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Between Progress and Pushback: Latvia and the Istanbul Convention

Posted on November 17, 2025 | Policy Brief

Protester holding a sign during a nighttime rally addressing Latvia Istanbul Convention Withdrawal.

On 25 September 2025, the Latvian Parliament voted to begin the process of withdrawing Latvia from the Council of Europe Convention on Preventing and Combating Violence Against Women and Domestic Violence (Istanbul Convention). This vote has been met with growing mass protests. We provide some background to understand the political and societal movements that underlie these events. Survey data shows that (a) violence against women is prevalent in Latvia and (b) there is public support for legislation aimed at combating a major expression of gender-based violence, such as intimate partner violence. However, the Latvian public appears polarized on perceptions about women’s and men’s roles in society, which might conflict with the Convention’s call for States to combat gender stereotypes. The vote’s significance in terms of Latvia’s geopolitical positioning between the EU and Russia also contributes to making the Convention a polarizing issue.

Introduction

Latvia ratified the Istanbul Convention in November 2023. The Convention entered into force on 1 May 2024. Since then, significant political debate has emerged around its continued implementation, with strong calls from some political parties and civic groups to withdraw. On 25 September 2025, the Saeima, Latvia’s parliament, considered withdrawal. On 31 October, Saeima voted to withdraw from the Istanbul Convention (56 in favor, 32 against). President Edgars Rinkēvičs, noting the potential harm to Latvia’s international standing, returned the law to the Saeima. Lawmakers then postponed further action until after the October 2026 elections. Mass protests erupted in the Latvian capital against the possible withdrawal. If the next Parliament pushes the withdrawal process to completion, Latvia will be the first EU country to withdraw from the Convention and the second among the original signatories to do so, after Turkey.

This policy brief outlines the background to the parliamentary vote and subsequent mass protests, traces the political process behind them, assesses their geopolitical significance, including Russian influence in Latvian politics, and considers whether the vote reflects a wider societal move away from the Convention’s core principles.

“We Don’t Say Gender Here”

The debate in Latvia centres primarily on concerns around the term “gender”  and how social roles are defined under the Convention, rather than its core aim of preventing violence and protecting victims. Specifically, Article 3(c) of the Convention defines gender as “the socially constructed roles, behaviours, activities and attributes that a given society considers appropriate for women and men.” This definition is instrumental in understanding violence against women as a fundamental expression of patriarchal norms that assign rigid roles in society to men and women. Such understanding is, in turn, considered a precondition for a holistic approach in combating gender-based violence (GBV) that includes legal protections but also profound cultural transformations. The controversy in Latvia surrounding this definition of gender, as opposed to biological sex, sits within a broader Latvian paradox. On the one hand, Latvia has a strong representation of women in the labour market and leadership – it ranks second in the European Union in terms of women in managerial positions (although this representation is weaker for political leadership; see Gerber, 2021, for more details). On the other hand, gender-role attitudes remain traditional: Latvia has one of the highest shares in the EU of respondents who believe caregiving is primarily a woman’s responsibility and consistently shows one of the largest gender gaps in time spent on care-related unpaid work (Ministry of Welfare of the Republic of Latvia, 2024; Statistics Latvia, 2024; European Institute for Gender Equality, 2023).

The concept of “gender” as a social construct has entered Latvian public discourse only recently, and there is no widely accepted everyday equivalent for the English word in the Latvian language. The term used in institutional and policy contexts, sociālais dzimums (literally “social sex”), is technical and unfamiliar to many Latvians. In general usage, “dzimums” refers to biological sex, and historically, Latvian policy and legal frameworks have operated under this binary understanding (Kalnbērziņa, 2023). Proponents of withdrawal, largely from conservative and nationalist political parties, argue that the Convention introduces ideas about “gender” that conflict with Latvian cultural values, family roles, and existing legal frameworks. For these actors, the Convention is perceived, or framed, less as a tool for protection against violence and more as a vehicle for social change initiated from outside, which, as such, allegedly undermines sovereignty.

Parties’ Positioning on the Convention

Against this background, political parties’ standing on the Convention has defined new fractures within the Saeima and in society more broadly, quickly becoming an increasingly polarizing matter with high significance for government stability, democratic representation, and alignment with EU core values. Although public debate has focused on ideological disagreements over gender, political dynamics played a significant role in the 2025 vote on withdrawing from the Istanbul Convention. New Unity, the largest party in the Saeima, led by Prime Minister Evika Siliņa, previously broke with its government coalition partners, the National Alliance and United List, to form a new coalition with the Greens and Farmers Union (ZZS) and The Progressives, partly to ensure the ratification of the Convention. The resulting government was sworn in September 2023 without new Parliamentary elections. The National Alliance and United List, long opposed to the treaty’s gender terminology, viewed this shift as a betrayal by New Unity and have since aligned more closely with Latvia First and For Stability! to push for withdrawal. Meanwhile, ZZS, a major player in Latvian politics, first supported ratification but later backed withdrawal, raising questions about policy consistency as its deputies effectively voted against their own earlier decision.

The result has left the governing coalition – still composed of New Unity, The Progressives, and ZZS – weakened and politically divided, with opposition parties exploiting the moment while the 2026 budget process remains critical. The situation also placed pressure on President Edgars Rinkēvičs, who eventually decided to return the withdrawal law to parliament, mentioning concerns over potential harm to Latvia’s international standing as a key factor behind his decision. He recommended that the issue should be reconsidered after the elections in 2026. Overall, political repositioning and coalition instability have become deeply intertwined with a key human-rights commitment. One side, mirroring ultra-conservative rhetoric across Europe, criticized the treaty as promoting “gender ideology,” encouraging sexual experimentation, and harming children. Supporters countered that these claims amounted to anti-EU rhetoric.

At the same time, public mobilisation has been significant. Over ten thousand people have gathered in multiple peaceful demonstrations in Riga to oppose withdrawal, expressing concern about potential setbacks to women’s rights and victim protection (Meduza, 2025; Hivert, 2025). International organisations have also highlighted that withdrawal would place Latvia in a unique position within the European Union, as no other EU member state has sought to leave this treaty (Amnesty International, 2025).

Geopolitical Significance

The Saeima’s vote to withdraw from the Istanbul Convention risks undermining Latvia’s long-built reputation as a Nordic-style liberal democracy with strong human-rights standards. If the withdrawal decision becomes law, Latvia would stand as the only country in the Nordic-Baltic Eight (NB8) outside the Convention, while Lithuania continues toward ratification. The move prompted an unusual diplomatic intervention: parliamentary speakers from several NB8 states and ambassadors from 15 close partners urged Latvia to remain in solidarity on violence prevention (Collier, 2025). These appeals were ignored. Internationally, Latvia would be grouped with Turkey as the only states to exit the treaty, raising concerns among partners about backsliding on women’s rights and domestic-violence protection. Observers warned that this decision could (and may still in 2026) reverse decades of work to portray Latvia as a modern, progressive European state, instead reinforcing outdated “post-Soviet” stereotypes. Rebuilding credibility requires diplomatic effort and clear, effective national action to protect victims.

It is also significant that the disagreement with other NB8 countries occurs at a time when, otherwise, there is growing cooperation between the NB8 members, in part in response to the geopolitical realities that make Latvia’s relationship with other EU and NATO members arguably ever more critical.

Geopolitics also matter because monitoring and survey data indicate that gender-related policy debates in Latvia are susceptible to wider geopolitical narratives. Approximately one-third of Latvian respondents believe that gender equality policies are “imposed by the EU,” a sentiment that is significantly more common among Russian-speaking residents (EC, 2017, 2019). Analyses of Latvian media ecosystems show that narratives opposing “gender ideology” are regularly amplified in Russian-language outlets, linking such policies to moral decline and loss of national identity (CEEPS, 2023). These framings align with broader Kremlin messaging, which positions European human-rights norms as threats to cultural sovereignty (EUvsDisinfo, 2024), though there is no evidence of direct Russian intervention. However, the Latvian State Security Service has noted that debates on gender and family values are used as entry points for polarisation and for undermining trust in Latvia’s Western partnerships (Latvian Security Service, 2024).

Taken together, this suggests that the controversy surrounding the Istanbul Convention does not occur in isolation. Rather, it intersects with information influence efforts that exploit pre-existing societal tensions around identity, norms, and Latvia’s European orientation.

What about Incidence and Perceptions Around Gender-based Violence in Society?

Meanwhile, survey data indicate that gender-based and domestic violence remain a significant and often under-reported problem in Latvia, suggesting that improvements in gender equality in the workplace have not yet translated into safety within households.

Estimates based on a 2021 survey on gender-based violence by the European Institute of Gender Equality (EGEN) show that one quarter of Latvian women aged 18-74 have experienced physical or sexual violence since the age of 15, and 16% have experienced violence from their intimate partner (IPV). 23% of these women had not told anyone about the violence before the survey interview. Notably, in 2022, Latvia also reported the highest femicide rate in the EU, with 2.9 women being intentionally killed by their partner, former partner, or family member per 100,000 inhabitants. The survey also depicts a culture not fully responsive to relatively subtle forms of gender-based violence and permeated with significant stereotypes. For instance, 53% of Latvian women and 41% of Latvian men believe or tend to believe that women who share their opinion on social media should expect sexist, demeaning and/or abusive replies (EU averages are 18 and 23% respectively); 45% of women and 47% of men believe that a woman who suffers sexual violence under the influence of alcohol or drugs is at least partially responsible (respective EU averages are 13 and 20%).

Nevertheless, a large majority of Latvians seem to support the notion that IPV should be legislated in some way. A FREE Network survey of a representative (based on age and gender) sample (around 900 individuals) of the Latvian population shows that, as of September 2021, nearly 90% of respondents thought that the State should have specific legislation addressing IPV, a key tenet of the Istanbul Convention. This average masks heterogeneity by gender, with relatively fewer men (81% vs. 97% of women) expressing support for such legislation. Consistently, more Latvian men (14%) than women (9%) appeared to think that a woman beaten by her partner should not seek any help, because it is a private matter. For comparison, in Sweden, a country that has long ratified the Convention (2014), these percentages are 4% and 3%, respectively. The same survey also confirms that the Latvian society is relatively less attuned to more subtle forms of IPV, namely, psychological violence. For instance, while the percentage of respondents in Latvia who believe that harmful beating is a form of IPV matches the percentage in Sweden (98%), only 77% of Latvians believe that the prohibition to dress as one likes is a form of IPV, against a Swedish percentage of 95%.

Finally, the FROGEE survey depicts a public opinion permeated by stereotypes about women and men’s roles in society: nearly 30% of Latvians appear to believe that if a job is scarce men should be given more right to a job than women, nearly a majority report agreeing with the statement that “what most women really want is a home and children”, and a majority (54%) thinks that a pre-school child suffers if his/her mother work.

In terms of attitudes toward DV legislation, it is also worth noting that the Latvian Parliament has recently strengthened its legal system to protect victims of domestic violence by approving, in February 2022, a law granting the police the right to separate the victim of domestic violence from the perpetrator, even without the victim’s request. The FROGEE survey reveals that public knowledge around this provision at the time of discussion within the government was relatively limited (30% of survey respondents reported being aware of such discussion, see Berlin-Perrotta et al., 2024), signalling that decisions around DV legislation did not feature prominently in the public debate, at least at the time of the interview.

In sum, the data suggest that gender-based violence and IPV are pressing issues in the Latvian context. The public does not seem to be especially polarized on the extent to which major expressions of IPV should be legislated. Beliefs about more subtle forms of violence, or violence that is more clearly an expression of a patriarchal culture that assigns specific roles to women and men, appear to be more polarized; the same can be said more generally about beliefs on gender roles.

Conclusion

In the face of the recent Latvian Parliament vote to withdraw from the Istanbul Convention and the growing public protests against it, we provided some background to understand the political and societal movements that underlie these events. Our analysis starts from the observation that, overall, the Parliamentary vote is not so much about the main purpose of the Istanbul Convention, which is to fight gender-based and domestic violence, but rather about the Convention’s definition of gender as a social construct. We document that at the societal level, there is general support for legislation aimed at combating a major expression of gender-based violence, such as IPV. However, the Latvian public appears to be more polarized on perceptions about women’s and men’s roles in society, with more traditional views being popular among large shares of the population.

The Parliamentary opposition to the Convention, therefore, can be at best understood as an expression of society’s unease with less traditional gender-based roles, coupled with political parties’ positioning with respect to an increasingly weakening governmental majority. However, framings of the Convention’s definition of gender as an attempt to override the binary definition of sex, despite this being neither a direct nor an indirect tenet of the Convention, might also have contributed to inflaming the related debate. These framings have charged stances on the Convention with significance in terms of Latvia’s geopolitical positioning between the EU, of which the country has long been a member, and Russia, a powerful reference especially for the ethnic Russian population. These factors combine to make stances on the Convention profoundly divided at a time when the country is exposed to increased external threat by Russia’s heightened aggressiveness in the Baltic region.

