Building Ukraine’s recovery

Ukraine’s future depends on a just and sustainable peace, which requires timely military support and effective security guarantees. Efficient and fair reconstruction is also critical to ensure that the recovery needs are met, and to give the people of Ukraine a dignified life in the country they are fighting for.

Since the full-scale Russian invasion caused significant damage in the housing, energy and social sectors, most reconstruction efforts will occur in local communities (or hromadas). Therefore, Ukrainian and international stakeholders emphasise the central role of local self-government (LSG) authorities in Ukraine’s recovery.46e2f5bc94a3 LSGs have already contributed to ongoing reconstruction effortsa5030f824f34 and aided Ukraine’s wartime resilience with the continued delivery of local public services.127cec043999

Corruption can distort the quality and speed of local reconstruction, as indicated by several widely publicised cases of potential embezzlement in procurement contracts by Ukrainian local and subnational authorities.f6a98037728b As with all public authorities, local and subnational authorities are not immune to corruption. Decentralisation of authority can enable local embezzlement and capture of services by the political elite.455fcdfc1a78 However, some progress has been made, including significantly fewer residents in Ukrainian regional centres reporting corruption in local public services in 2024 compared to before the full-scale Russian invasion.1242ae044625

There is an increasing tendency in central government to respond to perceived local corruption by re-centralisation. This is often justified by capacity arguments: because of administrative cohesion,ff2719a76860 central levels of government can enact stricter controls and processes. For example, a recent draft law no. 5655 attempted to transfer territorial planning municipal rights to a centralised body under the premise of fighting corruption; it received pushback from the European Parliament and Ukrainian civil society. Yet, considering a history of misusing anti-corruption to consolidate power in Ukraine,01b8b3bd8bc1 centralisation could strengthen authoritarian tendencies that are more difficult to tackle during war. Moreover, past cases of donor-driven reconstruction, which undermined local accountability by disempowering local authorities, show that centralisation in the name of efficiency has negative unintended consequences for state-building.4c9b650aa96b

This U4 Issue argues efforts must support Ukraine’s democratic state-building and, thus, recognise LSGs as critical actors due to their accountability to local communities. Decentralisation reforms have created a more balanced governance system in Ukraine. For example, reforms reduced executive influence on local communities through independent revenue sources and political self-government rights.ea14ea4c2e19 Decentralisation reforms also fostered public trust in local authorities and social cohesion in local communities, which are important for a democracy.acab9e8100fd Therefore, anti-corruption efforts must be decentralised, while accounting for the opportunities and limitations of LSG anti-corruption capacity. Such efforts must be weighed against their impact on the balance of powers in the system of multi-level governance in Ukraine.

The U4 Issue makes three contributions:

1. It shows that efficiency in recovery must be weighed against the long-term goal of investing in LSG capacity as a democratic state-building measure. LSGs do have capacity gaps, but many address them – regardless of community size or frontline proximity – which shows consistency in anti-corruption and integrity efforts, even during wartime. LSGs also develop innovative, context-sensitive solutions that foster local cooperation and accountability, which are fundamental democratic values.
2. It clarifies the scope and nature of anti-corruption at the local level, which is often misunderstood and underappreciated: many local communities have strengthened their anti-corruption capacities since the Revolution of Dignity in 2013-2014.93704b1bf3e2 This U4 Issue maps the patchwork of legal requirements and local anti-corruption tools. These are possible entry points for further investment and reform.
3. Based on an analysis of existing incentives, it proposes strategic choices and practical suggestions to improve conditions for local anti-corruption capacity. Economic and societal factors encourage LSGs to take outward anti-corruption action, especially to enhance transparency, because it can be evaluated from the outside of LSGs. Inward anti-corruption action – institutional redesign and corruption risk assessments (CRAs) – cannot be easily assessed from the outside. Therefore, these actions are rarely prioritised by LSGs due to resource constraints and the costliness of institutional change. While outward anti-corruption should continue to receive attention, resources and expertise are needed to support LSG institution-building on principles of integrity.

