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The Ukrainian Malaise: Will Georgians Save the Day?

When Georgia ran into a conflict with its northern neighbor in 2008, it experienced considerable solidarity on part of its main Western ally. The United States supplied military transporters to fly back Georgian troops from Afghanistan, which was correctly understood by the Russians as a warning that the US would not allow Georgia to fall. While the Russians had already taken Gori, Condoleeza Rice and Michail Saakashvili held a joint press conference in Tbilisi, just 80 km away. Surprised by the American determination to defend small Georgia, the Russians finally withdrew their troops to South Ossetia.

In contrast, in the ongoing crisis in Ukraine there was no swift Western reaction to deter the Russians. The Western response to Russian military aggression was a series of sanctions, sending a clear signal that one would not be willing to defend Ukraine militarily.

Why were Ukraine and Georgia treated so differently? There may be a couple of reasons, but the most important one is that since 2003, the government of Georgia had “done its homework”: in a series of bold reforms, many of which were either taken from economics textbooks or later included in them, Georgia had developed from what was essentially a failed state into an important asset in the geopolitical game. No Western government is willing to risk a war with Russia for saving Ukraine’s territorial integrity, because its government is dysfunctional and swamped with corruption.

Ukraine learned the hard way why one should get one’s government in order, and in the wake of this experience they hired various members of the former Georgian government to fix up their country – the achievements that were made in Georgia shall now be repeated in Ukraine. The former Georgian minister of healthcare, Alexandre Kvitashvili, has become the new minister of healthcare in Ukraine. Eka Zguladze-Glucksmann, former first deputy minister of internal affairs in Georgia, has become first deputy minister of internal affairs in Ukraine.  Gia Getsadze was deputy minister of justice in Tbilisi and has now the same office in Ukraine. Dato Sakvarelidze, who held a similar office in Georgia, is now deputy prosecutor general in Kiev. And, last not least, Michail Saakashvili himself was appointed governor of the Ukrainian province of Odessa this week. This list is not exhaustive, and each of these Georgians brings along former aides, staff members, and experts from Tbilisi.

The question is, however, whether the Georgian political team will be successful. In my opinion, there are two good reasons to be optimistic. The first one is that, while there are differences in the details, Ukraine is struck essentially by the same problem Georgia had in the past: government failure. The second reason is that Georgian politicians have a very “pragmatic” way to fight corruption, which arguably is more effective than a more principled approach favored by most corruption experts and NGO’s.


GOVERNMENT FAILURE

Writing this article from Kiev, I can assure you that at the surface, Ukraine appears to be anything but a failed state. The streets are very clean, the density of high-end limousines is quite amazing, there are almost no old, rusty cars driving around, and the air quality is much better than in Tbilisi. People are dressed up nicely, pedestrian rights are respected, and the society makes a much richer and more “European” impression than Georgia.

This private glitter, however, is part of the problem. While rich Kievans enjoy themselves in the cozy street cafes of the capital, the Ukrainian army fails to provide food and equipment to its soldiers, who therefore have to rely on their families! And after the revolution, there were allegedly only a few hundred thousands of dollars left on Ukraine’s government accounts (which led Europe to hastily give some extra loans). Taxing just a fraction of the wealth that is driving around in Kiev’s streets through a car tax would have solved the problem, but the government was not capable or willing to do it. It is obvious that what is dysfunctional in Ukraine is not the society, which is civilized, European, and quite wealthy, but the government, which does not tap the private wealth. As a Ukrainian friend told me: “Ukrainian authorities have remained in the 19th century.”

This very much resembles the situation in Georgia before the Rose Revolution. Also in Georgia, people were not intrinsically corrupt (I refer the readers to my article “Georgian Decency as a Competitive Advantage”, to be found on the ISET Economist Blog). Ordinary Georgians suffered big time from corruption and truly yearned for a government which would move the society into a new, non-corrupt equilibrium. Similarly, yesterday on the Maidan here in Kiev I saw a demonstration against corruption, where protesters were holding up posters with a message for their political leadership: “If you don’t terminate the corruption, terminate your government!”

Georgians have an impressive record in fixing government failure. Their preferred approach was to just remove the government when it failed – while in office, Kakha Bendukidze removed some 900 laws or so. This nurtures hope that also in Ukraine, with similar problems, the Georgian recipes will work.


SELECTIVE INTEGRITY

An important characteristic of the “Georgian way” to fight corruption is its selectivity. Not everybody had to denounce corruptive practices after the Rose Revolution. In a classical top-down approach, the first one’s who had to change were those at the very bottom of the hierarchies: policemen, simple government employees, bureaucrats. Many of them were fired and some reemployed under zero-tolerance conditions. The government encouraged whistleblowing and established telephone numbers where citizens could report corruption. This worked perfectly well, and there is no doubt that so-called “petty corruption” was eradicated in Georgia.