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Estimating Tax Evasion in Europe: Direct vs. Indirect Survey Methods

Posted on November 10, 2025 | Policy Brief

Stack of €50 euro banknotes in partial shadow, symbolizing hidden cash and tax evasion survey methods.

How can societies accurately gauge the share of the workforce engaged in the shadow economy when direct questions inspire selective silence or evasion? This policy brief presents findings from a new cross-country survey experiment combining direct questions and an indirect “list experiment” method, conducted in Latvia, Italy, and Denmark. Results show that, contrary to expectations, indirect methods did not yield higher estimates of undeclared work compared to direct questions. The research reveals that in environments with high tax morale and a substantial shadow economy, both direct and indirect measurements can be biased. Sharing information about prevailing tax norms with respondents can improve survey consistency, informing future tax evasion measurement and anti-evasion policymaking.

Social Desirability Bias in Tax Evasion Surveys

Surveys on tax evasion often provide respondents with multiple response categories beyond simple “yes” or “no.” For example, the survey for Latvia (Kantar, 2024) found that 3% openly acknowledged undeclared income, but refusal (2%) and “hard to say” responses (4%) illustrate additional uncertainty and possible underreporting due to social desirability bias when respondents consciously avoid disclosing disapproved or illegal acts to maintain a positive self-image or avoid perceived censure. This bias is potentially serious in tax compliance research, where both tax morale and fear of consequences can shape reporting behavior.

Indirect questioning techniques, such as list experiments, aim to reduce social desirability bias by allowing individuals to conceal answers within a broader set of innocuous items (Blair et al., 2020). In a typical list experiment, respondents are randomly assigned to receive either a list of non-sensitive items or the same list with an additional sensitive item; by comparing the mean number of items endorsed across groups, researchers estimate the prevalence of the sensitive behavior without requiring explicit disclosure (Blair & Imai, 2012; Glynn, 2013).

Recent empirical work employing list experimental designs has significantly advanced the understanding of tax evasion dynamics across diverse fiscal and cultural contexts. Fergusson, Molina, and Riaño (2019) analyzed VAT evasion among Colombian consumers and found minimal social desirability bias, with list experiments and direct self-reports yielding similar evasion rates (~20%). They attributed this to the normalization of evasion in high-informality regions, where descriptive norms (perceived prevalence of evasion) outweighed injunctive norms, reducing stigma.

This contrasts with Genest-Grégoire et al. (2022), who detected significant bias in Canadian income tax self-reports: list experiments revealed 13.5% income tax evasion (compared to 5.6% in direct questions) and 28.5% consumption tax evasion (compared to 26.2% in direct questions). The study identified stronger stigma around income tax evasion, particularly due to institutional withholding mechanisms that make income tax evasion more difficult compared to consumption taxes. Authors posit that divergent motivational mechanisms underlie these evasion types: income tax noncompliance triggers stronger moral condemnation due to its association with deliberate fraud, while consumption tax evasion is often rationalized as a “victimless” violation of complex regulations.

Hence, high tax morale, while generally associated with greater compliance, also leads individuals to conceal or misrepresent socially undesirable actions more rigorously, which amplifies social desirability bias in survey responses. This effect is particularly pronounced in environments where tax evasion is strongly stigmatized, as respondents may feel increased pressure to align their self-reports with prevailing moral standards, even if those reports do not reflect their true behavior. Conversely, in contexts where evasion is normalized or perceived as widespread, the stigma associated with noncompliance decreases, potentially making individuals less reluctant to report such behavior.  Nevertheless, both direct and indirect measurement techniques may still fail to accurately capture the true prevalence. This is because reduced stigma alone does not eliminate other sources of bias, including cognitive complexity, survey design imperfections, and strategic respondent behavior, such as misinterpreting instructions or using responses to send political or social signals beyond truthful self-disclosure.

Recognizing these persistent methodological challenges, this policy brief presents evidence from a study employing both direct and indirect questions on tax evasion across three European countries with varying levels of tax morale and shadow economy prevalence. By analyzing how social contexts influence reporting behaviors, the brief provides insights into the effectiveness and limitations of these survey approaches in different normative environments.

Approach

The research used a nationally representative sample of 6,915 respondents from Latvia, Italy, and Denmark, utilizing Norstat online panels in the respective countries. It was administered as an online Computer Assisted Web Interview (CAWI) in May 2024. Respondents in the study were randomly assigned to one of two list experiment conditions: half received a 5-item list including the sensitive tax evasion item, while the other half received a 4-item list without the sensitive item (see Figure 1). Importantly, all respondents—regardless of their list group assignment—were asked a direct question about undeclared income at the end of the survey. This design allows comparison between indirect and direct measures within the same individuals, clarifying reporting patterns and social desirability effects.

Figure 1. Indirect question for the control group of the list experimental study

Notes: The 5-item list for the treatment group included additional activity “Received all or part of the income without paying taxes (received money “off the books”)” and asked to indicate max 5 items. The activities were listed in random order for each respondent.

All participants also completed a placebo list experiment, in which both lists – i.e., containing 4 or 5 items – consisted entirely of non-sensitive behaviors (see Figure 2). Correspondingly, everyone was also asked a direct question about the non-sensitive behavior (“Bought a house or apartment (including on credit)”), thereby mimicking the structure of the tax evasion list experiment. This design allowed controlling for possible cognitive errors in filling out a complicated survey task, such as a list survey question, that are unrelated to social desirability bias.

In addition, half of all respondents were primed to information with actual data on how many citizens in their country consider tax evasion unacceptable, sourced from a recent representative survey that was carried out in January 2024. In this pre-survey, just 39% (i.e., minority) found tax evasion wholly unacceptable in Latvia; 59% in Italy, and 53% in Denmark (i.e., majority). The goal of this priming was to test whether informing respondents about local norms affected reporting patterns.

Figure 2. Placebo list of the study

Notes: The 5-item list for the treatment group included additional activity “Bought a house or apartment (including on credit)” and asked to indicate max 5 items. The activities were listed in random order for each respondent.

Key Findings

Results show that indirect list experiment estimates of undeclared work (4.1% overall) did not significantly differ from direct question estimates (7.2%). Hence, respondents did not find the topic sensitive enough to avoid honest answers in either format.

Priming respondents with information about the unacceptability of tax evasion in their country had no statistically significant effect on the direct measure of admitted undeclared income, nor on aggregate estimates from the indirect list experiment, indicating that willingness to disclose undeclared work remained unchanged regardless of norm priming.

Figure 3. Estimates of tax evasion from the list experiment and direct question

Source: Author’s estimate from the survey results.

However, country-level analysis revealed an anomaly in Italy: the list experiment produced an implausible negative estimate, driven by some respondents who marked zero items in the treatment list but later admitted to undeclared work in direct questioning. While this inconsistent response pattern was most prominent in Italy, the country with the highest tax morale (as based on pre-survey), and the largest shadow economy across the three countries (Medina and Schneider, 2018), it has also been recorded in the other two countries. Specifically, the pattern was observed among 11% of respondents who admitted to tax evasion in the direct question in Italy, compared to 5–7% in Latvia and Denmark.

Considering the complexity and unusual formulation of the question for the list experiment, one might attribute this pattern to a respondent’s confusion or cognitive error. However, this explanation is unlikely because of the responses to the placebo list experiment, where all list items and a direct question are non-sensitive. There, the specific response pattern – respondents reporting zero items on the list question while simultaneously admitting to the direct question – is observed substantially less frequently, indicating a low baseline error rate for misunderstanding or inconsistent reporting on non-sensitive items.

The comparison between the sensitive and placebo list experiment results indicates that the anomalous pattern observed in the tax evasion list experiment is unlikely to be due to confusion with the survey format, but rather represents a deliberate, context-specific form of strategic misreporting. One possible reason for this pattern might be that some Italians who admit to tax evasion in the direct question may believe that inflating shadow economy estimates will spur stronger policy reactions or public debate. In this way, their answers to the survey may represent strategic “signal sending.”

Priming respondents with accurate information about societal norms regarding the unacceptability of tax evasion – an approach referred to as vignette priming – consistently reduced the occurrence of this contradictory response pattern. Fewer respondents reported zero items in the list experiment while admitting to evasion in direct questioning, a change observed universally across the three countries.

Two main interpretations of the effects of such vignette priming can be suggested. The first interpretation, related to the strategic motive discussed above, suggests that vignette priming helps align respondents’ understanding of prevailing social norms on tax evasion. This improved awareness discourages deliberate misreporting, thus improving the overall validity and reliability of the survey’s methodology, even if it does not increase overall admissions of tax evasion itself. An alternative explanation is that vignette priming helps respondents better recognize and correctly count items in the list experiment, thereby improving response accuracy and alignment across question formats.

In other words, norm priming fosters more consistent survey responses, whether by reducing the temptation to manipulate results or by increasing recognition and attention among respondents.

Conclusion

Efforts to estimate tax evasion through surveys must strike a balance between the limitations of direct self-reports and the incomplete protection against bias afforded by indirect methods. This study finds that, in the surveyed countries, list experiments do not yield higher or more accurate prevalence estimates than direct questioning. However, particularly in high-morale environments with substantial shadow economies, some respondents may strategically manipulate survey results in hopes of prompting political action.

Norm priming through vignettes enhances experimental integrity and reduces strategic errors, underscoring the importance of accounting for social context in survey designs. For tax policy makers, measurement should always be validated with error diagnostics and social context cues, and survey formats should be adapted for cross-country comparability and public trust.

Acknowledgements

The study is financed by the European Commission’s Marie Sklodowska-Curie Individual Fellowship Action (Grant agreement ID: 101109679).

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Improving Women’s Political Representation Beyond Gender Quotas

Posted on October 20, 2025 | Policy Brief

Women waving Turkish flags during a political rally, symbolizing support for Political Representation Gender Quotas in Turkey.

While gender gaps in politics have narrowed considerably in recent decades, large disparities remain in several countries, especially those where binding gender quota laws have not been adopted. What are alternative pathways for increasing women’s political representation in these countries? We investigate one such pathway in the context of Turkey. A conservative dominant party, Erdogan’s AKP, is often challenged in local elections by a Kurdish party that promotes gender equality in electoral lists and in society more generally. Exploiting variation in Kurdish party wins in municipal elections during 2009-2019, we find that the Kurdish party winning leads AKP to increase its share of female candidates by 25 to 30% in the next election. Our data suggests that AKP’s response is primarily motivated by strategic considerations aimed at appealing to voters who may value gender-balanced representation. The implications of these findings extend beyond Turkey, suggesting that one party empowering women can help reduce gender gaps in lists across the board.

Pathways to Gender Equality in Political Participation

Across the world, women have historically been underrepresented in political institutions, but considerable progress has been made in recent decades. Legislated gender quotas are credited for having contributed significantly to such progress, especially in developing countries (Berevoescu and Ballington, 2021). Across different contexts, well-designed quotas have been shown to successfully increase the share of women in electoral lists and, although to a lesser extent, in legislative and leadership positions (see Campa and Hauser, 2020 for a review of this literature).

Research also suggests that the electoral system could influence women’s political participation, with more women being elected under proportional rather than majoritarian systems (Profeta and Woodhouse, 2022) and, within proportional systems, through closed rather than open lists (Gonzalez-Eiras and Sanz, 2021). Moreover, recent findings suggest introducing term-limits as a tool to boost women’s electoral prospects (Kansikas and Bagues, 2025).

However, despite the positive trends worldwide, large gender disparities in political representation persist in many countries. Some of the most entrenched inequalities are found in states governed by authoritarian or semi-authoritarian regimes promoting conservative values, where legal reforms to enhance gender equality are unlikely. For instance, the map in Figure 1, which assigns lighter shades of blue to countries where gender gaps in political empowerment are larger, shows that across Europe and Central Asia, four of the five lowest scoring countries are authoritarian or semi-authoritarian, namely Azerbaijan, Kazakhstan, Hungary and Turkey, which Freedom House ranks as “partly free” or “not free”.

Figure 1. Gender gaps in political empowerment

Source: World Economic Forum. Gender Gap Report 2025. Note: The figure shows country scores on the World Economic Forum’s Political Empowerment Index. Lighter shades of blue indicate a larger gender gap in political empowerment.

What are alternative pathways that may increase women’s political participation in such contexts, where gender quotas and other representation-enhancing electoral reforms are unlikely to be introduced?

In recent work – Campa et al. (2025) – we study one such pathway in the case of Turkey, namely the emergence of a competitive, albeit not dominant, party that commits to gender equality in lists and beyond.