Methodology

This U4 Issue is based on interviews with 20 experts and practitioners in local governance, anti-corruption and development, a focus group with six representatives of five municipalities collected in April–May 2024, and secondary research results. Mayors and deputy mayors invited to participate in interviews and the focus group represent small and medium-sized communities between 8,000 and 400,000 residents), rural and urban ones and varying by security conditions (Annex 1). Interviewed experts represent anti-corruption non-governmental organisations (NGOs), capacity-building initiatives, international technical cooperation, and a state agency. This qualitative methodology offers valuable insights into LSG anti-corruption practices but cannot assess the variation or effectiveness of the reviewed tools.

The Issue is structured as follows. Section 1 reviews the outcomes of decentralisation reforms for LSG powers and their state under martial law. It then outlines the most relevant elements of the national recovery and anti-corruption policies. Section 2 reviews LSG anti-corruption capacity as a patchwork of four dimensions and their constituent tools: institutions; the ability to scrutinise one’s institutional weak points; transparency; and public engagement. The conclusion (Section 3) reflects on the economic and societal incentives for LSG anti-corruption action. The recommendations in Section 4 propose practical steps to support LSG capacity for Ukraine’s government, civil society, international donors, and LSGs.

1. Institutional and policy frameworks

Local self-government (LSG) authorities are important actors for local anti-corruption action. This is due to the semi-autonomous competencies gained in local public service and development planning after the 2014 decentralisation reforms. Yet, LSG actions can be constrained by national institutional and policy frameworks.

Decentralisation reforms and martial law

The 2014 decentralisation reforms created a system of LSG authorities with relative autonomy and resources for public service provision in municipalities (hromadas). Around 12,000 small administrative units were amalgamated into 1,470 more capable hromadas, creating incentives for using economies of scale to improve the efficiency of municipal territory and property governance. Hromadas have directly elected mayors and councils that jointly appoint accountable executive bodies. This gives them relative autonomy in designing local economic and social development according to local needs.2b83b977eb70 LSGs receive a guaranteed share of national taxes and incentives to increase their own revenues so that, even during wartime, state transfers constituted only about a quarter of local budget revenues.

The introduction of martial law due to the Russian invasion impacted LSG operations but did not fully remove their autonomy. The war effort led to fiscal and administrative consolidation. Local state administrations gained overlapping competencies in occupied hromadas or those on the territories of hostilities, and oblast military administrations increased their control over municipalities, which depend on state transfers.13a5fd986c16 Also, the government reduced LSG tax revenue share by withholding personal income tax for military personnel directly into the state budget. By 2024, more LSGs were feeling a limited influence on strategic decisions and a lack of central authority responsiveness.91dca436275f Despite these challenges, LSGs continue to provide public services, even during the war.

National recovery and anti-corruption policies

National recovery and anti-corruption policies feature conflicting developments. On the one hand, there is an advanced anti-corruption legislation and NACP supports LSGs with training and mentoring. On the other hand, recovery planning architecture features unnecessary overlaps that stretch LSG capacity and complicate public recovery monitoring.

The legal framework for recovery and reconstruction remains in flux due to the war, complicating LSG operations and public monitoring. Overlapping planning documents, such as the mandatory recovery and development plan for recovery territoriesab0390cf790a and the optional ‘complex programme for recovery of the territorial hromada territory’,6dfa2c5b36f5 create confusion for LSGs.fd9106961a2f While the ‘complex programme’ offers benefits such as data-driven design and public engagement, it duplicates efforts for highly damaged municipalities that are also required to prepare a recovery plan. These documents lack alignment with national (the State Strategy for Regional Development and National Revenue Strategy), regional, and local sectoral (eg spatial development, education, healthcare) strategies, potentially hindering effective recovery.e064dd3f93ec Although the responsible Ministry for Communities, Territories and Infrastructure Development of Ukraine (MCTI) has updated the State Strategy for Regional Development, its impact remains uncertain while its adoption is pending, and until an action plan is developed.597c13aed743

The introduction of the Urban Planning Cadastre at the state level is a positive development because it enhances transparency and accountability in decision-making over territorial planning.e0483b8e5b3d he cadastre will collate information from local registers on urban planning documentation, buildings, addresses, and damaged property. This aims to address the risk of corruption when a lack of information about territorial development plans prevents public monitoring of construction projects.8b5f4a537b2e LSGs must now upload urban planning documents to a unified electronic state register. The new regulation also recommends making existing documents publicly available.

