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Breaking free from the clutches of corruption
This phenomenon is not unique to Ukraine. In most European Union countries, citizens recognize the existence of corruption in government. Is there a recipe that can pull countries out of the clutches of corruption?
28 July, 2025
Governance and Regulations
Politics & Law
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Corruption and war. Two of the most popular and painful topics in Ukraine. The war against an external enemy has united and rallied Ukrainians, raised their morale, and tempered their will. Corruption is an enemy from within that destroys unity, undermines trust, and reduces the effectiveness of state institutions.
There is an opinion that corruption is part of the cultural code of Ukrainians, that they cannot organize public life without this destructive phenomenon. Others argue that it's the fault of bad politicians, officials, and security forces. They say that people are constantly being fooled, and thieves, fraudsters, and hucksters are climbing the political and managerial Olympus. Others point to imperfect laws, lack of control, and lenient punishment. Some associate corruption mainly with the criminal underworld, which is constantly seeking to expand its sphere of influence. One way or another, corruption has become one of the key topics in Ukraine's political, economic, and investment discourse.
The enemies present our country as a unique phenomenon of continuous, all-encompassing corruption, as a failed state that cannot be dealt with and over which it is desirable to establish external control. These opinions are supported by the assessment of the perception of corruption, vivid media coverage of high-profile corruption cases, and scandals involving VIP representatives of the executive, legislative, and judicial branches.
In the end, there is no doubt that corruption is widespread in Ukraine.
According to the survey "Socio-Political Situation in Ukraine" (June 2025), conducted by the Institute for Strategic Studies and Forecasts "Janus", the Center for Social and Marketing Research SOCIS, to the question, "What, in your opinion, has the most negative impact on the overall situation in the country?" 48.5% of respondents answered "high level of corruption at the state level".
According to the survey "Corruption in Ukraine 2024: Understanding, Perception, Prevalence," which was conducted in early 2025 and published by the National Agency for the Prevention of Corruption (NAPC), the public's perception of Ukraine's main problems is as follows:
- Russia's armed aggression against Ukraine: 92.3% (very serious problem), 5.3% (rather serious problem),
- corruption: 79.4% - very serious problem, 15.4% - rather serious problem,
- high cost of living and low income: 67.5% - very serious problem, 24.7% - rather serious problem.
On a scale of corruption perception from "1" to "5" (very widespread), the index in Ukraine in 2024 was 4.52 points. For comparison, in 2017, the index was 4.49 points. In 2024, 69.1% of the population recognized that the level of corruption in the country had increased. For comparison, in 2023, 61.2% of the population reported an increase in corruption, and in 2022, 41.8%.
In the TRACE 2024 Bribery Risk Matrix, Ukraine ranked 109th (52 points), with Norway's score of 7 out of 100 being the best. In the Corruption Perceptions Index 2024 by Transparency International, Ukraine ranked 105th with a score of 35 points; the best result was in Denmark, 90 points out of 100.
In the light of these and other studies, the opinion of the new Prime Minister of Ukraine, Yuriy Svyrydenko, is surprising: “Frankly speaking, in Ukrainian society and certain social groups, this issue is being intensified and exaggerated”.
Source: Ukraine’s Premier Eyes Fresh IMF Loan for War-Racked Budget, https://www.bloomberg.com/news/articles/2025-07-22/ukraine-s-new-premier-is-preparing-to-seek-a-fresh-imf-program
According to the business, the corruption index in 2024 was 4.39 points, compared to 4.52 points in 2017 and 4.26 points in 2020. At the same time, the perception of corruption in the area in which entrepreneurs operate is estimated at 2.35 points.
The main sources of corruption in Ukraine
The main source of corruption in Ukraine is the State model of general interventionism. In the West, it is called the welfare state, meaning a state of general well-being.
The theorists and ideologists of the Big State in the West proposed this model to Ukraine because it is the only one they know and understand, the only one they studied at universities, and the only one they recommend through international organizations and development agencies. Within this very state system, officials by law have enormous discretion — that is, the right to subjectively interpret and make arbitrary decisions regarding the interpretation and application of thousands of different provisions, assumptions, and legal norms.
- In monetary policy discretion as a source of corruption manifests itself through the granting of special access to credit resources (preferential interest rates, collateral conditions, insurance, state guarantees), foreign exchange and payment operations under the current account of the balance of payments, reserve requirements, and procedures for interaction with state authorities in terms of financing public procurement and/or investment programs.
- In the budgetary and tax area, the discretion of civil servants is manifested in the interpretation of the concept of "risk" when considering the blocking of tax invoices, the conditions and parameters for applying preferential tax rates, the provision of a tax holiday regime, the interpretation of the concept of "expenses", the definition of depreciation, requirements for documentary evidence of financial and commodity transactions, etc.