Women’s Political Participation in Turkey

Despite early enfranchisement — municipal voting rights in 1930 and full suffrage in 1934 — women’s political representation in Turkey remains low. Women are severely under-represented in Parliament at around 20% after the 2023 elections. Turkey is also one of the 24 countries worldwide where women’s representation in local governance is below 15% (World Economic Forum). The share of female mayors was less than 0.5 percent between 1930 and 2004 (Koyuncu and Sumbas, 2016), with a minor increase observed since 2005. During this period, the share of female candidates in electoral lists for the municipal council also increased by 6 p.p., and the share of female councillors increased by 5 p.p., but as of 2019, these shares were still severely low, at, respectively, 14 and 12%.

AKP Versus the Kurdish Party

The under-representation of women in local governance masks stark differences between parties, especially between the ruling party, Erdogan’ Justice and Development Party (AKP henceforth), and one of the main opposition parties in local elections, the Kurdish party, which ran in 37% of the elections held between 2009 and 2019 and won 19% of them.

AKP is ideologically conservative and with a religious base. During the 20 years in power, it passed no law to increase women’s representation in politics, despite the vast gender gaps at all levels of government.

The Kurdish party instead stands out in the Turkish political landscape for its commitment to gender equality in many areas of society, including politics. For instance, currently the party pledges to enact a gender-mixed co-leadership system at the party level as well as a “zipper quota” in its electoral lists, and more generally advocates for a gender equal society “starting with the local governments” (see the party’s official website). Both the mixed-leadership system and a version of the candidate quota have been in place for two decades.

As a result, the share of female candidates for the municipal council is much higher in electoral lists associated with the Kurdish party, at 21% on average over the period 2009-2019, as compared to AKP’s 11%. The Kurdish party’s share of female candidates is also remarkably high in comparison to the other major opposition party, the Republican People’s Party (CHP henceforth), which averages 13% female representation in its local electoral lists. The higher feminisation of the Kurdish party’s lists is reflected in the share of women elected: on average, only 6% of the councillors elected with AKP are women; this number goes up to 12% for CHP and jumps to 28% for the Kurdish party (see Figures 2 and 3).

Figure 2. Female share in candidate lists in municipal elections in Turkey.

Source: Author’s calculation based on own digitisation of data released by Turkey’s Higher Election Council (YSK). Note: The figure shows the share of women in candidates’ lists for the election of municipal councillors by party, focusing on the major party that governs at the central level (AKP) and its two main competitors at the local level (CHP and the Kurdish party).

Figure 3. Share of women elected as municipal councillors in Turkey, by party.

Source: Author’s calculation based on own digitisation of data released by Turkey’s Higher Election Council (YSK). Note: The figure shows the share of women elected as municipal councillors by party, focusing on the major party that governs at the central level (AKP) and its two main competitors at the local level (CHP and the Kurdish party).

We also note that the Kurdish party tends to elect a much larger share of female mayors than its competitors. According to the High Election Council (YSK) Election Statistics, in the 2009, 2014, and 2019 elections, the share of female mayors elected by the Kurdish party was respectively 21, 30, and 45%, whereas AKP elected less than 1% of female mayors in 2009, and this percentage remained stable at 1% in the 2014 and 2019 elections.

The Effect of a Kurdish Party’s Win on AKP’s Behaviour

Against this background and given the recent improvement in the share of female candidates across all parties (see Figure 2), we ask whether a Kurdish party victory prompts AKP to improve the gender equality in its lists in subsequent elections. By studying this question, we hope to contribute to shedding light on the forces that might help close gender gaps in political representation in relatively traditional societies governed by authoritarian or semi-authoritarian governments, where the under-representation of women in political institutions is particularly severe and gender quotas are unlikely to be adopted.

Using a novel dataset covering municipal council elections in Turkey in 2009, 2014, and 2019 —including candidates’ gender —we exploit within-municipality variation in Kurdish party victories to identify their impact on AKP’s female candidates’ share. We find that a Kurdish party win leads to a 2.8 to 3.4 p.p. increase in AKP female share of candidates in the next election, representing a 25–30% increase from a baseline of 11 p.p.; the estimate is robust across different econometric specifications, and we document that AKP lists were not on a differential trend in terms of share of female candidates in places where the Kurdish party wins – in other words, the increase in female candidates is only subsequent to the Kurdish party victory, strongly suggesting that it is indeed the result of AKP’s response to the growing popularity of the Kurdish party, and not the product of a secular trend of growing women’s representation. We also find that a win from another major opposition party, CHP, prompts smaller and only marginally statistically significant increases in female representation, suggesting that it is not just electoral competition that would force AKP to improve the selection of its candidates, but the Kurdish party’s gender focus that matters.

Why does AKP respond to a Kurdish victory by increasing its share of female candidates? Its behaviour could be strategic — appealing to voters who appear to care about some form of gender balance in lists — or stem from learning through exposure to capable female councillors. To gauge the relative importance of these different explanations, we exploit a special feature of the Turkish electoral system, namely parties submitting, together with the “main” list of candidates to be selected by voters, a “special quota” list containing the candidates directly assigned to the municipal council by the party if it wins the plurality vote. Such a list is not very salient to voters, and often not visible to them. We find no increase in women on AKP’s special lists after the Kurdish party wins, indicating the motive is likely an electoral strategy rather than internal reform.

Conclusion

Across the world, women have historically been underrepresented in political institutions. While gender gaps in political participation have narrowed considerably in recent decades, particularly due to the adoption of gender quotas, large disparities remain in many countries. Some of the most entrenched inequalities are found in states governed by authoritarian or semi-authoritarian regimes, where legal reforms to promote gender equality in politics are unlikely. Understanding alternative pathways for increasing women’s political representation in these contexts is a pressing challenge. We investigate one such pathway in the case of Turkey.

Although the ruling party, AKP, has remained resistant to gender-based reforms, it has increasingly faced local-level competition from a Kurdish party that consistently champions gender equality. Leveraging a new dataset covering municipal council elections in 2009, 2014, and 2019, we find that when the Kurdish party wins a municipality, AKP increases the share of female candidates in its master list by approximately 25 to 30% in the subsequent election.

The implications of these findings extend beyond the Turkish case. In political systems where institutional reform is unlikely, competitive pressure from parties that prioritise gender equality can still drive changes in political behaviour. Even without quotas, such parties can shift norms and electoral expectations, thereby inducing rival parties to adopt more inclusive practices.

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

How the Combination of Income and the Quality of Local Conditions Affects Well-being in Old Age

Posted on October 13, 2025 | Policy Brief

Elderly couple sitting on a park bench, enjoying a peaceful moment together, symbolizing financial stability and income well-being in Poland.

Contemporaneous income and the quality of local living conditions have both received recognition in the literature as important determinants of subjective well-being. However, little is known about their joint impact and the possible moderating influence each may have on the relationship with the well-being of the other. In a recent study (Myck et al. 2025), we investigated the role of income and quality of local area on different dimensions of well-being of older adults in Poland. Our findings show that a higher quality of local conditions amplifies the association between income and well-being, which implies that high-income older individuals tend to benefit more from improved local conditions. Our findings suggest that low incomes may constrain older people from taking advantage of local public services, and thus draw attention to policies aimed at improving access to these services, especially in low-income, peripheral areas. While the results also point towards broad benefits of targeted income transfers, it is notable that their effective translation into higher well-being strongly varies with the quality of municipal local conditions.

Introduction

As most developed countries face rapid population ageing, governments continue to seek effective policies to support older adults. Identifying effective policy solutions remains vital in supporting different population groups, including the growing group of older citizens. In this brief, we present a summary of results from a recent study (Myck et al. 2025), in which we examine the role of the combination of incomes and local conditions for the well-being of older individuals. The analysis is conducted on data from Poland, a country characterised by rapid population ageing and a recent prioritisation of monetary transfers in the policy mix, with much less attention given to the financing of local and centrally funded public services. The analysis aims at understanding the role of the quality of local conditions for the well-being of older individuals, and at identifying how the level of income modifies this role. In other words, we examine if higher income affects individual well-being differently in high- compared to low-quality regions.

Subjective well-being has for a long time been examined in relation to individual socio-economic characteristics, like education, health, material conditions and social relations (Layard 2006, Dolan et al. 2008). Many authors have also stressed the importance of the local environment and the quality of public services (Aslam and Corrado 2012), although the influence of local conditions on well-being has been documented mostly at high levels of aggregation (countries or large sub-national regions; Perovic and Golem 2010; Colombo et al. 2018). Principally, though, the combined implications of local conditions and the material situation at the individual level on well-being remain largely underexplored. In our study we explore granular local conditions at the level of municipalities, allowing us to examine the relationship accounting for significant within-country differences in a shared institutional framework. Such disaggregation seems especially important in analysing the quality of life of the older population due to the likely relevance of local health and care services, high-quality transport options, local safety, green spaces and other public services.

Individual and Local Factors

To examine the direct and moderating roles of local conditions on well-being and their relation with income, we rely on a combination of individual- and local-level data (for methodological details, see Myck et al., 2025).

The individual-level data comes from the Polish part of the Survey of Health, Ageing and Retirement in Europe (SHARE). This dataset provides detailed information on health, labour market activity, material situation and social relations of individuals aged 50 years and above for almost all European countries. In addition to the usual socio-demographic information (age, gender, education, marital status, and income), SHARE collects several self-reported measures of physical and mental health, as well as a number of broad dimensions of quality of life. One such measure is CASP, which aims to capture the quality of life among older individuals in four important dimensions:  Control, Autonomy, Self-realisation and Pleasure. With twelve questions (three for each dimension), each participant evaluates how often they feel in a certain way or experience certain situations. The final outcome is a summed score in the range of 12 to 48, with higher values indicating a higher quality of life.

For the purpose of our analysis, the individual dataset has been augmented with regional-level information. To capture as much variation in the quality of local conditions as possible, we rely on 14 indicators collected either at the municipal or county level (respectively, the bottom and middle tiers of the administrative division of Poland). They represent the quality of localities in terms of economic factors, housing infrastructure, green spaces and health services. Given the high correlation between these regional variables, they have been combined into a single local quality index using principal component analysis (PCA). The index is calculated on the municipality level, with higher values representing better quality of local conditions. Figure 1 below shows the spatial distribution of the index across all Polish municipalities, highlighting significant regional differences in the local quality of life in Poland, particularly between the Western and Eastern parts of the country.

The Role of Income and Local Conditions for Individual Well-being

We examine the relationship between well-being, contemporaneous household income, and local conditions in a panel random effects regression, controlling for an extensive vector of covariates. Our results confirm a strong positive association between income and well-being, with a 100 per cent increase in disposable income corresponding to increases of up to 0.66 points on the CASP scale. While this may seem small, given the scale of the CASP measure, the effect is similar to that of being employed relative to being retired (0.56 CASP points), married relative to being widowed (0.78), and very close to the average difference in CASP between men and women, conditional on other controls (0.57).

Figure 1. Distribution of the index capturing the quality of local conditions at the municipality level in Poland

Note: Municipality borders are in white, regional borders in yellow. Source: Myck et al. (2025).

We also find that the regional index is positively correlated with well-being. Importantly, though, since income and the quality of regional conditions are strongly correlated, we examine the importance of their interaction in the well-being regression. This facilitates the investigation of the differential reaction of well-being to income for different values of the index (and vice versa). In Figures 2a and 2b we present average marginal effects of each one of the variables as calculated at different percentile levels of the other.

The results indicate noticeable variation in the strength of the association between income and well-being, depending on the quality of local conditions (Fig. 2a). Income seems to matter little at the lower end of the distribution of the regional index and much more in localities of better quality.

Figure 2. Average marginal effects (AME) of income and the regional index on well-being

a) AME of log(Income) across distribution of the regional index

b) AME of the regional index across the distribution of log(Income)

Note: Figures show point estimates of AMEs and the corresponding 90% confidence intervals. Well-being is measured with a CASP score of 12-48. Source: Myck et al. (2025).

While the growing role of income as local conditions improve might seem surprising, it well aligns with the fact that consumption of some publicly provided goods and services is dependent on or related to income: apart from the obvious examples such as culture, more important dimension of access to public services might relate to the areas where rich and poor people live, the quality of public transport and easy access to highly localized public services.

Strong positive effects of regional quality on well-being are also observed among respondents with the highest incomes (Fig. 2b). The association for low-income individuals cannot be statistically differentiated from zero.

Conclusion

The results of our study suggest that for high-income older individuals in Poland, better local conditions are reflected more strongly in their well-being compared to that of low-income residents. For the poorest older individuals, improvements in local conditions have little or no bearing on their well-being. At the same time, increases in income are associated more strongly with well-being in areas with the highest levels of quality of local conditions.

The policy implications of our results thus highlight the detrimental consequences of the combination of low income and poor quality local conditions for individual well-being and the challenges to improving the latter. Our results suggest that effective policies aimed at increasing the well-being of older adults require a careful combination of direct and indirect measures, or otherwise a combination of support focused on income transfers with provision of, and better access to, the relevant range of public goods and services.

