In the framework of the project, a reform is considered to be a regulatory act that changes the behavior of economic agents, ultimately leading to a more efficient use of economic resources. Accordingly, a counter-reform is a regulation that results in less efficient use of economic resources.

For example, reforms include legislative changes that reduce opportunities for corruption, align prices of certain goods with market levels, relax or eliminate excessive restrictions, reduce cross-subsidies, stimulate competition, etc. Conversely, counter-reforms are changes that increase opportunities for corruption, administratively set prices for certain goods below market levels, expand cross-subsidies, introduce regulatory restrictions, limit competition, and so on.

Procedure for selecting and evaluating regulations, areas, and the overall pace of reforms (Reform Index) for the period of one issue

Selection of regulatory acts

Each issue of the Reform Index typically covers a two-week period. However, exceptions to this rule are possible. Some releases of the Reform Index cover a three-week period.

The decision to extend the monitoring period for a particular issue may be made considering factors such as a high number of public holidays (before the introduction of martial law—New Year and May holidays) or extraordinary events (natural disasters, war).

Thus, in the first six months following the full-scale invasion, the Reform Index issues covered a four-week period. However, as part of the 2023 audit, they were recalculated into two-week releases.

The selection of regulations for further expert voting is carried out by the Reform Index project team, based on information from the official websites of the Verkhovna Rada of Ukraine, the President of Ukraine, the Cabinet of Ministers, the National Bank, and other government bodies. The list is approved by two editors from the Reform Index editorial board.

Regulations subject to evaluation include legal acts that were adopted and/or published for the first time during the assessment period. Laws are included in the Reform Index after being signed by the President. Additionally, international agreements signed by the government or the President and ratified by Parliament (if ratification is required) are also evaluated.

Statements by officials, draft normative acts, and adopted but unpublished documents are not subject to evaluation.

Additionally, the introduction or cancellation of temporary anti-crisis measures (such as those related to foreign exchange operations and capital movement), experimental projects, and regulations with a validity period of less than one year are not assessed.

Areas of regulation assessment

The editors also determine which areas and sub-areas tracked by the Reform Index may be affected by the selected regulation, whether in terms of progress or regression. The Reform Index evaluates the expected impact of adopted documents but does not assess the quality of their implementation.

After selecting the regulatory acts and identifying the areas they may influence, a questionnaire with the selected regulations is sent to experts for evaluation.

As of January 1, 2024, the Reform Index editorial board has identified six key areas and 29 sub-areas.

List of areas and sub-areas of the reform index

Area	Code	Sub-area
I1. Governance	101	Anti-Corruption
	102	Decentralization
	103	Public Service
	104	Administrative Services
	105	State Property
	199	Other in Governance
І2. Public Finance	201	Tax System
	202	Public Debt Management
	203	Public Procurement
	204	Efficiency of Public Spending
	299	Other in Public Finance
І3. Monetary System	301	Currency Regulation
	302	Capital Markets
	303	Banking Sector
	304	NBU’s Independence
	399	Other in Monetary System
І4. Business Environment	401	Business Regulation
	402	Competition Policy
	403	Foreign Trade
	404	Corporate Governance
	405	Property Rights
	499	Other in Business Environment
І5. Energy	501	Energy Independence
I6. Human Capital	601	Education
	602	Healthcare
	603	Labor Market
	604	Social Protection
	605	Culture
	699	Other in Human Capital

Evaluation of regulatory acts

After receiving the questionnaire, which includes the selected regulations, their brief descriptions, and links to the official publication of the documents, experts assess the events in the questionnaire using a scale from "-5" to "+5" in the fields corresponding to the areas affected by the event.

How to determine the score:

"5" – A regulation that fundamentally changes the "rules of the game" (either positively or negatively, depending on the sign) or significantly impacts the behavior of many economic agents. Examples include introducing a new taxation system, requiring the publication of all government documents except classified ones, implementing a three-tier pension system, transferring most government powers to the local level, etc.

"4" – A regulation that brings significant changes to the "rules of the game." Examples include opening a large number of state registers; implementing a parametric pension reform.

"3" – A regulation that moderately changes the "rules of the game." An example of this can be the dissolution or reorganization of a government ministry or agency, leading to increased administrative efficiency.

"2" – A regulation that slightly changes the "rules of the game." For example, eliminating a small number of administrative documents required for tax compliance.

"1" – A regulation with minimal impact on the "rules of the game."

"0" means that a regulation will have negligible consequences.

Scores can be fractional, non-integer numbers. For instance, eliminating the mandatory use of stamps for postal services would likely receive no more than 0.5 points.

It is allowed but not recommended to assign scores such as 3.6 or 4.2.

Calculation of the overall regulation score

The overall score of a normative act is determined as the median of expert ratings. If a regulation affects multiple areas, the total score for the event is calculated as the sum of the regulation’s scores across these areas.

As noted earlier, the maximum score for an event in a single area is "+5" (and the minimum is "-5"). However, if an event impacts multiple areas, the scores are added together, meaning the total score can exceed the "-5" to "+5" range. This approach is used to highlight comprehensive reforms that significantly alter the rules of the game across multiple sectors of economic life.

If an event affects multiple sub-areas within the same area, experts provide a general assessment of the event for all sub-areas simultaneously.

