodies of different levels i.e. community, raion and oblast’ will acquire the authority and resources necessary to exercise it. The local self-governments will become accountable before their voters for the efficiency of their operation, and to the state- for its legality.


Under the old system raion was virtually ruled by a “governor” – a head of oblast’ state administration. He acted as the only source of unlimited power in the region. In the same way the entire power in Ukraine was concentrated in the hands of the President. Some people believe that   once the head is elected by the people everything will change for the better and that the leader will be considerate of his electorate. But in fact concentration of excessive power in the hands of one person is not democracy. We can end up with the country of not just one, but 20 rulers of small principalities – their regions.  

When full authority is switched to the local level, which is closest to grass-roots, then it is a real decentralization. The highest echelon (raion, oblast, country) retains only the authority over the issues common for all communities. At the oblast (regional) level it is specialized medicine, higher educational institutions, roads of oblast’ significance, areas of regional economic development etc.

These are also basic differences between decentralization and federalization. In a decentralized unitarian state two levels of public authority are the most powerful: national and local. In the federative state, on the other hand, regional level dominates, and the lion’s share of authority and resources is concentrated at the regional level. Due to this concentration regional political elites rise to power. They are not ready to operate at the national level, but too ambitious to stay at the regional one. They believe they are better qualified for the task than local or national elites, and hence, the region has to perform more and more functions.   It leads, in its turn, to the regional separatism.


Federalization means delegating considerable authority to the regional (oblast) level, while the local self-governance reform counts on communities (people).  

Transfer of resource and terms of reference to the regional level only is a risky business. It might lead to the re-construction of the centralized and corrupted system of power, only at the regional level.  

Other risks are involved too. Power structure built on federal principle, threatens with separatism promoted by the local politicians abusing average citizens’ trust and setting them against one another, instead of working for the betterment at the local level. And the major hindrance – federalization creates problems for nation-wide decision-making. Practices of some federations show that instead of striving towards joint decision, the politicians are blocking each other’s way.  Separatists operate in many countries, but it is most characteristic of the countries with federative structure and for those in which the regions have too broad authorities.

The more vital and really relevant issues are taken outside the brackets of politics, the more people will gain and the more stable life will become in Ukraine. Today it is expedient to establish strong local self-governance system as a foundation for the united stable Ukraine, while other issues (language, cultural characteristics of individual areas) will be resolved eventually through constructive political dialogue.  

When the scope of the local self-governments terms of reference for the various levels (community, raion and oblast’) is defined, it will be done with the participation of local self-governance officials, including southern and eastern regions of the country, the way it was when the reform concept was being discussed.


At the oblast’ and raion level the members of the respective councils will be elected. Then the councils will elect the executive committees heads. This system currently works in the cities, and rather successfully, too, even under centralized power. The only difference is that in the cities the heads are elected by the direct voting of the residents. It is justified by the large scope of duties of the mayors (community level) that will only become larger. This scope traditionally used to be narrower at the oblast’ and raion level. And a mayor (community level) will be closer to the public – it is easier for the people to control him, while the officials of the higher level are controlled by the deputies.


No. This is one of the crucial features of the local self-governance. Each level has its own terms of reference (duties). They are not overlapping. Those in charge of oblast’ repairs, are not ruling those in charge of local roads. No need for that. Local self-governance bodies are accountable only to the law and their voters.


Over the years of independence the opponents of local self-governance reforms claimed that communities allegedly are not ready to govern themselves. Supposedly, they had no well-trained staff, so that chaos and corruption would settle in.

It is nothing but excuses.

Let us have a look at our European neighbors. Virtually everywhere the system of power is built in just the same way, and demonstrates its efficiency. How so? Because if problems are addressed by the people really concerned, then they are eager to do their best.

It would be an error to assume that local officials are less honest, less responsible and educated worse than bureaucrats in the capital city. In fact, the residents want to develop their community (village, settlement or town), and, therefore, they will keep looking for the best solutions and also keep studying. And the electorate will press their representatives to operate openly and transparently. That is why the new system will be getting better on its own, engaging competent and responsible people. And the state’ task at the reform stage is to assist local employees in mastering new skills.


People themselves will act as major controllers at the local levels. The law on local self-governance stipulates compulsory involvement of community members into the joint operation. Hence the law on local referendum which will provide for recalling of the local council and heads of the communities is in order.

Reform envisages establishment of state representations, namely, small structures with monitoring and control functions (they will follow up the adherence of the local self-governments to the law) and coordination duty (harmonizing the operation of the state bodies in a given area).  If local self-governance bodies adopt illegal decisions, the heads of state agencies are entitled to intervene and appeal to court.


Under the former system local self-governments used to play the second fiddle. They had a lot of responsibilities but no instruments to achieve their goals.

The reform concept and proposals of changes to the Constitution clearly spell out the need to provide necessary funds for the local self-governance bodies.

The local self-governance bodies will have their share of the state taxes (alongside with subsidies). If the local powers face additional tasks under certain decisions, the additional costs should be compensated by state.  