Anti-corruption legislation, including the National Anti-Corruption Strategy and Programme, outlines LSG obligations. These include handling corruption reports, preventing and resolving conflict of interest (CoI), and supervising asset declarations.15154a3df367 However, as one Anti-corruption Office (ACO) has experienced, laws governing public service in LSGs are not fully aligned with the newest anti-corruption legislation. For example, contradictions in CoI policies create confusion about which LSG employees they apply to. This affects policy implementation in areas such as schools and municipal enterprises where working dynasties are firmly part of the professional culture.bccd4329e472 Legislation for councillors only requires them to declare CoI during voting and then abstain, but declaration and abstaining does not necessarily solve the problems of misuse of land or property.c39faae0c7a8

LSGs receive support from the National Agency for Corruption Prevention (NACP), which offers tools for local corruption risk assessments (CRAs), training on whistleblower protection, asset declaration, and CoI policies. The NACP acts as a partner and coordinator, allocating resources to build the capacity of Authorised Units or Persons for Prevention and Detection of Corruption – ACOs – and providing guidelines and templates for anti-corruption programmes.b6171f24942c It also fosters collective action and a community of practice among LSGs. One LSG representative reported that working with the NACP helped shield their hromada from undue influence attempts.addb871b680b

2. LSG anti-corruption capacity: institutions and tools

This section details the patchwork of institutions and tools that provide local self-government (LSG) anti-corruption capacity. The subsections outline the four dimensions in Table 1, and summarise institutions or tools, their functioning state, advantages and challenges (see Annex 2 for a more detailed overview).

2.1 Institutions that support LSG anti-corruption capacity

LSGs have several institutions, which directly or indirectly contribute to their anti-corruption capacity. These are the Anti-Corruption Office(r) (ACO), Project Management Office (PMO), local councils and LSG associations (LSGAs). Most of these institutions need support to help LSGs’ anti-corruption capacity. Due to their coordinating functions, ACOs and PMOs have the potential to push for improvements in organisational processes. Yet, their current analytical and communication capacity is limited. Also, the institutional design of ACOs needs revision – their many analytical and coordinating tasks and lack of autonomy mean they are rarely compatible with the practical realities of small hromadas. Anti-corruption interventions need to capitalise on the potential of councils and LSGAs.

Anti-Corruption Office(r) (ACO)

Under current legislation, Oblast and city council administrations must institute an ‘authorised anti-corruption unit (officer)’ – the ACO – to handle corruption prevention and detection.2c5d6c51ef89 While rural council administrations are not required to create ACOs, some appoint an officer to coordinate anti-corruption policy action. Even without a formal ACO, an LSG official, often a legal expert, monitors asset declarations and conflict of interest (CoI). According to the National Agency for Corruption Prevention (NACP) model provision, ACOs must:

• coordinate corruption risk assessments and anti-corruption programme development
• ensure the implementation of CoI and whistleblowing policies
• report non-submission or late submission of asset declarations
• provide methodological and consultative support for compliance with anti-corruption legislation.

The ACO functions often conflict with practical realities. ACO positions demand a mix of coordination and analytical skills, legal expertise and an insight in LSG operations that is difficult to find, especially in small municipalities. Consequently, most LSGs have one officer who juggles their ACO role with other duties. Only a quarter of officers are full-time, and just 7% have dedicated offices, which leads to functional gaps.32431451a53d Specialised structures are limited to oblast centres, such as Kharkiv93489e06d7f6 and Mykolayiv, which have multiple officers for managing CoI, whistleblower policies, and asset declarations. Another issue is that ACOs report to the mayor. While a supportive mayor can ensure proper working conditions, lack of mayoral support can lead to ACOs being sidelined.

The NACP recognises the institutional weakness of an ACO function in the National Anti-Corruption Program (p. 3) and its action plan (p. 21-26). As a countermeasure, NACP emphasises: (i) building a community of practice and training; (ii) public engagement for corruption risk analyses and elaboration of solutions; and (iii) authorising ACO appointments or dismissals in municipal enterprises.