Our results also point towards targeted rather than simple universal income transfers: greater income increases are needed in low-quality areas compared to top-quality ones to secure the same change in well-being. Moreover, the fact that local quality translates differently into well-being for the rich and the poor suggests that there are significant disparities in access to local services by income level. This, in turn, calls for developments in access and mobility opportunities and investments in local public services to ensure better access to these services among low-income residents. Local policies in high-quality areas should become more sensitive to the needs of poorer older inhabitants, while improvement of local conditions in low-quality regions needs to accompany direct transfer policies for these to effectively translate into a higher quality of life of older individuals.

Acknowledgement

The authors acknowledge the support from the Swedish International Development Cooperation Agency, Sida.

The original study (Myck et al. 2025) was financed through a joint grant of the Polish National Science Centre (NCN, project no: 2018/31/G/HS4/01511) and the German Research Foundation (DFG, project no: BR 38.6816-1) in the international Beethoven Classic 3 funding scheme (project AGE-WELL).

References

  • Alesina, A., Di Tella, R. and MacCulloch, R., 2004. Inequality and happiness: are Europeans and Americans different? Journal of Public Economics, 88 (9–10), 2009–2042.
  • Aslam, A. and Corrado, L., 2012. The geography of well-being. Journal of Economic Geography, 12 (3), 627–649.
  • Colombo, E., Rotondi, V. and Stanca, L., 2018. Macroeconomic conditions and well-being: do social interactions matter? Applied Economics, 50 (28), 3029–3038.
  • Myck, M., Oczkowska, M. and Kulati, E., 2025. Income and well-being in old age: The role of local contextual factors. The Journal of the Economics of Ageing, 30, 100551.
  • Perovic, L. M. and Golem, S., 2010. Investigating Macroeconomic Determinants of Happiness in Transition Countries: How Important Is Government Expenditure? Eastern European Economics, 48 (4), 59–75.
  • Rossouw, S. and Pacheco, G., 2012. Measuring Non-Economic Quality of Life on a Sub-National Level: A Case Study of New Zealand. Journal of Happiness Studies, 13 (3), 439–454.

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Mapping Ukrainian CSOs in the Nordic-Baltic Region: Areas of Advocacy and Common Challenges

Posted on September 29, 2025 | Policy Brief

Modern cityscape at dusk with illuminated glass tower in central Stockholm, symbolizing innovation and cooperation, related to mapping Ukrainian CSOs.

This policy brief maps Ukrainian civil society organizations (CSOs) active in the Nordic-Baltic region (NB8), based on a 2025 survey and discussions at the Nordic Ukraine Advocacy Summit. It highlights the diverse landscape of advocacy groups, ranging from long-established diaspora organizations to initiatives formed after Russia’s full-scale invasion of Ukraine in 2022. The analysis highlights key challenges, such as the lack of coordination mechanisms, uneven access to political platforms, and limited technical capacity. Closer cooperation with policymakers and donors would benefit both sides, utilizing CSOs’ expertise in facilitating better integration of displaced Ukrainians and improving inclusive policymaking. It is important to recognize the role of Ukrainian civil society not only as a facilitator in the immediate support efforts but also as a strategic partner in shaping Europe’s long-term peace architecture.

Introduction

Russia’s full-scale invasion of Ukraine in 2022 caused a massive migration of Ukrainians settling across the EU, including the Nordic-Baltic region. This movement gave rise to a wide range of new initiatives, including advocacy, cultural diplomacy, support for integration, and humanitarian efforts. Alongside long-standing diaspora organisations, these newly formed groups quickly became vital actors mobilizing resources, amplifying Ukraine’s voice internationally, and contributing to host societies. In light of these dynamics, it is worthwhile to understand how these organizations operate and what challenges they face.

To this end, the Nordic Ukraine Forum, with the support of the Swedish Institute, conducted a Survey of Nordic-Baltic Ukrainian Civil Society Organisations 2025: Mapping Areas of Advocacy, Structures, and Common Challenges between March and May 2025 (Zubkovych et al., 2025). This study examined Ukrainian CSOs active in both the Nordic-Baltic region (NB8) and Ukraine, based on a structured survey of 17 organizations (from an initial pool of 42). Notably, the survey focused exclusively on organizations with advocacy for Ukraine as a main activity, excluding smaller initiatives dedicated primarily to humanitarian relief, such as collecting clothes or food. Additionally, the output of the survey has been supplemented by the discussions and outcomes from the Nordic Ukraine Advocacy Summit (NUAS), held in Oslo in June 2025, with 30 participating CSOs. Together, these sources provide a unique empirical overview of the role and activities of Ukrainian advocacy CSOs in the Nordic-Baltic region.

Survey Results

Areas of Advocacy

The survey covers Ukrainian advocacy organisations based in the Nordic-Baltic region, where Sweden-based organisations or initiatives made up over half of the total respondents. The survey represents both long-established diaspora organizations and newer initiatives formed in response to Russia’s full-scale invasion of Ukraine in 2022. About one-fourth of CSOs were established before 2014 (the earliest in 1997), while the majority were founded after 2022, reflecting the urgent mobilization of diaspora communities during the war.

Surveyed CSOs represent a broad mix of leadership roles, gender, professions, languages, membership sizes, and funding models. Most remain volunteer-driven and rely on short-term or project-based funding. More detailed demographic and organizational profiles can be found in the report by Zubkovych et al., 2025. Survey results show that Ukrainian CSOs in the NB8 focus on a wide range of areas. The most common activities include advocacy for Ukraine’s military support, cultural diplomacy and education, as well as support for displaced Ukrainians and their integration (Figure 1).

Figure 1. Focus areas of Ukrainian CSOs in the Nordic-Baltic region

Source: Zubkovych et al., 2025.

Many organizations also prioritize working with media, countering disinformation, humanitarian aid to Ukraine, and advocacy for Ukraine’s EU integration, followed by legal aid, human rights, and gender issues.

Figure 2 presents the main types of activity through which Ukrainian CSOs pursue their objectives. As shown, Ukrainian CSOs perform their tasks by raising social media awareness (82%) and organizing events in support of Ukraine (82%). Other key activities include demonstrations, media outreach, and direct engagement with policymakers. These findings suggest the need to examine more closely which social media platforms are being used, especially given the increasing risks of disinformation and propaganda.

Figure 2. Types of activities of Ukrainian CSOs in the Nordic-Baltic region

Source: Zubkovych et al., 2025.

Main Challenges

At the same time, the survey reveals the main challenges that Ukrainian CSOs in the Nordic-Baltic region have been facing (Figure 3). In particular, the respondents mentioned the absence of structured coordination mechanisms, which leads to duplication of efforts and uneven visibility.

For instance, while several groups in Sweden and Norway focus on humanitarian aid, their activities often run parallel rather than in partnership. The lack of common platforms or umbrella networks reduces their collective influence and makes it more challenging to articulate shared priorities to governments and donors. Without stronger horizontal coordination, CSOs risk competing rather than complementing one another in their advocacy and support work.

Figure 3. Main challenges for Ukrainian CSOs

Source: Zubkovych et al., 2025.

Funding emerged as one of the most pressing issues in the survey. Most organizations reported reliance on short-term, project-based grants or donations. Many CSOs lack multi-year funding, which makes strategic planning and staff retention almost impossible. This precarious situation often leads to volunteer burnout and creates uncertainty about the future of their programs. Donor practices have unintentionally exacerbated this vulnerability by neglecting the long-term capacity-building needs of diaspora CSOs.

The survey further highlights significant disparities in institutional access. Larger CSOs, particularly those based in capital cities such as Stockholm, Oslo, and Helsinki, enjoy greater visibility and are more likely to receive invitations to political consultations. By contrast, smaller groups in regions often remain excluded from policy-making processes, despite being closer to affected communities. This imbalance risks creating unequal representation, where only a handful of well-resourced organizations shape public debate, while others remain invisible. Respondents from Baltic states also pointed out that while they are engaged in cultural diplomacy and integration activities, they struggle to gain recognition from national ministries or international donors. The result is a fragmented advocacy landscape, where not all voices are equally heard.

Many organizations reported gaps in technical capacity, particularly a lack of specific skills in fundraising, project management, digital communication, lobbying, and public outreach. Additionally, the survey highlighted the dual role that Ukrainian CSOs currently play outside Ukraine. On one hand, they act as advocates for Ukraine internationally, lobbying for sanctions, military aid, and continued political support. On the other hand, they provide practical integration services for displaced Ukrainians, including legal counselling, language courses, housing support, and employment assistance. While both roles are crucial, this dual identity can create tensions. For instance, CSOs in Sweden and Finland reported that resources devoted to advocacy sometimes limited their ability to address integration needs, while groups in Estonia and Latvia noted that local integration demands risk overshadowing their transnational advocacy. Without clearer strategies or additional resources, CSOs may struggle to balance these functions effectively.

Conclusion

The survey of Ukrainian CSOs in the Nordic-Baltic region, combined with insights from NUAS 2025, highlights both their urgent needs and strategic opportunities.

For CSOs, strengthening coordination mechanisms is critical to reduce duplication and amplify their collective influence. Creating cross-border advocacy platforms and thematic working groups would help CSOs to better coordinate their activities, learn from others’ experience, and articulate common priorities. In particular, smaller CSOs would benefit from learning how to adopt effective communication strategies, diversify outreach through multiple platforms, and enhance engagement with local communities and institutional stakeholders.

At the same time, CSOs should invest in internal capacity: skills training in project management, advocacy, and digital communication can improve efficiency and increase funding opportunities. Finally, CSOs should balance their dual roles, such as supporting displaced Ukrainians locally while advocating for Ukraine internationally, by dividing responsibilities and tailoring strategies to avoid role conflict.

In turn, policymakers and donors may benefit from closer cooperation with Ukrainian CSOs. As documented by Anisimova et al.  (2025), Ukrainian CSOs and civil society actors have already stepped in to fill gaps left by the public sector in the Nordic-Baltic countries. They have been facilitating labor market integration by offering mentorship, language support, and professional networks; improving access to information and bridging communication barriers between displaced people, employers, and municipalities. By recognizing and making use of Ukrainian CSOs’ experience, NB8 governments can develop more efficient mechanisms for integrating displaced populations. Furthermore, wider interaction with CSOs – including small local ones, currently underrepresented in the policy dialogue – may help coordinate with local communities and ensure inclusive policy-making processes.

Ultimately, it is important to recognize the role of Ukrainian civil society not only as a facilitator in the immediate support efforts but also as a strategic partner in shaping Europe’s long-term peace architecture.

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Liberal Values in Ukraine Days Before the 2022 Invasion

Posted on September 22, 2025 | Policy Brief

Monument in Kyiv at sunrise symbolizing Ukraine liberal values of freedom, democracy, and resilience.

Just weeks before Russia’s full-scale invasion in 2022, the European Social Survey completed the 10th round of data collection on public attitudes and beliefs in Ukraine. This policy brief examines regional variation in liberal values such as attitudes toward democracy and the EU, based on that data. While respondents in Eastern Ukraine were more skeptical of democracy and EU integration, they did not consistently reject liberal social values to a greater extent than respondents in other parts of the country. The most striking divide however, lies in institutional trust, which was significantly lower in Eastern Ukraine. This suggests that trust in institutions, which may have been further negatively impacted by prolonged exposure to violence since 2014, underlie the observed regional differences in attitudes towards democracy and the EU. Understanding these differences is vital for policymakers navigating Ukraine’s reform and EU accession process.

Introduction

It has been well documented that values in post-communist countries in Eastern Europe on average, tend to be more authoritarian, more nationalistic, more in favor of state intervention in the economy, and more skeptical towards sexual and ethnic minorities and foreigners than in Western Europe (e.g., Roland 2012). Behind the averages, however, there is substantial variation in values across subgroups of populations. Even before the onset of the full-scale Russian invasion, a discussion on regional Ukrainian differences in relation to democratic values, the wish for EU integration, and similar liberal attitudes existed, both in and outside of the country.

The path towards a closer relationship with Europe and the EU started already in 2014, but since February 2022, Ukraine has politically positioned itself even closer to the EU, and an EU accession process is now underway. However, for a successful reform process in Ukraine, how public opinion is shaped and whether attitudes and values converge towards those of the EU will be important (Olofsgård et al. 2024).

With this in mind, this policy brief provides a descriptive account of public liberal values in Ukraine by analyzing data from the 10th round of the European Social Survey (ESS) conducted just weeks before the full-scale invasion on the 22nd of February 2022. Some of the differences we observe are likely long-standing and related to differences in language preferences and cultural and informational exposure from Russia and the EU, respectively. Yet, given the exposure to instability and conflict in the eastern part of Ukraine since 2014, we also discuss the role that exposure to conflict may have played in explaining several attitudinal dimensions, including satisfaction with democracy, support for liberal social values, attitudes toward Europe and EU integration, as well as levels of trust.

