Ukraine in the context of implementing the OECD recommendation on effective public investment across levels of government

Abstract

The article examines the implementation of the Organization for Economic Cooperation and Development (OECD) Recommendation on Effective Public Investment Across Levels of Government in Ukraine. The article covers the nature and peculiarities of the OECD Recommendation and analyzes the process of its implementation by Ukraine. The purpose of the Recommendation on Effective Public Investment Across Levels of Government is to help governments at all levels assess the strengths and weaknesses of their public investment capacity using a country-wide approach and identify priorities for improvement. Given the downward trend in public investment, especially in times of crisis, it is very important for governments at all levels to be efficient, i.e., to be able to deliver better results with less costs and to spend more wisely. The problem is much broader than just funding investment, as it concerns the most efficient use of investment funds, for which different levels of government may lack appropriate management tools even if investment funding is available. The scope of the Organization for Economic Cooperation and Development and the list of legal instruments it is developing are described. The article outlines three systematic challenges to multi-level public investment management that impede the achievement of the best outcomes: coordination challenges, capacity challenges, and framework challenges. It notes that to address these issues, the OECD has developed a Recommendation on Effective Public Investment Across Levels of Government, which takes into account the above challenges and is built on three key pillars: coordination of public investment at different levels of government and policy; strengthening public investment capacity and promoting policy learning at all levels of government; and ensuring an appropriate framework for public investment at all levels of government. The framework covers twelve principles, which in turn include specific steps for implementing the OECD Recommendation in practice. The principles set out in the Recommendation are applicable to national, regional, and local governments and address aspects that are relevant to other stakeholders in public investment. The implementation of the OECD Recommendation on Effective Public Investment Across Levels of Government will allow Ukraine to benefit from the experience of successful OECD countries in this area, and the increase in the efficiency of public investment will signal to foreign investors that investing in Ukraine is a viable option. The article also examines the steps taken by Ukraine on the way to establishing and strengthening cooperation with the Organization for Economic Cooperation and Development, in particular in terms of implementing the Recommendation, and outlines the main problematic issues on this path. Ukraine’s cooperation with the Organization for Economic Cooperation and Development is extremely important for ensuring its economic well-being, both at the national, regional, and local levels.