City institutes and other PMOs

PMOs at LSGs play an indirect role in anti-corruption. These offices, established as municipal enterprises (eg City Institute in Lviv, Drohobych, Mykolayiv) or as officers within smaller municipalities (eg Horodenka), handle fundraising, project management, and internal coordination for hromadas’ international cooperation. They bolster local anti-corruption efforts indirectly by liaising with community groups, integrating stakeholder input into municipal projects, and ensuring accurate reporting to partners. Over the past 15 years, these entities have driven social innovation in transparent, participatory local governance. Despite this, many LSGs have trouble defining the value of PMOs, and integrating them into LSG structures.e67a8069cee9

Councils

Councils were important spaces for bargaining and negotiating anti-corruption policies before the Russian full-scale invasion. Also, opposition councillors often introduced checks on mayors and executive bodies. In some areas, anti-corruption activists were elected to councils and advanced transparency policies.8521484acabc Some councils used their powers to impeach mayors perceived as corrupt and launched new elections that put reform-minded teams in office.9567ee1d7a96

During the Russian full-scale invasion, councils’ role in policymaking, including anti-corruption, diminished due to increased executive power under emergency. Since decentralisation has made local councils more representative,40e0968d7eb9 councillors should be targeted to build local anti-corruption capacity.

LSGAs and collective action

LSGAs promote bottom-up corruption prevention by facilitating peer learning and sharing good governance practice. For example, the Association of Ukrainian Cities, in collaboration with the Congress of Local and Regional Authorities of the Council of Europe, advances open government principles among Ukrainian municipalities. Their National-Local Dialogue platform on open government has accelerated the adoption of e-governance and open data practices. The Association of Ukrainian Cities and the Congress also helped Ukrainian municipalities participate in global peer exchange and gain recognition for citizen participation innovations.83fcc71b1093

Throughout the full-scale Russian invasion, collective action initiatives continued to help prevent corruption and build trust. LSGs value such networks, because they are a way to demonstrate trustworthiness, and to exchange knowledge on anti-corruption practices. For example, the Coalition of Virtuous Hromadas, established by the non-governmental organisation (NGO) Cegrin, aimed to demonstrate transparency and build trust with partners. The coalition promoted voluntary reporting on the use of humanitarian aid via the Prozorro online procurement portal.25e8b5efc724 The Coalition grew from ten to 17 LSG participants in 2022-2024, which indicates LSG interest in transparency, and the peer learning to achieve it. Yet, this case also shows how critical facilitators are: the NGO stopped engaging with the project, and the latest report was in January 2024.

As a facilitator, the NACP sustains communication and keeps mutual commitments on participants’ agendas. Its two integrity-promoting initiatives (Box 1) could solve the sustainability problem that plagues bottom-up anti-corruption initiatives.

2.2 The ability to scrutinise and address institutional weak points

Some LSGs progressed in inward-oriented anti-corruption measures that address gaps in internal systems: corruption risk assessments (CRAs) and anti-corruption programmes; audit and risk management; territorial planning and development; and redesigning LSG administration and processes. Many others will need external support since LSGs often have a complex system of departments and municipal enterprises, where some leaders (such as mayor and deputies) may be committed to anti-corruption, while others lack dedication, and may even oppose regulations that go beyond the legal requirements.8aac3d4c2efa

Corruption risk assessments and anti-corruption programmes

Only oblast councils must adopt an anti-corruption programme. Some municipal enterprises and legal entities must also have one, depending on their size and volume of procurement.7d2a201135f5 Ideally, this programme should follow a CRA.