Data

The ESS round 10 data was collected through face-to-face interviews in Ukraine between January 18th, 2022, and February 8th, 2022. The nationally representative survey focuses on public attitudes, beliefs, and behaviors and includes questions on opinions on democracy, the EU, and similar topics commonly considered to capture liberal views.

ESS Sample Characteristics

The sample consisted of more women than men (about 59 percent and 41 percent, respectively). While the Ukrainian population is well-educated, most still find it difficult (41 percent) or very difficult (32 percent) to live comfortably on their income. 11.5 percent of the sample was unemployed, while 31 percent were retired. Broken down by location, most average outcomes are similar, albeit with the East displaying somewhat lower levels of education and greater income difficulties (see Figure 1 for an illustration of what oblasts (regions) are included in each geographical unit). Unemployment was, however, substantially higher in the West (about 15 percent), while the share of retirees was lower (26 percent).

Some heterogeneity exists when it comes to belonging to a religious denomination. In the Central and South, around 63 percent state they belong to a church/mosque/synagogue, etc. The East is roughly at par with the national average (70 and 69.5 percent, respectively), while this figure is 82 percent in the Western part of the country. Similarly, there are major differences in the language one most often speaks at home. In the country as a whole, 13.4 percent stated they speak both Ukrainian and Russian at home. In the East, this figure was as high as 27.1 percent, displaying the duality in mother tongue in this part of Ukraine. The corresponding figure for the West was 3.3 percent. On the contrary, 92.4 percent marked that they most often speak only Ukrainian at home in the West, whereas this figure was only 5.2 percent in the East.

Figure 1. Geographical Classification of Ukraine’s Oblasts

Note: The map depicts the ESS coverage at the time of data collection, excluding Crimea and Sevastopol – illegally annexed by Russia since 2014.

Key Variables of Interest

To understand the views on liberal values, ESS responses to questions in the following areas have been considered:

  • I. Merits of democracy: satisfaction with the way democracy works; importance of living in a democratic country.
  • II. Liberal democratic values: agreement with statements such as “gay men and lesbians should be free to live their own lives as they wish”; attitudes towards the merits of obedience, respect for authority, and loyalty towards leaders; attitudes towards immigrants.
  • III. Opinions about Europe and the EU: support for further EU integration; emotional attachment to Europe; vote intention in a hypothetical EU referendum.

Regional Differences

There are some clear regional divides in attitudes toward democracy, liberal values, and EU integration across Ukraine in the weeks leading up to the full-scale Russian invasion. These differences are particularly pronounced between Eastern Ukraine and the Center, South, and West – though not uniformly in the same direction.

Figure 2. Attitudes toward democracy, liberal values, and EU integration across Ukraine

Source: Authors’ creation from ESS.

On democratic commitment, only 37 percent of respondents in the East considered it “extremely important” to live in a democratically governed country. This was about 16 percentage points lower than the national average. When categories were grouped into low, medium, and high importance, the East still trailed the national average by about 10 percentage points (about 67.5 and 75 percent, respectively). Similarly, satisfaction with democracy is the lowest among respondents from the East (about 6 percent compared to a national average, including the East, of 11 percent). Geographical differences are also evident in the responses to the question on whether it is acceptable for a country to have a strong leader above the law. A smaller share rejected this in the East (about 30 percent compared to the national average of 37 percent).

However, the East stood out in the other direction on some core liberal values, as depicted in Figure 2. It had the lowest share disagreeing with LGBT rights (31 percent vs. 40 percent nationally), the weakest support for teaching children obedience (17 percent), and the highest rejection of it (41 percent). Further, only 12 percent in the East agreed that “the country needs most loyalty towards its leaders,” compared to 26 percent nationally. This question could reflect one’s view on the current leadership, warranting some caution in the interpretation. On immigration, however, the East was less liberal: only 19 percent saw immigrants as having a positive impact, versus about 30 percent nationally.

The sharpest regional divide between the East and other regions concerns attitudes toward Europe and EU membership. In a hypothetical referendum, 73 percent of respondents in the East said they would vote to remain outside of the EU, compared to 47 percent in the South, 23 percent in the Central, and just 11 percent in the West. Support for further European unification was also substantially lower in the East, with only about 17 percent in favor of further unification, as compared to the almost 50 percent national average. Similarly, emotional attachment to Europe is substantially lower among respondents from the East, with nearly all respondents stating low or medium attachment only – figures that nearly invert those of respondents from the West of Ukraine.

The Role of Trust

Turning to the measures of trust, the East clearly stands out. Trust in the parliament, the police, political parties, politicians, and the legal system was substantially lower among respondents from the East (in the ranges of 5 to 15 percentage points more respondents answered they had a low level of trust in said institutions than the national average). When asked about trust in the United Nations, the East also stood out with more than 50 percent stating low trust compared to the national average of about 37. The same pattern holds also when asked about the European Parliament – 73 percent compared to the national average of about 44 percent – stated low trust. Respondents from the South also displayed lower levels of trust across all measures, but the deviations from the average are about half as big as the East.

When asked whether people can generally be trusted, or one can’t be too careful, the East did not stand out in this way, underpinning how distrust is strongly directed toward institutions, both national and international.

Conflict Exposure

Figure 3 details the conflict intensity in the last two years leading up to Russia’s full-scale invasion of Ukraine. As can be seen, incidents of violence are concentrated in the Donbass area, including the Donetsk and Luhansk regions. While not marked by similar levels of active conflict, Kharkiv oblast – also part of the East classification – borders areas with high levels of conflict intensity in the Donbass, as well as Russia in the east.

Figure 3. Conflict intensity in Ukraine, by raion

2020

 

2021

Source: Authors’ creation from Armed Conflict and Location Data.

It should be noted that the map also depicts strategic deployments and political unrest, such as demonstrations, explaining the prevalence of “conflict” also in a few other places in Ukraine prior to February 2022. The occurrences of such incidents are, however, far less than those in Luhansk oblast and Donetsk oblast at the time. An important piece of information is that the intensity pattern holds for the time Armed Conflict and Location Data for Ukraine has been available (2018), i.e. individuals situated in the East have been exposed to incidences of violence over a prolonged period of time.

This raises the question whether this exposure to violence may have contributed to increased differences in trust in institutions and support for democracy and the EU beyond what was already there before 2014. The most immediate effect probably comes from selective migration, i.e., that individuals who remain in the eastern regions in early 2022 despite the violence since 2014 may be those who, on average, are more skeptical of the Ukrainian government and its tilt away from the authoritarian Russia and towards the EU. But previous literature and recent studies on Ukraine suggest that there may also be a direct effect coming from exposure to violence on an individual’s attitudes. This relationship has recently been mapped by Obrizan (2025). A key finding is that military solutions are preferred in the segment of the population that has experienced hardship and personal losses since the full-scale invasion in 2022.

More generally, any kind of trust – including the interpersonal one – can be affected by exposure to conflict. The relationship is complicated, and in some instances, violence can cause more pro-social attitudes and behavior. An important distinction, however, is that exposure to violence amplifies the distinctions in attitudes and behavior towards members of in- and out-groups (Olofsgård, 2025). This suggests that conflict may have further increased the differences between the East of Ukraine and the rest of the country, if many residents in the former perceive national and western institutions as being dominated by groups they do not feel strong attachments to.

Further, terror management theory (e.g., Landau et al. 2004) suggests that fear induces support for charismatic and strong leadership. In a context where liberal democracy is not everywhere well enough entrenched, this may tilt over into support for more authoritarian leadership in response to attacks triggering stronger emotions of fear. Furthermore, work by Feldman and Stenner (1997) shows that the impact of perceived societal threat on triggering stronger authoritarian preferences can depend on authoritarian predispositions. The latter is measured by, e.g., looking at attitudes towards child rearing and emphasis on obedience. In the context of the finding above, this would imply that the impact of violence on authoritarian preferences would be weaker in the eastern parts of Ukraine, compared to the rest of the country, a potentially interesting avenue for future research.

Conclusions

The findings in this policy brief nuance simple narratives about regional divides in Ukraine. While dissatisfaction with democracy and skepticism toward the EU are more common in the East, this does not necessarily correspond to a general rejection of liberal social values. In some cases — such as attitudes toward child-rearing, authority, and LGBT rights — respondents from the East even express more liberal views than elsewhere.

Not explicitly discussed in the brief is the topic of mother tongue. The data shows that Russian speakers are less emotionally attached to Europe and less supportive of EU integration. Yet, there is no consistent evidence that Russian speakers are less committed to liberal democratic values overall. The effect of language is difficult to disentangle from geography, particularly given the concentration of Russian speakers in Eastern Ukraine.

What does stand out more clearly is that trust and the general view on institutions are substantially lower and more negative in the East. Respondents from the East consistently report lower trust in national and international political institutions. Interestingly, this pattern does not extend to generalized social trust — the East does not differ markedly from the rest of the country. This contrast suggests a more focused skepticism directed at formal institutions, rather than widespread social distrust. One possible explanation, as discussed in Olofsgård (2025), is that when exposed to conflict and violence, interpersonal trust may reflect confidence in one’s in-group, while institutional trust hinges on feeling represented within the broader political system. If respondents from the East perceive themselves as excluded from the national or European in-group, this could explain their lower levels of trust in both domestic and international institutions, and exposure to violence may have further amplified this. While signs of such alienation appear in the data, one should refrain from drawing too strong conclusions from this alone. Another possible explanation is that prolonged exposure to violence has eroded confidence in the government’s ability to protect citizens, and in the effectiveness of EU support, which would turn support away from the EU option preferred by the current government.  Future research on the effects of war exposure should more carefully disentangle the various aspects and forms of trust and how they relate to liberal values in Ukraine. Rebuilding institutional trust remains a key challenge. In this context, instilling peace and decentralizing political power may be essential for increasing trust in the Eastern part of the country, if that helps residents in the East to identify with public institutions. As Ukraine advances on its path toward EU membership, fostering a shared sense of national belonging will be critical in overcoming the narrative of an East–West divide when rebuilding the country.

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

The Case for Seizing Russian State Assets

Posted on June 18, 2025 | Policy Brief

Facade of the Central Bank of Russia with Russian flag, symbolizing the debate around seizing Russian state assets to support Ukraine.

This brief examines the legal and economic arguments in the ongoing debate over whether to confiscate Russian state assets frozen in Western democracies and redirect them toward supporting Ukraine’s resilience and reconstruction. It also outlines concrete proposals for how such a measure could be undertaken in compliance with international law and with manageable economic consequences.

At the outset of Russia’s full-scale invasion of Ukraine, substantial Russian state assets held in Western countries were frozen. While not all countries have disclosed precise figures, estimates place the total between $290–330 billion, most of it held within European jurisdictions. These numbers can be put in perspective to the total global support to Ukraine so far, €267 billion according to the Kiel Institute’s Ukraine Support Tracker. A lively discussion has emerged around the legal, economic, and political feasibility of seizing these assets to support Ukraine. As evident, this would constitute a very substantial addition to the support for the country. Thus far, agreement has only been reached on utilizing the returns on the assets to service a $50 billion loan to Ukraine under the Extraordinary Revenue Acceleration (ERA) mechanism. It has been argued that $50 billion should be enough, but Western contributions to the defence of Ukraine have been around €80 billion per year. The ERA is thus only a partial and very short-term financial solution for Ukraine, while a €300 billion fund based on the seizure of the assets would last perhaps 3-5 years. In short, the size of the fund matter and the principal amount is significantly larger than the fund that has been set up based solely on taxing the returns of the frozen assets.

This brief survey’s the main areas of contention and proposes viable pathways forward. It focuses on the legal and economic dimensions, setting aside moral arguments—which are broadly accepted given Russia’s unprovoked aggression and the destruction it has caused. Ultimately, the question is a political one: whether the legal justification and economic trade-offs favour asset seizure over other financing methods.

The Legal Arguments

Opposition to seizure often cites the principle of sovereign immunity. Yet, international law permits exceptions through countermeasures—acts that would otherwise be unlawful but are allowed in response to grave violations by another state. Additionally, asset confiscation may be lawful when enforcing international judgments (other possible legal avenues are for instance explored in Webb (2024), though in the end deemed as less likely to gain traction and legal approval). In both cases, the goal is to induce compliance with international obligations and secure reparations. A further legal basis lies in the doctrine of collective self-defense, which permits states not directly attacked to aid those that are, in response to unlawful aggression (Vlasyuk, 2024).

Critics often note that countermeasures should be temporary and reversible. However, as Vlasyuk (2024) points out, international law qualifies reversibility as being required only “as far as possible.” This implies that in cases of severe violations—where reversible countermeasures have failed—non-reversible actions may be justified. One proposed mechanism ties the frozen assets to future war reparations, allowing permanent transfers only if Russia refuses to comply with a future reparations ruling. Since reparation should go to the victim of Russia’s aggression, it also means that it is Ukraine that has the ultimate claim on the frozen Russian assets. This implies that any decision of confiscation and governance structure for transferring funds to Ukraine should be made with the consent of Ukraine. Put differently; even if the money is in Western financial institutions, there are good reasons to make sure the resources are used according to Ukrainian preferences.