In the higher ranks of the hierarchy, however, the anti-corruption campaign was enforced less strictly. The many reports about extortions of money from businessmen, political considerations in government tenders, the involvement of Vano Merabishvili in a highly disturbing murder case, to name just a few instances – integrity standards were not equally high for all members of the Georgian society.

Is this good or bad? From a principled view, of course one has to condemn this selectivity, and Transparency International would never give its approval. Yet from a pragmatic view, it may be necessary to, at least in the beginning, focus on fighting petty corruption. Once the lower ranks are cleaned in a top-down approach, a bottom-up development may follow later: if people are not used to corruption in their everyday lives anymore, they will also lose comprehension for grand corruption at the top. And for a limited amount of time, it may be acceptable to let some people get away with their practices, if that secures their support for the general reform process.

Selective integrity may also be necessary in Ukraine. Some in the new Ukrainian leadership control entire business empires, and who knows whether they would be happy about an anti-corruption campaign that would cut deeply. If uncautious, the Georgian experts might be back on the job market quite soon -- yet the concept of selective integrity, which they developed when ruling Georgia, may help them to deal with local challenges quite well.


A NEW GENERATION OF POLITICIANS

Successful managers and executives in the private sector are not restricted to work for one company. Very often, when the position of a CEO has to be filled, headhunters look for candidates among those who proved their competency outside of that company. I found it always problematic that this was not the case for politicians – apparently, for politicians it was not competency and skills which counted but networks and political support they had built up.

Yet also politicians need skills and expertise. The lack thereof among numerous examples among politicians from all countries of the world, is one of the reasons why governments are frequently performing so badly.

I am happy that Georgian politicians break up the convention that a Ukrainian minister must be Ukrainian. If somebody has proved to be able in country A, why not using their skills in country B? The signature skills of Georgian politicians, namely to fight corruption and build up democratic institutions, are scarce all over the world. Perhaps, Georgians will find employment not only in Ukraine, but later also in numerous other countries where the “Georgian approach” is needed!

 

For Georgian version of the article, click here.

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Guest - Eric Livny on Monday, 08 June 2015 13:10

I don't think the Western treatment was all that different. There were no (and will not be) NATO boots on the ground in either Georgia or Ukraine. And there has been (and still is) a lot of Western solidarity with both countries.

Ukraine is much larger, and is simply much more difficult to manage and reform. It is has a huge intermediate layer of regional administrative bodies which is simply absent in Georgia.

The Georgian experience may be useful in reforming one particular region of Ukraine, such as Odessa. Creating a functional national government in a complex "federal" setting is a task for which Georgian policymakers are hardly fit.

I don't think the Western treatment was all that different. There were no (and will not be) NATO boots on the ground in either Georgia or Ukraine. And there has been (and still is) a lot of Western solidarity with both countries. Ukraine is much larger, and is simply much more difficult to manage and reform. It is has a huge intermediate layer of regional administrative bodies which is simply absent in Georgia. The Georgian experience may be useful in reforming one particular region of Ukraine, such as Odessa. Creating a functional national government in a complex "federal" setting is a task for which Georgian policymakers are hardly fit.
Guest - Megiddo on Tuesday, 09 June 2015 02:36

Eric, the nice thing about this dispute is that we can just wait and see who was right :). Relatively soon we will know the performance of the Georgian team in Ukraine.

Eric, the nice thing about this dispute is that we can just wait and see who was right :). Relatively soon we will know the performance of the Georgian team in Ukraine.
Guest - Lasha Lanchava on Monday, 08 June 2015 14:00

It reads like a post-mortem justification of what you call a pragmatic approach (And I know you are doing it out of curiosity, with zero political motives!) Do you think that government can use murder, torture and racketeering to achieve other 'noble' goals? Is not it just replacement individual criminal with the centralized state level criminal? What the difference with that and the communist state that occasionally purges its population?

I agree that to rebuild a failed state it is necessary to have a forceful top-down approach and harsh treatment of culprits but at the same time the competent governance requires government that does not destroy lives of innocent people. Those who use fear, intimidation and torture to enforce compliance and embellish themselves are not statesman but a band of hooligans.

Why do we (people in the west) do not like a Saudi form of governance even though Saudis live in relative peace (low levels of criminal) and enjoy high living standards? Saudi government is constantly demonized because of its legacy of violation women and minority rights. From that perspective, the government that does not shy itself from murdering its own citizens, is the polar opposite of the western political philosophy.

Also not clear why would this kind of behavior would suddenly, as you expect, end in the future...

And what may seem a 'different' (I agree with Eric that it's not all that different) treatment of Georgia and Ukraine is not due the fact that Georgia has done its homework. The more tangible reasons can be discovered in the policies of former and recent White House administrations. During Bush, a republican president, US was taking a hawkish stance on the international stage, while Obama administration took a more cautious approach avoiding escalating conflict whenever possible.