The NACP envisages CRA as an internal collaborative effort, coordinated by an ACO, and supports it with guidelines, mentorship, and, in some cases, expert assistance. Good practices like those in Suvorove town hromada (Odesa oblast), illustrate the intended approach to preventing corruption. The LSG analysed corruption risks using participatory working groups with LSG employees and public perception measurements. These actions ensured that LSG officials understood the logic of anti-corruption measures and contributed to LSG accountability for implementing the programme. This case is an exception because it has ongoing support from NACP.29d7e7013349

CRAs can burden already overwhelmed staff, who may lack necessary skills, and could view the CRA as a personal accusation of corruption, further discouraging their cooperation. This results in CRAs being often superficial.ca05ba0cbd87 It might be more practical to outsource CRAs and anti-corruption programmes to technical experts. An internal coordinator could provide resources, facilitate stakeholder participation, and follow up outcomes.

Audit and risk management

Under the Ministry of Finance, the State Audit Service of Ukraine (SASU)* is responsible for auditing local budgets, including use of Ukraine Facility funds. SASU can halt public procurement if irregularities are found, and criminal liability was recently introduced for obstructing or misleading SASU.0403aba69257 However, SASU struggles with a lack of qualified personnel and high employee turnover. While it lacks independence from the executive,0d7a90dba72a SASU also acts on tips from watchdogs, showing its openness to public input. However, local officials sometimes ignore SASU’s legal demands. For example, an anti-corruption NGO MEZHA requested that SASU check a possible overpricing in the procurement of restoration works for a residential building in Zaporizhzhia. However, ‘due to obstruction by its management’ (a municipal enterprise), SASU’s auditors were unable to start work.2d11d669eafa

Besides being subject to SASU scrutiny, LSGs also conduct internal audits to review municipal enterprises and procurement processes. The interviewees cited that this was for self-regulation or to avoid legal penalties (Box 2). Evidence shows that LSG leaders are responsive to internal audits and have changed procedures or dismissed staff accordingly.ce04723cd887 LSG leaders seem to appreciate the internal audit function, making it a promising area for anti-corruption capacity improvement. The lack of systematic data about LSG internal audit practice and its strengths and weaknesses warrant a separate study.

Risk management is crucial in procurement. There are no formal criteria, but interviewed municipalities stressed the need to review technical and financial tender documentation before publication, assess procurement needs, compare estimated prices with market rates, and conduct due diligence on contractors. This role may fall to an ACO, (as in Mykolayiv and Stryi),6f6a5c97c474 or another employee. These criteria reflect common violations noted by SASU and watchdog complaints, which shows that LSGs respond to feedback.

Territorial planning and development

LSGs are responsible for local territorial planning. They issue ‘urban planning conditions and limitations for new construction’ (i.e. construction permits). The NACP has identified serious corruption risks due to local institutional weaknesses and complex national regulations.4cc67de5435e Often, LSGs issue permits without updating general or zoning plans,74771cb36825 resulting in chaotic construction. Legally required public meetings and specialised advisory councils are vulnerable to manipulation by private interests, which could mean favouring developers over the public.ec03b4702cc3 These issues may stem from vested interests, or a lack of legal and technical capacity within LSGs to scrutinise permit applications, or to litigate against illegal construction. With proper capacity, LSGs can enforce permits and work with state oversight to curb illegal construction.136ca8033890

Recovery planning offers a chance to address these problems using the ‘complex programme for the recovery of territorial hromada territory’, requiring LSGs to revise territorial plans and hold public consultation according to pre-set rules.0a2b53403c9f This type of planning document also receives international technical assistance that can partially help with resources. But unnecessary duplication in recovery planning documentation must be avoided. Further actions include enhancing technical capacity, supervising construction, and training new urban managers.

Redesigning LSG administration and processes

LSGs sometimes promote integrity by streamlining internal administration and standardising processes. This is often in cooperation with external actors, such as international development donors, because of the technical and costly expertise needed (Box 3). Some LSGs cooperate with NGOs, such as Lviv Regulatory Hub or MEZHA, which help review individual processes. Another approach is to create municipal procurement organisations to handle specific procurement items – such as the one in Kharkiv, which coordinates procurement for various departments under the public procurement legislation.532f9b621058

2.3 Transparency, open data and e-governance

Transparency is an outward anti-corruption measure that allows stakeholders to evaluate LSG trustworthiness and is one of the better-developed components of LSG anti-corruption capacity. At the same time, further efforts must address the lack of upfront transparency of LSGs’ decisions, information on housing options and procurement to ensure willing citizens can intervene before LSGs make policy choices.