The Economic Arguments

The principal economic concerns surrounding asset seizure are its potential impact on confidence in European capital markets, including risks of capital flight, increased interest rates, and diminished credibility of the euro. There are also fears of reciprocal actions by Russia against remaining Western investments.

These concerns, however, are increasingly overstated. The major shock to financial markets occurred when the assets were first frozen; any anticipated impact should now be fully priced in. Moreover, a viable reserve currency must be supported by convertibility, sound economic governance, and rule of law—features absent in countries like China, Gulf states, or most other emerging economies. The yen and Swiss franc lack either scale or stability. Despite previous sanctions and the 2022 asset freeze, the dollar and euro still account for around 80 percent of global foreign exchange reserves (The International Working Group on Russian Sanctions, 2023). Given the current crisis of confidence in U.S. fiscal governance, the euro remains especially robust.

The extraordinary nature of the situation also diminishes fears of setting a destabilizing precedent. Investors alarmed by this measure may not be long-term assets to Western markets but rather criminal states or individuals that should not be protected by the West’s financial and legal systems. More broadly, it signals to authoritarian regimes that aggressive actions will carry financial consequences. Western firms still operating in Russia have had ample time to disinvest, and those that remain should not constrain public policy.

Importantly, the costs of inaction must be considered. Financing Ukraine through increased public borrowing could raise interest rates across the eurozone and widen yield spreads between fiscally stronger and weaker member states. Seizing Russian assets, by contrast, may be economically safer, more equitable, and legally sound (International Working Group on Russian Sanctions, 2023).

Suggested Approaches

Several proposals aim to facilitate asset transfer in ways consistent with international law and economic stability.

Zelikow (2025) proposes the establishment of a trust fund to lawfully assume custody of frozen assets. This fund—grounded in the legal doctrine of countermeasures—would not represent outright confiscation but a conditional hold. Assets would remain Russia’s property until disbursed to victims of its aggression. A board of trustees would oversee disbursements—for example, servicing ERA loans or financing reconstruction. In this proposal, the fund would broadly define “victims” to include Ukraine and neighbouring states that have borne costs, such as accommodating refugees. This can perhaps help build political support among Western countries for the trust fund, but it has the obvious drawback that it may imply less support to Ukraine. Zelikow (2025) argues that institutions like the Bank of England or World Bank could manage the fund, given past experience with similar arrangements, potentially issuing bonds backed by the assets to accelerate support.

Vlasyuk (2024) proposes a multilateral treaty among coalition states recognizing Russia’s grave breaches of international law. This would provide a unified legal basis for transferring central bank assets to Ukraine via a compensation fund. National legislation would follow—similar to the U.S. REPO Act—tailored narrowly to address such violations. These laws should include safeguards, such as provisions to suspend asset seizure if hostilities end and reparations are paid.

Dixon et al. (2024) propose a “reparation loan” backed by Ukraine’s reparations claims. The EU or G7 would lend to Ukraine, using these claims as collateral. If Russia fails to pay after a ruling by a UN-backed claims commission, the frozen assets could be seized. This approach aligns well with the requirement for reversibility in countermeasures and may also reassure financial markets.

Conclusions

In summary, compelling legal arguments support the transfer or confiscation of Russian state assets under international law. Meanwhile, fears of damaging economic consequences appear increasingly unfounded. Any meaningful support for Ukraine—whether through asset seizure or public borrowing—will carry financial implications. However, using Russian rather than Western taxpayer resources is both morally and politically compelling.

What is now needed is coordinated political will and a practical, legally sound mechanism to operationalize asset transfers. With sound governance, such a step would not only finance Ukraine’s recovery but reinforce the international legal order and deter future aggression. An arrangement that makes sure all resources go to Ukraine—and not toward covering losses incurred by supporting Western countries—should be prioritized.

References

  • Dixon, H., Buchheit, L. C., & Singh, D. (2024). Ukrainian reparation loan: How it would work. The International Working Group on Russian Sanctions.
  • The International Working Group on Russian Sanctions. (2023). Working Group paper #15. Stanford University.
  • Vlasyuk, A. (2024). Legal report on confiscation of Russian state assets for the reconstruction of Ukraine. KSE Institute.
  • Webb, P. (2024). Legal options for confiscation of Russian state assets to support the reconstruction of Ukraine. European Parliament.
  • Zelikow, P. (2025). A fresh look at the Russian assets: A proposal for international resolution of sanctioned accounts (Hoover Institution Essay). Hoover Institution Press.

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Private and Public Sectors in the Belarusian Economy: Where Has the Pendulum Swung After 2019?

Posted on June 16, 2025 | Policy Brief

Symbolic view of a Ferris wheel representing the cycles and challenges of the Belarusian Private Sector in the nation’s evolving economy.

The Belarusian Private Sector experienced dynamic growth in the 2010s and, by the start of the current decade, matched the public sector in its contribution to GDP. However, since 2020, the institutional environment for entrepreneurship has significantly deteriorated. Combined with a reduction in the volume of publicly available official statistics, this has raised concerns about a significant decline in the private sector’s contribution to the Belarusian economy. This policy brief aims to systematize and analyze the dynamics of key development indicators of the private and public sectors in Belarus after 2019. It shows that private businesses have continued to play a crucial role in the Belarusian economy, generating about half of the gross value added in 2021–2024. However, the trend of increasing the share of private businesses in the economy, observed prior to 2020, came to a halt in 2021–2024. The share of state-owned enterprises also remained excessively high, despite being less efficient than private firms. If the status quo persists, sustainable long-term economic growth in Belarus is unlikely.

The Belarusian Private Sector and Public Sector Before 2020

After a period of high growth in the 2000s, the Belarusian economy entered a prolonged stagnation period. The annual GDP growth slowed from 7.1 percent in 2000–2011 to 0.7 percent in 2012–2021 and 1.1 percent in 2022–2024. The oversized state-owned enterprise (SOE) sector, extensively supported by the state via credit and other measures until 2015, is responsible for both the rapid growth in the 2000s and the subsequent stagnation (Hartwell et al., 2022).

The low efficiency of the public sector in the 2010s was partially offset by the expansion of more productive private firms. While this was not sufficient for Belarus to achieve high economic growth or close the wealth gap with Central and Eastern European countries, it did help maintain an upper-middle income per capita status – according to the World Bank classification, which Belarus has had since the mid-2000s.

The private sector developed dynamically in the 2010s, largely due to liberalized business conditions (Mironchik & Shcherba, 2022; BEROC, 2023). Labor resources flowed from SOEs to private firms (Chubrik, 2021).

By 2020, the Belarusian Private Sector’s contribution to GDP approached 50 percent (Mironchik & Shcherba, 2022) and, according to some estimates, even exceeded that level — rising by more than 10 percentage points since 2012 (Daneyko et al., 2022).

In 2020, the Belarusian economy, however, entered a period of turbulence. The Covid-19 pandemic, socio-political tensions and the government’s reactionary policies, a significant increase in sanctions pressure, and the forced restructuring of production chains significantly altered the business environment (Marozau, 2023). Support for SOEs from the government increased once again (Kalechits, 2024), while the regulatory environment deteriorated.

These changes, combined with a reduction in the volume of available statistics, have raised concerns about a decline in the private sector’s contribution to the economy after 2019. There are no known studies that have examined economic indicators of the public and private sectors since 2020. This policy brief aims to close this gap.

Economic Indicators of the Belarusian Private and Public Sectors in 2020–2024

Employment. The trend of gradual worker loss in SOEs persisted after 2019, while employment in the private sector expanded, even amidst an overall decline in the workforce.

The number of people employed declined by nearly 5 percent between 2020 and 2024 due to unfavorable demographic trends and intensified emigration. Employment dynamics varied significantly depending on the form of company ownership. The number of workers in SOEs and firms with state participation continued to decrease, whereas in the private sector, employment grew by just over 1 percent (see Figure 1).

Figure 1. Dynamics of employment in Belarus

Line graph showing employment trends in Belarus from 2019 to 2024 across public, private, and mixed ownership sectors, illustrating shifts in the Pendulum Belarusian economy.

Source: Author’s calculations based on Belstat data.

The share of the private sector in total employment increased from 42.9 percent in 2019 to 45.7 percent in 2024, while the share of the public sector declined from 57.1 percent to 54.3 percent (see Figure 2).

Industrial output and exports. The role of the private sector in manufacturing and exports of goods has remained nearly unchanged since 2019. However, the pre-2019 trend of its increasing role in the economy has stalled.

In 2024, private commercial organizations accounted for 30.5 percent of industrial production, an increase by 3.8 percentage points since 2019 (see Figure 2). Assessing the impact of individual industries on these changes is challenging, as Belarus Statistical Agency Belstat stopped publishing data on production in industrial sectors in 2022. The decline in the share of SOEs in production is, at least in part, linked to oil refining, whose output has not returned to 2019 levels due to the impact of sanctions.

Figure 2. Private Sector Share in Selected Economic Indicators of Belarus

Bar chart showing changes from 2019 to 2024 in private sector shares of employment, industrial output, investments, retail trade, and catering in Belarus, reflecting trends in the Pendulum Belarusian economy.

Source: Author’s calculations based on Belstat data.
Note: Hereafter, mixed ownership enterprises (with any share of state participation) are considered part of state-owned enterprises (or the public sector).

The Belarusian industry is export-oriented, with around 70 percent of manufactured goods supplied to foreign markets. Detailed foreign trade data has also been restricted since 2022, but the volume of oil products and potash fertilizer exports can be estimated using mirror statistics, media leaks, and statements from Belarusian officials. According to this, the volume of export of oil products and potash fertilizers has significantly declined since 2019, and their share in total goods exports has decreased from 26 percent in 2019 to 15–20 percent in 2022–2024 (see Figure 3).

Other exports from SOEs have grown significantly since 2019, increasing their share of total goods exports by nearly 9 percentage points (see Figure 3). This has been driven by enhanced industrial cooperation between Belarus and Russia following the tightened sanctions in early 2022. It led to increased shipments of machinery and equipment to Russia, with the defense sector likely accounting for a significant portion.

Private firms also took advantage of vacant niches in the Russian market, increasing their exports after 2019. However, private sector exports grew at a slower pace than SOEs. With the decline in oil products and potash exports, the share of the private sector in total exports remained close to the 2019 level in 2022–2024 (see Figure 3).

Figure 3. Structure of goods exports

Stacked bar chart showing the structure of Belarusian goods exports by sector from 2019 to 2024, highlighting shifts between private firms, state-owned enterprises, and key commodities within the Pendulum Belarusian economy.

Source: Author’s calculations based on data from Belstat, National Bank of Belarus, World Bank, UN Comtrade and various news outlets.

Imports. The private sector has played a crucial role in rebuilding Belarus’s goods supply chains after sanctions were tightened in early 2022.

According to statistics from Belstat, the share of SOEs in goods imports decreased by 9.8 percentage points – from 28.2 percent in 2019 to 18.4 percent in 2024. However, it is reasonable to isolate the imports of oil and petroleum and gas products as the way Belstat classifies ownership may bias these figures. For example, natural gas from Russia is imported by Gazprom Transgaz Belarus – a 100 percent subsidiary of Russian state-owned Gazprom – yet classified in the data as private sector imports.

Adjusting for this, the private sector’s share of non-energy goods imports rose by almost 13 percentage points since 2019, reaching 73 percent in 2024 (see Figure 4). This signifies the private sector’s ability to adapt to the new economic reality, not only recovering but even growing its imports against the backdrop of the supply chain and financial disruptions of 2022–24.

Without the high adaptability of private businesses under drastically changing conditions, the economic downturn in Belarus in 2022 would have been much deeper, and the recovery in 2023 and growth in 2024 significantly slower.

Figure 4. Structure of goods imports

Source: Author’s calculations based on data from Belstat, National Bank of Belarus, World Bank, UN Comtrade, and various news outlets.

Investment and trade. The importance of state-owned enterprises in investments has increased slightly since 2019 but declined in sectors related to meeting consumer demand.

In 2019, 61.4 percent of all investments were generated by SOEs. During 2022–2024, this share fluctuated between 63.6–65.5 percent, while the private sector accounted for nearly 34.5–35.8 percent (see Figure 2). The slight increase in the role of SOEs in investment is linked to government efforts to intensify investment activity. This includes directives and recommendations for enterprises to initiate a new investment cycle.

In retail trade and catering, the private sector strengthened its position after 2019. Its share increased by 3 and 11.4 percentage points, respectively, reaching 86.8 percent and 78.9 percent in 2024 (see Figure 2).