Mechanism of the taxes distribution between different levels of power and the state will be reflected in the changes to Budget code. It is developed with the Polish experts’ support, specialists who had already implemented it within the reform of local self-governance in Poland.


The reform does not envisage any changes in the oblasts’ (regions’). Instead we will change the system of management at the oblast’ level.

As far as raion and community level are concerned, unequal size of the territorial and administrative units in Ukraine should be taken into account. Ukraine has about 12 000 communities (in the villages, settlements and cities), with some of the counting less than one hundred members. No full-scope local self-government can be set up in such a unit. That is why the reform calls for integration.

It offers incentives for bringing together small communities on the voluntary basis. One of the draft laws devised within reform framework stipulates voluntary integration of the communities and cooperation between them.   

These laws specify mechanisms for bringing communities’ efforts together to resolve uncomplicated common problems and it is up to the community members to decide whether to use these mechanisms or not.  Anyway, the stronger communities are, the higher is their capacity (money, resources), the more functions they can perform for the development of their respective areas and benefit of its inhabitants.


Currently we can only lament that the reform had not been introduced earlier. The central power lacked good will, decisiveness and readiness to share competences and resources.

Post-soviet and post-socialist countries that implemented the reform today leave Ukraine far behind in terms of economic and social progress.  Due to the reforms they included into their plans the most valuable capital of any country, i.e. people’s interests, removing the main obstacle in the way towards well-being and prosperity – i.e. corruption.    

The reform promoting transfer of some portion of the state taxes to local budgets ensures economic incentive for the public to develop new productions, support business etc.

Decentralization and deregulation removes artificial hindrances for business and entrepreneurship – redundant licenses, unnecessary agencies, and excessive control.  Thus the country can eventually be revived. Besides, active and capable stake-holders will act as main pushers and shakers at the territorial level. They will support the changes that government is trying to introduce. That is why without local self-governments’ reform the rest of the reforms are doomed to failure – as it actually happened over the last years.   

Let us consider the experience of the Central and Eastern Europe. When decentralization was carried out in Poland, the economy experienced 10% decline a year, inflation reached about 500% per year. The borders were still guarded by the soviet troops. But Poland proceeded with the reform, and today is ready to help Ukrainians reach the same success without repeating mistakes that might occur during implementation of decentralization.


The decentralization reform offers measures meeting the interests of all Ukrainians irrespective of their place of residence. Full-fledged local self-governance will demonstrate the possibilities of the state development, offering every person an opportunity to find his/her place in the society and influence the situation via participation in the community life, including economic development. Main goal is giving the sense of dignity back to people providing them with the chance to realize their potential in their own country.   

Significantly, the local self-governance reform goes hand in hand with the reform of regional policy. That is how the initiative from the grass-roots should be supported by the upper echelons.   The state regional policy shall support the projects strategic for the regional development. The regions facing serious economic constraints should be given a hand to reach the proper levels, and viable and fully operational local self-governments set up the foundation for the regional development with due consideration to local differences.

The draft law on community merging also reads that historical, natural, cultural, ethnic and other characteristics also should be taken into account as the factors bearing on sustainability of the new merged communities.


The reform concept was devised and approved by the government in April 2014.

The proposals on changes to Constitution of Ukraine have been formulated and submitted to the parliament. Constitutional changes are a must, as so far the Constitution defines current power system with its oblast’ and raion state administrations, insufficient funding and authorities of the communities.

The whole set of draft laws is being developed and submitted to the Supreme Rada. The laws on territorial communities’ cooperation and state budget, with significant expansion of the local budgets’ revenues, in line with the reform requirements, were passed in 2014 as well as the State strategy for the regional development till  2020.  All the relevant laws and amendments to the Constitution will be adopted in 2015, allowing starting reform implementation this year. And, finally, local elections with new rules, ensuring management of the territories and communities by the elected local councils that will appoint the executive committees and be fully responsible to their communities, can be held.  

After the President, government and European experts, the final say belongs to the parliament. The stand of the people’s deputies is crucial. Today influencing people’s deputies by all available means is the public duty of everyone who appreciates the expediency of the local self-governance reform, to ensure their support of the said reform.   If the parliament votes for the relevant changes to the Constitution, the constitutional foundation for reform implementation will be set up. The parliament thus will fulfill its historical mission and be remembered in Ukrainian history handbooks.


The reform will provide incentive for full development of the communities, the members of which all of us are. It means that reform is important for each and every Ukrainian. Decentralization will lead not only to the changes in the power system in Ukraine, but also affect all the aspects of our everyday life. All sorts of licenses, permits and certificates, for example, for business, will become available locally. Investments will be attracted without prior approval from Kiev. Decisions on school repairs, kindergarten weatherization, road renovation or purchase of a fire truck to serve several communities will be made independently. The reform will empower us to improve the life of our communities and in the country as a whole. So this reform can be described as “self-salvation” reform.  We will rule our own land without any hindrance from bribe-takers or bureaucrats from the capital city, and finally live in a democratic country as European and not soviet Ukrainian citizens.