Ukraine excels in legislation and technology for open data and access to information, ranking among Europe’s top countries in 2024, despite the war. However, there have been some setbacks in open data and related services following the Russian invasion.b4dda6f35942 Essential services such as the Unified State Register of Legal Entities and the public cadastre map are partially or wholly inaccessible to the public due to conflicting regulations and arbitrary closures by data holders. In early 2024, the Ministry of Digital Transformation proposed a plan to address these issues, balancing secrecy and public interest, while restoring access to critical registers.

National legislation requires local-level transparency. Since 2015,c1aa1d02e636 LSGs must publish draft and adopted council decision and datasets on education, healthcare, social housing lists, land privatisation, greenery, contracts, advertising. They must also publicise council and commission meetings, publish their recordings, and make asset lists available in machine-readable formats. These requirements were reiterated in 2024. To enhance transparency in recovery efforts, the Ministry for Communities, Territories and Infrastructure Development of Ukraine (MCTI) introduced the Digital Restoration Ecosystem for Accountable Management (DREAM), which was developed with the RISE Coalition and international donors. DREAM is not mandatory; still, 944 out of 2,325 projects were initiated by LSGs.92866502db14

According to Transparency International Ukraine, LSGs improved transparency between 2017 and 2021.0707963b9353 After setbacks due to wartime uncertainty and technical issues in 2022, there was slow improvement in 2023, and 12 cities improved from ‘untransparent’ in 2022 to ‘partially transparent’ in 2023. By the end of 2022, 18 municipalities had updated their datasets on the national open data portal. Municipalities with pre-existing open data portals, (such as Dnipro, Drohobych, Vinnytsia, and Lviv, maintained them), and others (such as Mukachevo) introduced new portals during the war.cdd0e631b8b2

Challenges are mainly caused by lack of access to local open data about LSGs and their subordinated entities’ operations. In 2023, LSGs did not publish all the required datasets and limited access to others, citing Ministry of Digital Transformation recommendations for the period of martial law including closing the national open data portal for frontline municipalities.b6cc49dc0303

Transparent municipal asset management

Transparency in municipal property and land management among 80 cities was around 35% in 2023.cadce76aa038 The cities published lists of immovable municipal property (30 out of 80) and land or land use rights subject to land auctions (25 out of 80). Out of 80 cities in the Transparency International Ukraine assessment, 43 have functioning Geo-Information Systems (GIS), which offer geolocated information on property and land use.46360701abdf Depending on the technical solution, GIS integrates property registers with digital maps, allowing businesses to bid on property through Prozorro.Sale (stylised with a full stop) – the government-owned auction site; to monitor urban development and verifies public authorities’ decisions on property management (Box 4).

Since 2017, Prozorro.Sale has boosted profits and reduced corruption in privatisation and lease of state and municipal properties. More than half of sellers (523) were LSGs in 2019.2225e97204cc In 2023, 334 LSGs conducted about 7,300 auctions through the platform, up from 4,500 auctions by 304 LSGs in 2022. However, around 40% of surveyed cities do not list properties on Prozorro.Sale.55fa912c92de Issues include the misuse of a ‘buy-out’ loophole for selling leased properties at below-market prices.

Several gaps in transparent asset management need to be addressed. Many cities fail to publish lists of land for privatisation or use, particularly for construction, and the auditing of municipal housing registers is weak. This lack of transparency is also a problem for housing allocation, especially for those people who are internally displaced or whose homes have been destroyed. For a fair recovery process, it will be necessary to prevent misuse in allocating social housing built at donor or municipal cost.73cd89e53244 GIS technology is costly and mainly used by larger cities. Small municipalities often lack the funds and expertise for effective data maintenance and cybersecurity. For example, the City Center for Information Technology in Lviv, a municipal enterprise that manages geoportal, employs 47 professionals, whereas smaller municipalities struggle to allocate competitive salaries for information technology (IT) support.