Assessing the Contribution of the Belarusian Private Sector and Public Sector to Gross Value Added. There is no available data on the contribution of the public and private sectors to the gross value added (GVA) or GDP in Belarus. To estimate this contribution, an approach proposed by Daneyko et al. (2022) has been applied. This method assumes that labor productivity in the public and private sectors corresponds to overall productivity in the same proportion as wages in these sectors relate to the average wages in the economy.

According to these estimates, the private sector accounted for nearly 50 percent of Belarus’s GVA in 2019, while the public sector contributed slightly over 50 percent (see Figure 5). Between 2020 and 2024, the sectoral shares in GVA fluctuated around 50 percent.

Thus, despite the deterioration of the institutional environment for business after 2020, the significance of the private sector in Belarus’s economy has at least not declined. However, while the private sector’s importance in the economy increased before 2020, this trend did not continue between 2021 and 2024.

Figure 5. Contribution of the Belarusian private sector and public sector to Belarus’s gross value added.

Source: Author’s calculations based on Belstat data.

The public sector continued to generate less value added per employee than private businesses between 2020 and 2024. However, the gap narrowed from over 20 percent in 2019 to nearly 15 percent in 2024 (see Figure 6).

Figure 6. Efficiency of the public sector relative to the private sector

Source: Author’s calculations based on Belstat data.

Labor productivity growth in the public sector exceeded that of the private sector. However, given the influence of temporary production growth factors (vacated market niches in 2022–2023 and increased demand from Russia), this development is unlikely to be sustainable in the long term. Indirect evidence for this is the lack of a corresponding improvement in the relative efficiency of public sector investments. Between 2020 and 2024, each ruble invested by SOEs in fixed capital generated nearly 45 percent less value added than in the private sector — and this gap has widened since 2019.

Conclusion

The Belarusian private sector continued to generate around half of the country’s GVA after 2019 and remained the most productive part of the economy. Its significance did not diminish, even amid a deteriorating institutional environment and tightened sanctions against Belarus. Private businesses played a decisive role in restructuring supply chains during 2022–2024, following the disruptions in early 2022.

At the same time, the trend of increasing private sector participation in the economy, observed before 2020, has stalled, while the size of the public sector has remained substantial — particularly in industrial production. In turn, the efficiency of SOEs still lags significantly behind that of private firms, especially in terms of investment. If the current balance between the Belarusian private sector and public sectors persists, and the conditions that underpin it remain unchanged, Belarus’s long-term economic growth prospects will remain weak once the specific growth factors of 2023–2024 are exhausted.

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

Beyond North Africa: Ukraine’s Agricultural Engagements with Sub-Saharan Partners

Posted on June 12, 2025 | Policy Brief

Farmworkers harvesting leafy vegetables in a lush green field with mountains in the background, illustrating hands-on labor central to Ukraine's agricultural engagements.

In recent years, the global agricultural landscape has shifted dramatically, shaped by the intersecting crises of climate change, food insecurity, geopolitical tensions, and technological disruption. Against this backdrop, Ukraine and Sub-Saharan Africa have emerged as two regions uniquely positioned to build a complementary partnership in the agri-food sector – one that not only addresses immediate humanitarian and trade challenges but also lays the groundwork for long-term sustainable development. As Ukraine looks to diversify its agricultural partnerships beyond traditional European and Asian markets, Ukraine’s agricultural engagements with Africa offer both a growing consumer base and an investment frontier where Ukraine’s expertise and surplus production capacity can meet critical demand. This policy brief explores how Ukraine’s agricultural engagements with certain African countries can deepen cooperation across the agricultural value chain. Drawing on in-depth regional analyses conducted by the Kyiv School of Economics Agrocenter (Martyshev, Stolnikovych & Piddubnyi, 2024a–d), the discussion considers strategic sectors, regional particularities, and policy innovations essential for a robust and mutually beneficial partnership.

Ukraine Agricultural Engagements with Africa: Opportunities for Growth and Partnership

Ukraine is one of the world’s most productive agricultural exporters, supplying significant volumes of wheat, corn, sunflower oil, and other essential staples. Africa, by contrast, is grappling with an array of food production and security challenges. In many regions, agricultural productivity remains stubbornly low, constrained by underinvestment, poor infrastructure, limited irrigation, climate volatility, and outdated farming techniques. Yet, Africa’s demographic trends suggest a rapidly growing demand for food. Urbanization is accelerating, dietary preferences are shifting, and consumers are increasingly looking beyond subsistence crops toward diversified and processed foods. These dynamics set the stage for Ukraine to serve not just as a food exporter, but also as a strategic partner in Africa’s agricultural transformation.

In a series of recent regional reports by the Kyiv School of Economics Agrocenter, all titled Cooperation Between Ukraine and African Countries in Agriculture, (Martyshev, Stolnikovych & Piddubnyi, 2024a,b,c,d), the Kyiv School of Economics (KSE) explored the mutually beneficial opportunities for collaboration between Ukraine and Africa in the agricultural sector. The full reports covering Central, East, Southern, and West Africa are available at https://agrocenter.kse.ua. This brief summarizes the key findings and insights drawn from those reports.

Data and Methods

A standardized analytical framework across four African regions, Central, East, Southern, and West Africa, focusing on three major countries in each region, was applied. The objective was to, through data-drive insights, assess the potential for agricultural cooperation with Ukraine in food security, trade, production systems, and policy environments.

  • Food security analysis relies on indicators from FAOSTAT and the World Bank, including prevalence of undernourishment, dietary energy adequacy, and trends in malnutrition from 2000 to 2022.
  • Trade analysis uses data from UN Comtrade, ITC Trade Map, Ukrainian customs, and national sources to evaluate import-export flows, Ukraine’s market share, and commodity dependencies, particularly in cereals and vegetable oils.
  • Agricultural sector profiling includes employment, GDP contribution, key crop and livestock outputs, and irrigation coverage. Data are drawn from FAOSTAT, national agricultural statistics, and World Development Indicators.
  • Infrastructure and technology assessments are based on literature reviews and secondary sources evaluating the state of storage, logistics, irrigation, and mechanization. Attention is given to adoption of modern tools like drones and ICT platforms.
  • Policy and institutional reviews focus on national agricultural strategies, trade policies, food security programs, and land tenure systems, using official government documents and donor evaluations.
  • For East and West Africa, findings were also informed by stakeholder input from KSE Agrocenter webinars held in 2024, involving local policymakers, researchers, and trade representatives.

This mixed-methods approach enabled a comparative, region-specific understanding of agri-food challenges and opportunities relevant to Ukraine’s engagement in Africa.

Empirical Findings and Policy Recommendations

Trade: A Nascent but Promising Relationship

The trade relationship between Ukraine and Africa, while still developing, shows considerable potential. Based on empirical trade flow data, Ukraine’s primary exports to Africa include cereals like wheat and corn, along with vegetable oils. Imports from Africa, however, are minimal, revealing the one-sided nature of current trade. This asymmetry is due to limited diversification, logistical barriers, and underdeveloped bilateral trade frameworks. Trade activity is concentrated in North and West Africa, while countries in Central, Eastern and Southern Africa receive fewer Ukrainian goods. Engagement with regional trade blocs such as the Economic Community of West African States (ECOWAS) and the East African Community (EAC) presents both regulatory hurdles and strategic entry points.

Based on observed trade gaps, the policy recommendation is to expand Ukraine’s access to African markets by negotiating preferential trade agreements and eliminating non-tariff barriers. Appointing agrarian attachés in African capitals can facilitate market entry, monitor regional regulations, and promote Ukrainian products in regional fairs and business forums.

Joint Investment Opportunities

Based on field-level evidence and investment data, agriculture in Central and East Africa is constrained by severe infrastructure deficits. Post-harvest losses, driven by the absence of proper storage, cold chains, and road networks, are estimated to cost billions in lost output annually. The strategic proposal is for Ukraine to co-invest in building post-harvest systems, leveraging its expertise in grain storage and export logistics. Ukrainian firms could collaborate with African partners on silos, warehouses, and cold storage tailored to tropical climates.

Food processing also represents a high-potential area. Many East African countries impose protective tariffs on processed food imports to stimulate local industry. Based on these findings, the policy recommendation is for Ukraine to establish agro-processing joint ventures that align with local industrial policies. These ventures would stimulate employment, reduce food imports, and strengthen Ukraine’s position in value-added agriculture abroad.

Technology Transfer Potential

Empirical assessments reveal that low mechanization, climate volatility, and limited access to agri-tech remain persistent barriers to productivity in much of sub-Saharan Africa. Ukraine, with its advanced capabilities in precision agriculture, can provide high-impact technologies such as satellite-based soil monitoring, drones for crop surveillance, and automated irrigation systems. For example, in parts of Southern Africa like Zambia and Namibia, where rainfall is unpredictable, these technologies can help stabilize crop yields and reduce risk for smallholder farmers.

The strategic proposal is for Ukrainian firms to develop demonstration farms and pilot projects that showcase these innovations. Based on successful models from Eastern Europe, these pilots could serve as training grounds for local agronomists and as proof-of-concept for scalable investment.

Regional Variability and Context-Specific Cooperation

Central Africa (e.g., the Democratic Republic of the Congo (DRC), Angola, Cameroon)

Based on food security metrics, Central Africa faces some of the highest levels of undernourishment on the continent. In DRC for example, more than one-third of the population is chronically underfed. Political instability and unclear land rights further hinder agricultural investment.

The strategic recommendation is to continue and scale humanitarian programs like “Grain from Ukraine,” while also offering technical support in veterinary services for cattle and poultry sectors, particularly in Angola and Cameroon. Ukrainian expertise in land reform and extension services could also help unlock investment in rural farming.

East Africa (e.g., Ethiopia, Kenya, Tanzania)

Agricultural productivity is improving in East Africa, but gaps remain. Based on infrastructure and yield data, the region struggles with limited access to farm machinery, irrigation systems, and post-harvest technology. The policy recommendation is to focus on joint research, agricultural education, and training programs that address these specific bottlenecks. Ukrainian institutions could work with African universities to design curricula on crop science, data-driven farming, and agri-business entrepreneurship. Mobile extension services and remote learning platforms could further boost rural outreach.

Southern Africa (e.g., South Africa, Botswana, Namibia)

This region has a more developed agricultural sector with export orientation and mechanization. However, environmental and political factors, such as energy shortages and water scarcity, threaten sustainability. Based on these empirical conditions, the strategic proposal is for Ukraine to engage through agri-consulting and technology partnerships. High-value inputs like hybrid seeds and automated irrigation systems can address local constraints, while cooperation on renewable energy solutions for farming could provide long-term stability.

West Africa (e.g., Nigeria, Ghana, Côte d’Ivoire)

According to population and consumption data, West Africa faces mounting pressure on food systems. Despite improving domestic output, infrastructure deficits and policy inconsistency limit food availability. Based on these findings, the strategic recommendation is to invest in logistics infrastructure, such as road and rail links to key ports and warehouses, as well as to diversify the region’s agricultural base. Ukrainian seed companies could introduce crops like barley and legumes, adapted to regional climates, to reduce dependence on cocoa and palm oil.

Conclusion

In conclusion, the partnership between Ukraine and Sub-Saharan Africa in the agricultural sector is not merely a matter of commerce; it is a strategic opportunity with tangible benefits for both sides. Ukraine, as a breadbasket with advanced agri-tech capabilities, can play a pivotal role in enhancing food systems in parts of Africa where food insecurity remains acute, particularly in regions such as the Horn of Africa (e.g., Somalia and Ethiopia), the Sahel (e.g., Niger and Mali) and Central Africa (e.g., the Democratic Republic of the Congo). At the same time, many African nations offer Ukraine access to growing consumer markets, underutilized arable land, and increasing geopolitical relevance in a rapidly evolving global landscape.

To realize this vision, both sides must commit to a comprehensive, long-term strategy built on trust, transparency, and mutual benefit. The road ahead is complex but filled with promise. With smart investments, targeted diplomacy, and collaborative innovation, Ukraine and Africa can co-author a new chapter in global agriculture, one defined not by scarcity and dependency, but by resilience, growth, and shared prosperity.

References

Central Africa

  • Martyshev, P., Stolnikovych, H., Piddubnyi, I. (2024a). Cooperation between Ukraine and African countries in agriculture: Central Africa. Center for Food and Land Use Research at Kyiv School of Economics.
  • Abia, W. A., Shum, C. E., Fomboh, R. N., Ntungwe, E., & Ageh, M. T. (2016). Agriculture in Cameroon: Proposed Strategies to Sustain Productivity. International Journal for Research in Agricultural Research, 2(2), 1–14.
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  • Binswanger-Mkhize, H. P. (2008). Empowering Rural People for Their Own Development. FAO.
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  • CAADP. (2013). Agriculture Investment Opportunities Brief: CAADP Investment Facilitation Programme – DRC.