It reads like a post-mortem justification of what you call a pragmatic approach (And I know you are doing it out of curiosity, with zero political motives!) Do you think that government can use murder, torture and racketeering to achieve other 'noble' goals? Is not it just replacement individual criminal with the centralized state level criminal? What the difference with that and the communist state that occasionally purges its population? I agree that to rebuild a failed state it is necessary to have a forceful top-down approach and harsh treatment of culprits but at the same time the competent governance requires government that does not destroy lives of innocent people. Those who use fear, intimidation and torture to enforce compliance and embellish themselves are not statesman but a band of hooligans. Why do we (people in the west) do not like a Saudi form of governance even though Saudis live in relative peace (low levels of criminal) and enjoy high living standards? Saudi government is constantly demonized because of its legacy of violation women and minority rights. From that perspective, the government that does not shy itself from murdering its own citizens, is the polar opposite of the western political philosophy. Also not clear why would this kind of behavior would suddenly, as you expect, end in the future... And what may seem a 'different' (I agree with Eric that it's not all that different) treatment of Georgia and Ukraine is not due the fact that Georgia has done its homework. The more tangible reasons can be discovered in the policies of former and recent White House administrations. During Bush, a republican president, US was taking a hawkish stance on the international stage, while Obama administration took a more cautious approach avoiding escalating conflict whenever possible.
Guest - Megiddo on Tuesday, 09 June 2015 02:25

Thanks for your comment, Lasha. Four remarks:

(1) Unfortunately, there is strong evidence that it is impossible to solve certain issues in a democratic way. If the UNM government would have obeyed high democratic standards, Georgia would still be under control of the "thieves in law". The choice was to get rid of the Georgian mafia in a rough way or not to get rid of it at all. Evidence from other countries: Greece has a list of about 5,000 rich people who together owe the government billions of dollars. Yet between the government and the money are several legal instances, appeal courts, armies of lawyers etc. It would take years to get the money, if at all. The "Georgian approach" would be to just expropriate those guys or coerce them to pay. Of course, there would be some people who would be treated unfairly in this way, but this injustice is an inevitable cost if one wants to make any progress.
Another example is Germany after WWII. The German courts applied very high democratic standards when Nazi war criminals were tried. The prosecutors had to prove in each single case that the defendant was involved in crimes. In the end, tens of thousands of Nazi murderers were not punished. The "Georgian approach" would have been different: put everyone to jail who was affiliated with the Nazis. Of course, there were a few guys among the Nazis who would have been treated unfairly in this way -- there were Nazis who saved Jews, like Wilm Hosenfeld, Kurt Gerstein, and Oskar Schindler. These would have been punished like all the others. Yet it would have been the only way to prevent the mass amnesty for Nazis, which took place effectively.

(2) If we agree that the choice was to lower democratic standards or to remain with the thieves in law, the question is whether the UNM was violating democratic standards more than necessary. Yes, this is clearly the case! Merabishvili should have been dismissed in 2006 and the government should have moved towards higher democratic standards from that point on. This was Misha's greatest mistake! If he would have fired Merabishvili early, UNM would not be so unpopular today, and even for Vano it would have been better, as he would have been spared a life in prison.
Yet besides such specific insights, it is difficult to say by how much UNM was overshooting. Some people say that 300,000 prison inmates were too much. But what would have been a legitimate number? 250,000? 200,000? This depends on the number of transgressors, and it does not make sense to set a "quota" for the number of people that should be in prison, right? Moreover, it is difficult to assess the extent of abuses, as many people who were quite legitimately prosecuted under UNM, for example because they were corrupt, now claim to be victims of Misha's government.

(3) "Also not clear why would this kind of behavior would suddenly, as you expect, end in the future..." Well, I guess you would agree that the democratic standards in Georgia have improved since UNM. This improvement is a direct consequence of the reforms UNM have started, which finally resulted in free elections where UNM lost power. Whatever you think about the details -- a government which makes democratic reforms that causes the very same government to lose power in fair elections deserves respect!

(4) I think that if Ukraine would not have been so corrupt, there would have been no secession (for a couple of reason, one being the one I mentiond: greater geopolitical significance which would have triggered more Western engagement). Of course, it is a counterfactual statement and I cannot prove it.