- In the regulatory sphere, discretion applies to virtually every area of human and business activity, from administrative services and starting a business to its liquidation and inheritance. Each adjective in tens of thousands of legislative acts - normal, highly profitable, strategic, responsible, important, poor, rich, environmentally friendly, harmful, low-risk, innovative, high-tech, socially oriented, equal, fair, and timely - is a source of subjective interpretation by the legislative, executive, and judicial branches. Each budget manager has their idea and perception of the concepts of "balance", "market failure", "sustainable development", "stability", "social justice" or "social spending", "national security", "national competitiveness", etc. Each parliament and government can interpret the concepts of "national interests" and "power belongs to the people" in its way. For this purpose, laws, regulations, procedures, rules, standards, and other legal frameworks are written and adopted that are binding on individuals and legal entities.
This complex, multi-level, intricate network of tens of thousands of legislative acts is the source of the state's administrative and legal power over the citizen. Its theorists and ideologues declare good intentions: general welfare, balanced growth, sustainable, inclusive development, poverty reduction, fair distribution of benefits, support for vulnerable social groups, countering market failures, production of public goods, etc.
Fulfillment of all these functions and tasks of the state requires large financial and human resources, organizations, and mechanisms for their implementation. The Welfare State inevitably becomes the Great State, because VIP managers and consumers of other people's goods take more and more economic power away from the Human Being, redistributing it in favor of the public sector or nomenklatura favorites in the private sector. As history shows, along with the concentration of economic power in the hands of the state, political rights and freedoms are eroding, and the level of trust in the government is decreasing, which is increasingly turning into a set of legal and law enforcement institutions captured by powerful interest groups.
A democracy that does not have strict constitutional limits on the size and powers of the state evolves towards Leviathan with the defeat of private property, economic freedoms, and civil rights, i.e., the welfare state leads to authoritarianism and the crisis of democracy itself.Share
On the one hand, people themselves placed the Leviathan (the state authority) on a pedestal, believing it would be a fair and generous Santa Claus. But in reality, even in developed democratic countries, the government is being captured by powerful interest groups, leading to the alienation of the population.
According to Eurobarometer 103, published in May 2025, only 31% of Greeks, 40% of Italians, 41% of Lithuanians, 28% of Cypriots, 46% of Hungarians, 51% of Spaniards, and 55% of Romanians agreed with the statement "your voice matters, counts in your country". The highest level is observed in the Scandinavian countries: Sweden - 92%, Denmark - 91%, Finland - 84%. They are characterized by a special legal and political culture, powerful institutions of society, developed private business, and tight control over all public authorities. The statement "my vote matters, it counts in the EU" has significantly less support. Only 30% of Greeks agree with it, 26% of Cypriots, 37% of Czechs, 33% of Italians, 39% of Hungarians, 35% of Lithuanians, and 43% of Spaniards.
The welfare state model leads, at varying speeds, to the erosion of legal and economic institutions in different countries, depending on the strength of the cultural and axiological code of Western values. One of the indicators of such erosion is the public perception of corruption and the various aspects associated with it. Let's look at the data from the public opinion poll "Citizens' attitudes towards corruption in the EU" (Special Eurobarometer 561, Citizens’ attitudes towards corruption in the EU in 2025). It was conducted in early 2025, and the results were published in July. Based on it, a number of important conclusions can be drawn about the state of the welfare state model in the European Union. They are important and valuable to formulate both the economic policy of Ukraine and for choosing a long-term development strategy, which is especially important for our country in the context of the place and importance of corruption in the public, state, and political discourse. They are important for assessing and accounting for corruption as a government failure in the formulation of economic and institutional policies.
Thus, we state that in the European Union, the bureaucracy has fertilized the soil for corruption and the nomenklatura-commercial syndicate.
69% of the population of the European Union countries consider corruption to be a big problem in their country. Even in Sweden, the number is more than half, while in Greece it is 97%, in Spain - 89%, in Italy - 82%, and in France - 68%. Judging by these responses, the European Union is in a deep corruption hole.
70% of EU citizens believe that there is corruption in local and regional authorities in their countries. In Greece, the number is 94%, in Croatia - 92%, in Italy - 81%, in Spain - 85%, in Hungary - 84%. As for national authorities, 73% of EU citizens agree that corruption exists in them. In Greece, the number is 95%, in Cyprus - 85%, in Croatia - 90%, in Italy - 84%, in Spain - 87%, and in the Czech Republic - 81%.
There can be no trust in local or central authorities if the overwhelming majority of citizens consider them corrupt.
The EU's state of general interventionism is so keen on imposing its ideas of beauty on people that 61% of the population considers corruption to be part of their country's business culture. In Greece, this number is 87%, in Cyprus 85%, in Italy 80%, in Spain 73%, Croatia 83%, Poland 63%, and even in France, 55%.
