Ethics and Aid in Ukraine

| December 2015
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Overshadowed by the attacks in San Bernadino and the vigorous debate over whether U.S. strategy against the Islamic State is effective in combating the risks of terrorism, Vice President Joe Biden visited Ukraine, in part to deliver a message that Ukraine has not been forgotten as the Middle East returns to take center stage in the security attention of the United States and its allies. But the vice president’s trip also ended up highlighting what is a perpetual conundrum for policymakers: the relationship between aid and assistance and reform. Part of Biden’s visit was to emphasize concerns about the slow progress of political and economic reforms, with the vice president delivering a clear warning that Ukraine may again–as in 2004–be in the process of missing the window to make a decisive break with its dysfunctional past. This is easier said that done, because many of the political leaders who are being asked to change the system are in fact the products of the old way of doing business.

Of course, Ukraine also has the small problem of a Russian-supported insurgency on its territory and the demands of trying to reform a dilapidated, corrupt military structure in order to guarantee some modicum of state and territorial security. It also has to deal with the reality that the reforms it must continue to pursue are costly and harmful to social welfare (in the short run), while at the same time retaining a commitment to increasing democratic governance–but where the voters are increasingly unhappy with the course of developments and who signaled this discontent in the recently concluded local elections, which saw a rise in the share of the vote given to the opposition. (All of these problems were explored in depth earlier this fall at a Ruger chair workshop, “Ukraine’s Second Battleground: Economic Transformation,” held at the Naval War College this past October.)

Biden’s message, in short, was that Ukraine must continue with reforms; some additional aid would be forthcoming, but the bulk of what might be expected will be tied to conditionality–on Ukraine continuing to make progress on reshaping its political and economic institutions. Yet if Ukraine does not make continued progress, will assistance be forthcoming?

Policymakers must always struggle with the trap of foreign assistance. Flood a country with aid, even with the best of intentions, and you can enable the very corruption and dependency you are trying to combat–Afghanistan being the poster child right now for this reality. Hold out a long list of conditionalities which must be fulfilled, and the enthusiasm and willingness to stay the course can immediately wane.

Does a “priming the pump” approach work best–giving some unrestricted aid immediately up front, to incentivize change, but to hold back other rewards until other conditions are met? And at what point is an acceptable “minimum” reached? One of the complaints I heard in Germany earlier this year is that some Eastern European countries did enough to qualify for certain rewards (say, visa free travel within the European Union, a right that–given the current security situation–may end up being suspended) but then stopped, as there was no further progress on reform once the minimal standards had been achieved, in contrast to the clear hope that the momentum for pursuing further political and economic change would reach critical mass and continue even if there was no longer a specific reward to aspire to.

These questions are asked even when times are good and aid budgets are large; but as we continue to move forward both with conditions of budget austerity and with the spiraling of crises all demanding for attention, aid triage will be inevitable. Does this then push us towards the ethics of triage, where aid is rendered not to all requesters, and not on the basis of need, but where we think the aid can be most effectively used? This was the logic behind the Millennium Challenge Accounts–and increasingly may become the standard as we move forward.

To come back to Ukraine: the government there now has its decisions to make. How much is it worth to pursue further dislocating change, and for what reward at the end of the day–and how much can the current situation be made tolerable and sustainable? And for the West: what is the acceptable level of risk in investing in Ukraine’s reforms knowing that there is a chance of failure?

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