East Africa

  • Martyshev, P., Stolnikovych, H., Piddubnyi, I. (2024b). Cooperation between Ukraine and African countries in agriculture: East Africa. Center for Food and Land Use Research at Kyiv School of Economics.
  • Achandi, E., Mujawamariya, G., Agboh-Noameshie, A., et al. (2018). Women’s access to agricultural technologies in rice production and processing hubs: A comparative analysis. Journal of Rural Studies, 60, 188–198.
  • African Development Bank. (2024). African Economic Outlook 2024.
  • Ayenew, M., & Arquitt, S. (2018). Kenya Agricultural Performance and Targets. CCGA Policy Brief No. 2.
  • Bekabil, U. T. (2014). Review of challenges in Ethiopia. Journal of Natural Sciences Research, 4(18), 70–77.
  • Casaburi, L., Kremer, M., & Mullainathan, S. (2016). Contract farming and agricultural productivity in Western Kenya. In S. Edwards et al. (Eds.), African Successes, Vol IV. University of Chicago Press.
  • Charles, G., Jeppesen, S., Kamau, P., & Kragelund, P. (2016). Food-processing sector study. Forum for Development Studies, 44(1), 109–131.
  • FAO. (2015–2016). AQUASTAT Country Profiles – Kenya, Ethiopia, Tanzania.
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  • Government of Tanzania. (2015). Agricultural Sector Development Strategy II (ASDS II).
  • Kashindi, G. (2020). Local agricultural production in Kenya. KAS African Law Study Library, 7.
  • Laichena, J., Kiptoo, E., et al. (2022). Kenya agricultural policy profile. IWMI/CGIAR.

Southern Africa

  • Martyshev, P., Stolnikovych, H., Piddubnyi, I. (2024c). Cooperation between Ukraine and African countries in agriculture: South Africa. Center for Food and Land Use Research at Kyiv School of Economics.
  • Acquah, B. K. (2004). In Shaping the Future of African Agriculture for Development. AAAE.
  • AgriSA. (2024). Key Issues for South African Agriculture.
  • Bank of Namibia. (2017). Feeding Namibia: Agricultural Productivity and Industrialisation.
  • Commission on Restitution of Land Rights. (2021). Strategic Plan 2021–2024.
  • Department of Agriculture, Land Reform and Rural Development. (2022, 2024). Agriculture and Agro-Processing Master Plan; State Land Lease and Disposal Policy.
  • Department of Rural Development and Land Reform. (2013). NARYSEC Booklet.
  • Financial and Fiscal Commission. (2021). Strategic Plan 2020–2025.
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Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.

A Potential Broadening of the Excise Tax on Food Products High in Sugar and Salt: The Case of Latvia

Posted on June 9, 2025 | Policy Brief

Woman holding a burger with fried chicken, donuts, and sugary foods – concept image for excise tax on sugar and salt.

Overweight and obesity are significant public health issues, contributing to various chronic diseases such as cardiovascular diseases, diabetes, and certain cancers. Latvia’s second-highest share of overweight adults in the EU is a compelling reason for public health measures. These should aim to discourage excessive consumption of high-calorie foods and beverages. Excise tax is one of the tools in a complex approach to encourage a balanced diet and promote positive health outcomes. Motivated by evidence from Hungary, currently the only country in Europe imposing a tax on pre-packaged food products high in sugar and salt, we simulate the short-term impact of the introduction of a differentiated broad-based tax on food products in Latvia. We conclude that to influence consumer behaviour, price increases should be at least 10 percent, which implies introducing tax rates that are at least 1.5 times higher than those in Hungary.

Extremely High Overweight and Obesity Rates in Latvia

Overweight and obesity are serious public health challenges across Europe. Together with an unbalanced diet and low physical activity they contribute to many non-communicable diseases (NCDs), including heart diseases, diabetes and certain cancers (WHO, 2022). For many individuals, being overweight is also linked to psychological problems.

Overweight and obesity rates are extremely high in all EU countries. In 2022, more than half of all adults in the EU (51.3 percent) were overweight (including pre-obese and obese). Latvia has the 2nd highest rate of overweight adults in the EU (60.4 percent). This puts significant pressure on Latvia’s health care system and social resources.

Recognizing that overweight and obesity has multifactorial causes, a comprehensive approach is required to effectively tackle this problem, involving experts from various fields and addressing the issue from multiple angles.

One potential tool in a complex approach is an excise tax on foods and drinks high in sugar and salt since excessive consumption of such foods and drinks represents a major risk factor for NCDs (WHO, 2015a). Such a tax could help to reduce excessive consumption, encourage healthier eating, and improve public health outcomes.

The Intake of Added Sugars

According to data from the EFSA Panel on Nutrition, Novel Foods and Food Alergens (EFSA, 2022), the main source of added sugar intake in almost all European countries is sugar and confectionery. The numbers for adults (18–64 years) range from 20 percent in Austria to 57 percent in Italy (48 percent in Latvia). For children aged 1–18 years, sugar and confectionary contribute to 36 – 44 percent of added sugar intake in Latvia.

In Latvia, other key sources of added sugar are fine bakery wares, processed fruits, and vegetables. The contribution of sweetened soft and fruit drinks to total added sugar intake is only 8 percent for adults (18–64 years) and 3–7 percent for children (1–18 years).

Excise Tax on Soft Drinks

As of 2024, 14 European countries have implemented taxes on sugar-sweetened soft drinks. In Latvia, the tax was introduced in 1999 and was mainly motivated by the financial needs of the state budget.

The evidence from international case studies (WHO, 2023) shows that taxes on sugar-sweetened soft drinks can be effective in reducing consumption in the short term, particularly when the tax leads to significant price increases that reduce affordability. However, the overall evidence on whether these taxes successfully reduce sugar intake is inconclusive. In a review by the New Zealand Institute of Economic Research (NZIER, 2017), the authors conclude that methodologically robust studies  show only small reductions in sugar intake, too small to produce significant health benefits, and easily offset if consumers switch to other high-calorie products. On the other hand, studies reporting a meaningful change in sugar intake often assume no compensatory substitution. At the same time, experience from Hungary suggests that a sugar tax imposed on a wide range of products is effective in reducing the overall consumption of products subject to the tax, and in encouraging healthier consumption habits. The impact assessment conducted 3 years after the introduction of the tax in Hungary showed that consumers of unhealthy food products responded to the tax by choosing a cheaper, often healthier product (7–16 percent of those surveyed), consuming less of the unhealthy product (5–16 percent), switching to another brand of the product (5–11 percent), or substituting it with another food item – often a healthier alternative (WHO, 2015b).

The Short-term Effect of a Broad-Based Excise Tax in Latvia

Approach

Motivated by the evidence from Hungary, we simulate the short-term impact of the introduction of a similar differentiated broad-based tax on food products high in sugar and salt using the approach applied in Pļuta et. al (2020). First, we use AC Nielsen monthly data from 2019 to 2023 on sales volume and prices of pre-packaged food products of selected categories in the modern trade retail market to estimate the price elasticity of demand for these products. The selected product categories included:

  • Pre-packaged sweetened products (e.g., breakfast cereals, cacao, chocolate bars, soft and hard candies, sweet biscuits, etc.)
  • Sweetened dairy products (e.g., ice cream, yoghurt, condensed milk, curd countlines, etc.)
  • Salted snacks (salted nuts, salted biscuits, etc.)
  • Ready-to-eat and instant foods (e.g., pizza cooled and frozen, frozen dumplings, vegetables and canned beans, etc.)
  • Condiments (e.g., dehydrated instant and cooking culinary, dehydrated sauces and seasonings, dressings, ketchup, mayonnaise, etc.)

Second, we simulate different scenarios to assess the increase in price, reduction in sales and budgetary effect using the estimated elasticities and assuming different degrees of tax pass-through rate to retail prices (100 and 50 percent, respectively). Our results represent a short-term or direct fiscal effect, meaning we do not account for any second-round effects that may arise due to changes in domestic production and employment, which could in turn generate additional tax revenues.

The Tax Object and Rates

In defining the scenarios to be considered when modelling the potential broadening of the tax base, we use the Hungarian Public Health Product Tax (PHPT) as a practice example. As a basis, we use the list of product categories under taxation by the PHPT, the two-tier tax system and the PHPT rates as of 2024. In addition, we are also looking at other product categories (such as sugar sweetened dairy products, sweetened cereals and vegetables and beans containered), expanding the tax base even more. In total, we simulated four scenarios for taxing the food products high in sugar and salt. The scenarios consider a two-tier tax system, meaning products with lower sugar or salt content are taxed at a lower rate, while those with higher content face a higher tax. For condiments, only a high rate is applied due to the, usually high, salt content. A differentiated tax rate is expected to stimulate the industry to drive down sugar and salt content in their products, i.e., offering sugar and salt-reduced options. The scenarios differ from each other in the applicable rates.

  • Scenario 1: Uses the same tax rates as Latvia’s excise tax on non-alcoholic beverages (as of March 2024) – EUR 7.40 per 100 kg (low rate) and EUR 17.50 per 100 kg (high rate).
  • Scenario 2: Uses Hungary’s PHPT rates – in the general case, the low rate is EUR 17 per 100 kg, and the high rate is EUR 54 per 100 kg.
  • Scenario 3: Sets rates 1.5 times higher than Hungary’s rates.
  • Scenario 4: Doubles Hungary’s rates.

Assumptions

Unfortunately, the retail price and sales time series used in the analysis are not disaggregated into groups according to the sugar and salt content in the product. As a result, we apply assumptions to estimate the potential range of tax impacts.

To calculate the lower bound of the expected impact, we assume that 100 percent of sales in each product category are subject to the new sugar and salt tax, but all products have low sugar and salt content and therefore qualify for the lower tax rate.

To calculate the upper bound, we assume that 25 percent of the sales volume is taxed at the lower rate (due to low sugar and salt content), while the remaining 75 percent of sales are taxed at the higher rate, reflecting higher sugar and salt levels in those products.

Results

According to our estimations, the application of an excise tax on food products high in sugar and salt could lead to a price increase and sales decrease of taxed food products. The magnitude would depend on the type of food product (i.e., average retail price in the country) and scenario assumed (i.e., tax rates). Within each single scenario, the largest impact is expected for condiments. This is because we simulate only the high tax rate applied to them (not a two-tier system), as is the case in Hungary. The tax makes up a larger share of their price, and due to high price sensitivity, the decrease in sales is also greater.

Based on previous research, we conclude that price increases need to reach at least 10 percent to meaningfully influence consumer behaviour. This level of change is achieved in Scenario 3, which assumes tax rates 1.5 times higher than those used in Hungary.

Below we present the obtained estimations under Scenario 3.  The estimates for Scenarios 1 and 2 are not included here because the price increase caused by the tax does not reach 10 percent for several product categories. Under Scenario 4 the price changes could exceed 10 percent but this scenario may also provide stronger incentives for manufacturers to reformulate their products (and in this case, the average price increase within a given product category will be lower). The results for Scenario 4 are available in a recent BICEPS report (Pļuta et al., 2024).

Under Scenario 3, with full tax pass-through (100 percent), the estimated reduction in sales volume is:

  • 3.0–8.1 percent for pre-packaged sweetened products;
  • 3.6–17.1 percent for sweetened dairy products;
  • 0.9–4.7 percent for salted snacks;
  • 10.4–54.1 percent for ready-to-eat and instant foods;
  • 11.0–11.8 percent for condiments.

If only 50 percent of the tax is passed through to retail prices, the sales reductions would be approximately half as big.

The estimated revenue from the excise tax in this scenario would range between EUR 15.0 million and EUR 54.9 million. The resulting change in VAT revenue would range from a loss of EUR 0.7 million to a gain of EUR 1.1 million.

Conclusion

Although overweight and obesity rates are extremely high in all EU countries, Latvia, in 2022, had the second highest rate in the EU. In this brief, we explore the use of the excise tax as one of the tools in a complex approach to discourage excessive consumption of foods and beverages high in sugar and salt and encourage a balanced diet and promote positive health outcomes. Based on findings from previous studies, a price increase of at least 10 percent is needed to influence consumer behaviour. In Latvia, this would require tax rates approximately 1.5 times higher than those applied in Hungary, i.e. in the general case equal to EUR 25.5 (low rate) and EUR 81 (high rate) per 100 kg of product. Under such a scenario, the estimated revenue from the tax could range from EUR 15.0 to 54.9 million. For comparison, in 2024, Latvia’s excise tax on soft drinks generated EUR 15.6 million. To remain effective, tax rates should be adjusted over time in line with growth in disposable income.

Acknowledgement

This brief is based on a study Taxation of the non-alcoholic beverages with excise tax in the Baltic countries. Potential broadening of the tax base to food products high in sugar and salt completed by BICEPS researchers in 2024 (Pļuta et al., 2024). The study was commissioned by VA Government. It was developed independently and reflects only the views of the authors.

References

Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.