In this case, if there is a need to analyze the impact of the event on a specific sub-area, the general assessment for the area will be divided by the number of sub-areas affected by the event.

For example, the editorial board has determined that the law on the application of the tax compromise affects two sub-areas of the area I2 "Public Finance" — 201 "Tax System" and 299 "Other in Public Finance." The experts assessed the regulatory act in the component "Public Finance" with a score of +1.0. Therefore, for calculating the event's assessment in sub-area 201 "Tax System," a value of +0.5 points will be used. The same applies to the event's assessment for sub-area 299 "Other in Public Finance.

Evaluation of reform progress by area

In addition to assessing specific regulatory acts, experts also evaluate the overall progress of reforms for each of the six areas of the Reform Index (on the same "-5" to "+5" scale) if relevant changes have occurred within those areas. When assessing Ukraine's progress in a particular area, experts consider the number and scores of normative acts included in that category. However, their final rating is based on their own judgment.

NB. The Reform Index is a subjective index that reflects experts' perceptions of progress in a particular area and the impact of specific events on the "rules of the game" in Ukraine.

If experts did not provide an assessment for the area, it is calculated based on the sum of the event assessments provided by the expert. If the sum of the event assessments exceeds the limit of "+5" or "-5" points, the area assessment is capped at those values.

If an expert evaluates less than half of the events in an area or does not evaluate any, the area's score is not calculated.

The final progress score for an area is determined as the median of all expert ratings for that component.

If no events occurred within an area, its score is set to "0."

Calculation of the Reform Index value

The Reform Index value is calculated as the simple average of the scores of its six components (areas).

The Reform Index editorial board considers reform progress to be satisfactory if the Index value remains above +2.0 points over a given period of time.

Example of calculating event scores, area scores, and the Reform Index

The Reform Index team and editorial board selected three regulatory acts in Round 147:

Constitutional Court decision on the unconstitutionality of anti-corruption legislation provisions regarding income and asset declaration (Code 101: Anti-Corruption). This regulation was included in Component I1: Public Governance.
Law standardizing the approach to local government budgets, regardless of the settlement's status. The editorial board determined that this law impacts the "Decentralization" sub-area (Code 102) and included it in Component I1: Public Governance.
Law on reinstating the "Baby Package" program. The editorial board concluded that this regulation affects the social protection sector and assigned it Code 604, including it in Component I6: Human Capital.

These regulatory acts and their corresponding Reform Index components received the following scores from experts:

	Expert 1	Expert 2	Expert 3
Constitutional Court decision on the unconstitutionality of anti-corruption legislation provisions regarding income and asset declaration — in Area I1: Public Governance	-4	-3	-5
The law standardizing the approach to local government budgets, regardless of the settlement's status — in Area I1: Public Governance.		0	0.1
Experts' ratings for Area I1: Public Governance as a whole	-4	-1	-5
The law on reinstating the "Baby Package" program — in Area I6: Human Capital.	1	1	1
Experts' ratings for Area I6: Human Capital as a whole	1	0	1

The score for each regulatory act is determined as the median of all expert ratings for that regulation.

If an event falls under two areas, the scores for those areas are summed. But it is not the case here.

	Expert 1	Expert 2	Expert 3	Event Score
Constitutional Court decision on the unconstitutionality of anti-corruption legislation provisions regarding income and asset declaration	-4	-3	-5	-4.0 = Median (-3; -4; -5)
The law standardizing the approach to local government budgets, regardless of the settlement's status		0	0.1	0.05 = Median (0;0.1)
The law on reinstating the "Baby Package"	1	1	1	1.0 = Median (1;1;1)

Next, we calculate the Reform Index value. It is determined based on the area scores. (Event scores do not directly affect the Reform Index value, but they may be used to calculate area scores if experts did not assign them at their discretion.)

As a result, the Reform Index for this round was -0.5.

	Expert 1	Expert 2	Expert 3	Area Score
Governance	-4	-1	-5	-4 = Median (-1;-4;-5)
Public Finance				0
Monetary Policy				0
Business Environment				0
Energy				0
Human Capital	1	0	1	1 = Median (0;1;1)
Reform Index value in this issue				The arithmetic mean of area scores: -0,5=(-4+0+0+0+0+1)/6

Annual audit

The Reform Index team and editorial board make every effort to maintain the quality and relevance of the Index at a high level. To achieve this, we conduct an annual audit of the Index, which includes:

a) Reviewing previously selected regulatory acts to identify any that were mistakenly included in the Index (e.g., temporary measures or decisions that do not qualify as reforms).

b) Identifying missed regulatory acts that were overlooked during the selection process but are important for a more comprehensive reflection of changes in the observed areas—especially in cases where the Index expands to cover new areas of observation.

During the audit, a decision may be made to create a new area or sub-area for evaluating regulations within the Reform Index. In this case, all previously assessed regulations are reviewed to determine their relevance to the new area and may be reassigned accordingly.

If a new regulation is added to the Index, a legal act is removed, or existing regulations are transferred between areas, the scores for the affected areas must be recalculated.

If the list of events within an area changes, its new score is recalculated as the sum of the event scores within that area, with a limit of "-5" to "+5". If no events remain in a given area after the changes, its score is set to "0."

These adjustments may also impact the overall Reform Index score for a given period. The Index is recalculated according to the standard method—by taking the average of the area scores.

Audit Conclusions

Download tables of changes based on audit results

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