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The Pitfalls of Unsupervised Aid to Ukraine

Massive aid with limited oversight will lead to increased corruption, the corrosion of Ukraine's democracy, and a hollow victory.

Words: Douglas A. Pryer
Pictures: Kiryl

Unfortunately for Ukraine’s brave people, their fledgling democracy has struggled with political corruption. In 2021, Transparency International assessed that, although Ukraine’s corruption levels had very slightly improved over the previous eight years, only 58 of 180 countries (including Russia) were more corrupt than Ukraine.

Now, into this problem, inject massive amounts of aid unsupervised by donor countries. According to the Kiel Institute, from Jan. 24 to Oct. 3, 2022, the United States alone gave $54 billion in financial, humanitarian, and military aid to Ukraine. That’s more than a quarter of Ukraine’s 2021 GDP — and, thanks to a war-ravaged economy, likely half of this year’s GDP. Tragically, the meager mandate and funding that the US government has provided to the Departments of Defense, State, and US Agency for International Development inspector generals for overseeing this aid ensure that the United States has very limited visibility of this aid after it is provided to Ukraine.

We’ve seen this many times before. And we know what happens.


The Korean War was the first time that a nation at war received a significant share of its income from the United States, not via a temporary occupation authority controlling disbursements but through a new state that US leaders hoped to build into a strong democracy. In 1953, US aid to Syngman Rhee’s regime was approximately $1.45 billion, equivalent to 5.2% of South Korea’s GDP. After the war, this regime’s dependency on US aid grew, with aid peaking at 21% of GDP in 1956.

Scholars like Stephen Knack have empirically demonstrated that economic dependency fuels corruption. One theory for why this happens is that the less public officials perceive their future source of income as reliable, the more likely they are to engage in rent-seeking. Research has also proven the strong statistical relationship between high levels of assessed political corruption and instability. The causation here is two-way: instability incentivizes corruption by encouraging officials to seize what income they can while they can, while corruption weakens the democratic institutions that keep it in check.

Economic dependency fuels corruption. The United States must establish a well-funded aid oversight agency inside Ukraine now, while its democratic institutions are strong enough to respond favorably.

It’s no wonder, then, that the massive influx of unsupervised US aid fueled South Korean corruption. Varieties of Democracy (V-Dem) experts assess that, during the three years of the US Army military government there, political corruption levels improved significantly, dropping close to the world average. However, corruption grew more during the Korean War than during the 35-year Japanese occupation. It’s also no wonder that democracy did not take root in South Korea until 1987. Presidents Harry Truman and Dwight Eisenhower never publicly addressed the problem of political corruption in South Korea, let alone the possibility that massive, unfettered US aid was encouraging it. The first president to publicly address this problem was John F. Kennedy, who, in a statement shortly after General Park Chung-hee seized power, undeservedly praised the military strongman’s anti-corruption efforts. In other words, to quote Officer Barbrady from South Park: “Okay, people, move along. There’s nothing to see here.”

The effects of corruption in South Vietnam were worse. To this day, South Vietnam remains the United States’ costliest state-building project. According to Varieties of Democracy, political corruption peaked during the height of military construction (1964–1967). Meanwhile, President Lyndon Johnson publicly accepted that South Vietnam’s president was “dealing with corruption” while boasting about the amount of aid the United States provided. President Richard Nixon likewise gave unearned praise to South Vietnam’s anti-corruption efforts in a 1971 report to Congress. “Okay, people, move along. There’s nothing to see here.”

Arnold Isaacs (who reported in South Vietnam until Saigon fell) makes a strong case that corruption led to the collapse of South Vietnam’s army: incompetent officers purchased commissions and promotions, stole US-provided supplies (that were then sold even to the enemy), and received the salaries of non-existent “ghost” soldiers.

Massive aid is also associated with increased corruption scores in Bosnia and Kosovo. Varieties of Democracy’s corruption scores for Bosnia nearly doubled from 1992 to 2019. Assessed corruption levels in Kosovo, on the other hand, rose and peaked from 2008–2010, with levels today still higher than they were before the intervention. Democracy remains weak and fragile in both countries, with stability guaranteed by peacekeepers.

From 2003–2012, the United States spent more than $60 billion on reconstruction in Iraq. During this period, Iraq’s assessed corruption levels were among the highest in the world (albeit slightly lower than those of Saddam Hussein’s corrupt regime). In 2021, Transparency International ranked only 22 of 180 countries as more corrupt than Iraq, and Fund for Peace ranked the young democracy as the 20th most fragile state.

Then there is Afghanistan, where aid expressed as a fraction of GDP truly soared. In 2012, for instance, the United States alone provided $14.8 billion in official aid, the equivalent of 74% of Afghanistan’s GDP that year. Predictably, while the Taliban were corrupt, assessed corruption levels rose much higher after 9/11 — higher, in fact, than during any previous year in Afghan history, higher even than during the Afghan civil war of 1989–1992 when corrupt warlords divided and ruled Afghanistan. Continuing what had become a presidential tradition, President George W. Bush praised the supported President Hamid Karzai’s commitment to “dealing with corruption.” “Okay, people, move along. There’s nothing to see here.”

Corruption contributed to the collapse of Afghan forces just as clearly as it had in Vietnam. Due to ghost soldiers, Afghan security forces’ strength may have been less than one-sixth the number on the books. With US forces and oversight withdrawn, Afghan soldiers and policemen increasingly blamed shortages of food, fuel, and other supplies on corrupt commanders who usually garnished their troops’ salaries, too. Demoralized Afghan security forces deserted in droves, sometimes accepting bribes from the Taliban to do so.


But there is something to see in Ukraine. The United States has to fix its lack of oversight of aid there. This is true even though inspectors and auditors must be politically empowered within the recipient country to be effective. In Afghanistan, the Special Inspector General for Afghanistan Reconstruction (SIGAR) routinely reported that Karzai obstructed its anti-corruption activities with no negative repercussions. Ukraine, though, is more democratic than Karzai’s government. One can expect that if corrupt Ukrainian officials were publicly identified, they would be shamed and punished, thus deterring much corruption.

The United States must establish a well-funded SIGAR-like agency inside Ukraine now, while its democratic institutions are strong enough to respond favorably. Otherwise, even if the Ukrainian government were to win the war militarily, it would likely end up just as authoritarian and corrupt as President Vladimir Putin’s regime.

That might still count as a victory, but it would be a hollow one.

Douglas A. Pryer is a former US Army officer and has supported stabilization operations in Bosnia, Kosovo, Afghanistan, Iraq, and Yemen. Now a PhD student in International Politics at the University of Aberystwyth, Wales, he is completing a dissertation on the causes and impacts of American occupations on host-nation political corruption from the Spanish-American War to the present.

Douglas A. Pryer

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