Ukraine’s decentralization reforms since 2014

This report from the UK think tank Chatham House looks at initial achievements and future challenges for Ukraine’s decentralization reforms since 2014.

Since the Euromaidan protests of 2013-14, Ukraine has conducted a political decentralization process that seeks to fundamentally restructure centre–periphery relations. This paper outlines the achievements and shortcomings of decentralization and highlights a window of opportunity for completing the first phase of reforms. Since 2014, Ukraine has been conducting a political decentralization process that seeks to fundamentally restructure centre–periphery relations. This reform of local governance implies a devolution and delegation of power from the national to the municipal level (and, to a lesser degree, to the regional and upper subregional levels). Decentralization is being effected not through federalization, but through an amalgamation of small municipalities and a reallocation of political, administrative and financial competencies to these merged and enlarged local communities (hromady).

The key instrument in decentralization so far has been the voluntary creation of self-sustaining ‘amalgamated territorial communities’ (ATCs). This process is supported by developmental planning at the local and regional levels, as well as by comprehensive technical and financial support from Western donors. In a first for Ukraine, a Donor Board on Decentralization Reform has been assembled to coordinate implementation and assessment. After recognition by the central government, ATCs receive considerable rights in respect of tax collection, self-government and public policy. The central government also provides ATCs with funding to build new institutions and implement local developmental projects. The reform is accompanied by parallel ‘sectoral decentralization’, above all in public health and education. In early 2019, Ukraine’s decentralization entered a second phase, which envisages an administrative-territorial reform at the level of the rayony (districts) as well as a redefinition of regional and upper subregional prerogatives.

However, this reordering of power requires constitutional changes that have yet to be made. The ongoing amalgamation of municipalities strengthens Ukraine’s resilience against Russian hybrid warfare, and demonstrates compliance with EU democracy and subsidiarity principles. If decentralization is successful, Ukraine will provide an intriguing new example of the political value and administrative utility of a non-federalist, two-tiered national governance system. As such, its reform experiment not only has the potential to become a development model for post-Soviet countries that prefer local to regional devolution, but could also become of interest to other countries – including certain EU member states – whose territorial integrity is under question.

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