Thanks for your comment, Lasha. Four remarks: (1) Unfortunately, there is strong evidence that it is impossible to solve certain issues in a democratic way. If the UNM government would have obeyed high democratic standards, Georgia would still be under control of the "thieves in law". The choice was to get rid of the Georgian mafia in a rough way or not to get rid of it at all. Evidence from other countries: Greece has a list of about 5,000 rich people who together owe the government billions of dollars. Yet between the government and the money are several legal instances, appeal courts, armies of lawyers etc. It would take years to get the money, if at all. The "Georgian approach" would be to just expropriate those guys or coerce them to pay. Of course, there would be some people who would be treated unfairly in this way, but this injustice is an inevitable cost if one wants to make any progress. Another example is Germany after WWII. The German courts applied very high democratic standards when Nazi war criminals were tried. The prosecutors had to prove in each single case that the defendant was involved in crimes. In the end, tens of thousands of Nazi murderers were not punished. The "Georgian approach" would have been different: put everyone to jail who was affiliated with the Nazis. Of course, there were a few guys among the Nazis who would have been treated unfairly in this way -- there were Nazis who saved Jews, like Wilm Hosenfeld, Kurt Gerstein, and Oskar Schindler. These would have been punished like all the others. Yet it would have been the only way to prevent the mass amnesty for Nazis, which took place effectively. (2) If we agree that the choice was to lower democratic standards or to remain with the thieves in law, the question is whether the UNM was violating democratic standards more than [i]necessary[/i]. Yes, this is clearly the case! Merabishvili should have been dismissed in 2006 and the government should have moved towards higher democratic standards from that point on. This was Misha's greatest mistake! If he would have fired Merabishvili early, UNM would not be so unpopular today, and even for Vano it would have been better, as he would have been spared a life in prison. Yet besides such specific insights, it is difficult to say by [i]how much[/i] UNM was overshooting. Some people say that 300,000 prison inmates were too much. But what would have been a legitimate number? 250,000? 200,000? This depends on the number of transgressors, and it does not make sense to set a "quota" for the number of people that should be in prison, right? Moreover, it is difficult to assess the extent of abuses, as many people who were quite legitimately prosecuted under UNM, for example because they were corrupt, now claim to be victims of Misha's government. (3) "Also not clear why would this kind of behavior would suddenly, as you expect, end in the future..." Well, I guess you would agree that the democratic standards in Georgia have improved since UNM. This improvement is a direct consequence of the reforms UNM have started, which finally resulted in free elections where UNM lost power. Whatever you think about the details -- a government which makes democratic reforms that causes the very same government to lose power in fair elections deserves respect! (4) I think that if Ukraine would not have been so corrupt, there would have been no secession (for a couple of reason, one being the one I mentiond: greater geopolitical significance which would have triggered more Western engagement). Of course, it is a counterfactual statement and I cannot prove it.
Guest - Eric Livny on Tuesday, 09 June 2015 02:45

Florian, it is a miracle that Georgia has had a democratic transition in 2012. It took not less than an extravagant billlionnaire willing to put his entire wealth on the line in order to remove UNM and its powerful administrative and legal machine.

What you consider to be "mistakes" (the refusal by Misha to get rid of certain individuals around 2006-7) are not just chance mistakes. Once you a create a system of repression you start going down the slippery slope of your own creation. First, you repress the bad guys, but then you start repressing everybody else, including people who don't agree with your views. And then you start losing popular support, at which point the name of the game is not longer "reforms" but political survival. When the goal is to survive, loyalty takes precedence over competence or cleanness. It is a game played by bad loyal guys.

Your policy prescriptions are not much different from those of Vladimir Ilyich Lenin about 100 years ago when stated that "we must not hesitate to use barbarous methods in fighting barbarism". What followed was Cheka, NKVD, and KGB.

Florian, it is a miracle that Georgia has had a democratic transition in 2012. It took not less than an extravagant billlionnaire willing to put his entire wealth on the line in order to remove UNM and its powerful administrative and legal machine. What you consider to be "mistakes" (the refusal by Misha to get rid of certain individuals around 2006-7) are not just chance mistakes. Once you a create a system of repression you start going down the slippery slope of your own creation. First, you repress the bad guys, but then you start repressing everybody else, including people who don't agree with your views. And then you start losing popular support, at which point the name of the game is not longer "reforms" but political survival. When the goal is to survive, loyalty takes precedence over competence or cleanness. It is a game played by bad loyal guys. Your policy prescriptions are not much different from those of Vladimir Ilyich Lenin about 100 years ago when stated that "we must not hesitate to use barbarous methods in fighting barbarism". What followed was Cheka, NKVD, and KGB.
Guest - Megiddo on Tuesday, 09 June 2015 21:10

Yes, it is a slippery slope, and of course one would prefer to transform countries in less daring ways. But as I said, I think this is impossible. The only alternative to UNM (or similar) government was protracted Shevardnadze-style government. And moving on a slippery slope does not mean that one will slip down all the way.

Yes, it is a slippery slope, and of course one would prefer to transform countries in less daring ways. But as I said, I think this is impossible. The only alternative to UNM (or similar) government was protracted Shevardnadze-style government. And moving on a slippery slope does not mean that one will slip down all the way.
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