VIP bureaucrats naturally use the services/goods of their commercial partners to fulfill the thousands of functions and tasks they have transferred to the state. This creates strong, vicious, syndicated ties between those who live off the money and resources of taxpayers.
Such a system undermines the fundamental principle of capitalism – equality before the law. It leads to favoritism, nepotism, and the capture of the State by powerful interest groups. They include representatives of the legislative, executive, law enforcement, and business sectors. In most EU countries (Scandinavian countries are an exception), there is no strong national system of immunity and insurance based on culture, traditions, and citizenship that protects against oligarchy and schematism. Therefore, the evolutionary long-term expansion of the functions and size of the State has led to the formation of a syndicated state that works for commercial interests and lobbying of the elected, rather than for the country and the economy as a whole.
As a result, we are witnessing not only a crisis of trust in the state but also the formation of a negative image of business.
This is a very serious image blow to business, because it is strongly associated with corruption, with unclean, dark deeds. 77% of EU residents believe that "too close ties between business and politics lead to corruption." The number is 92% among Greeks, 84% among Cypriots, 78% among Czechs, 82% among Spaniards, 81% among Italians, 78% among the French, and 75% among Dutch residents.
Source: Citizens’ attitudes towards corruption in the EU in 2025
https://europa.eu/eurobarometer/surveys/detail/3361
https://europa.eu/eurobarometer/surveys/detail/3361
Residents of the EU countries, with a high level of political freedoms, full-fledged parliamentarism, an independent judiciary, and media freedom, have formed the following strong opinion. Within the framework of the welfare state, there cannot but be close ties between business and government, because the government itself is an active investor, lender, manager, insurer, and buyer, i.e,. it is engaged in active commercial activity either through selected private structures or through state-owned businesses.
If this is the case in the EU (with the rare exception of the Scandinavian countries, partly the Netherlands and Germany), there is no legal, institutional, or economic reason to believe that Ukraine can be different from Greece, Spain, Italy, Romania, or Cyprus, because our state institutions are even weaker, the power of the oligarchy that has seized the state is even stronger, and the architecture of full-fledged market relations has not yet been formed.
. Therefore, the situation in Ukraine with corruption is a direct result of building a model of a general interventionist state based on post-Soviet institutions among intellectual and managerial elites, full of Marxist dogmas and vulgar ideas about capitalism based on them.
Today, most EU countries have already faced the problem of corruption at various levels. The hypothesis of welfare state theorists and ideologues that the state will be an objective, impartial, fair arbiter and at the same time an equal participant in open market relations has been completely refuted.
With the statement "in our country, high positions in public administration and candidates for them are highly politicized," 74% of EU residents agree. The number is 98% in Greece, 88% in Cyprus, 86% in Croatia, 84% in Spain, 80% in Italy, and 81% in France %.
This means that in most EU countries, the main center of economic, social, and foreign policy development and implementation is the deep state, i.e., the same VIP managers and consumers of other people's property who integrate law enforcement and special services into their management and decision-making systems/schemes. This is no longer just a crisis of the public administration system. This is a crisis of democracy. Here is another convincing proof of this.
In the EU, 64% of respondents agreed with the statement "in your country, bribes and connections are a common way for businesses to win government contracts", and 60% of EU citizens agree with the statement "in your country, bribes and connections are a common way to get a position in government".
In the EU countries with the largest size of the state, its active participation in commercial activities without an insurance and safety system in the form of a cultural, constitutional "humble shirt" and a trained intellectual elite, this figure is off the charts. Democracy, not limited by private property rights, the imperative of economic freedom, and the size and function of the state in the implementation of the welfare state model, has led to the Oligarchy/Schematism model and the replacement of democracy with deep state rule.
Thus, corruption in Ukraine is not a unique, special case of a country that is unable to create a high-quality public administration system. Ukrainian corruption has the same theoretical, institutional, and economic basis as in the European Union. In terms of the spread of corruption and the seizure of the state by powerful groups of influence, Ukraine is no better or worse than such EU countries as Greece, Cyprus, Spain, Italy, Portugal, and Croatia. In many aspects, we are like France, Romania, Bulgaria, or the Czech Republic. Formal membership in the EU will not automatically solve the problem of corruption. First of all, we need a new model of development and economic growth. Abandoning the model of the welfare state in favor of the Mises/Hayek/Schumpeter/Romanchuk model of entrepreneurial growth and economic freedom is a strategic course for Ukraine.
Its implementation will not only neutralize the economic and social costs of corruption, legalize the lion's share of the "gray" economy, cleanse the state of oligarchs' commercial interests, but also achieve rapid, long-term economic growth and create a competitive country attractive for talents, technology, and finance.
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Yaroslav Romanchuk
A well-known Ukrainian and Belarusian economist, popularizer of the Austrian economic school in the post-Soviet space. He specializes in reforms in transitional economies in the post-socialist space.
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