Transparency in decision-making

While Ukrainian LSGs have improved transparency in decision-making, reports are mainly published after a decision is taken. Most LSGs publish decisions, regulatory acts, and budget reports and, in 2023, improved their performance in broadcasting of council meetings compared to 2022.d31a48e3a121 This helps public monitoring, but these measures do not allow for intervention, and can only prevent corruption if decision makers are sensitive to public concerns, or if law enforcement acts on those concerns.

The availability of upfront information before decisions are taken needs to improve, especially information in digital format, given the scale of internal displacement.97c8d1d422a2 Detailed scrutiny of draft council decisions on land management or lists of objects for construction/reconstruction and maintenance0d3f67062623 could enhance anti-corruption measures and promote social accountability. However, many LSGs do not publish this information on their websites.2eb323759e63

Procurement transparency

Ukraine has institutionalised transparency in public procurement through the e-procurement system, Prozorro. Despite a brief shift to directly awarding contracts during the war, most procurement is via Prozorro, and 77% of procurement expenses were competitive in 2023. Since 2022, organisations must publish justifications for direct awards, and the State Audit Service’s oversight has expanded to include these contracts.d782bbea18fd

However, procurement regulations were relaxed to allow faster completion0099ee44bcd8 and to address criticisms of Prozorro’s delays in emergency recovery efforts. These changes allowed single-bidder tenders, understanding that contractors may have limited capacity and reconstruction needs are high. Also, the new Draft Law on Public Procurement (Reg. No. 11520) allows for procurement without Prozorro, which means no report is needed if the value of goods or services is less than 50,000 Ukrainian hryvnias, or works are valued at less than 200,000 Ukrainian hryvnias. Watchdogs are concerned that this could lead to contract splitting and misuse of funds, (especially in smaller hromadas), and the lack of reporting will prevent public monitoring.9a6d6dc57a4e

While acknowledging its limitations, LSGs routinely use Prozorro for public procurement with state and local funds as the portal helps avoid external pressure from vested interests, especially for costly construction projects.3370e0ebceca For purchasing pre-approved food and medicine from vetted suppliers, LSGs can use Prozorro.Market.

However, many tendering organisations do not publish value estimations for construction works, making it difficult to monitor prices.47d819862e8b Overpricing is a known corruption risk, which public monitoring can address if data is available. The new legislation aims to improve this, but it could strain LSG resources if it duplicates existing reporting systems.

Electronic governance

Ukraine has been using e-services such as the Diia app to reduce human discretion in public service and resource allocation. The Association of Ukrainian Cities, with the Congress of Local and Regional Authorities of the Council of Europe, created a Road Map for Open Government and E-governance, emphasising digital complaints and citizen inquiries, access to e-services, national and local data compatibility and electronic document systems.

Local governments have started implementing e-service platforms, which help reduce petty corruption and increase inclusivity (Box 5). However, adoption is limited due to lack of resources and skills. For instance, only about 13% of 80 surveyed cities have e-applications for social housing. Given the extent of housing damage, this access needs to improve.25e6e0d59e41

2.4 Public engagement in LSG anti-corruption action and integrity in recovery

LSGs have been at the forefront of citizen and stakeholder engagement in Ukraine since 2014. LSGs have well-developed tools that inform citizens after events and enable public monitoring. They have experimented with innovative tools such as participatory budgets, multi-stakeholder platforms and standard consultation mechanisms.d10aab301e3b Sustainable anti-corruption capacity in Ukrainian LSGs often emerges from cross-sectoral coalitions, which develop organically over time. At the same time, more work is needed to allow for pre-decision public input.

Citizen engagement and collaborative innovation

During the Russian invasion, LSGs engaged the public in crisis response but limited citizen involvement in day-to-day decision-making and recovery planning. Digital tools such as Google Forms and the SVOI chatbot were introduced or adapted to allow people to report large-scale damage.0799960be9ad However, NGOs struggled to use formal participation with unresponsive LSGs and OMAs, and only 14 out of 80 cities included civil society representatives in damage compensation commissions.60a454e0454a

Some LSGs embraced innovative, bottom-up approaches (Box 6). Such LSGs consulted with street and neighbourhood committees to set project priorities.1c209923dfb8 Informal communication with community groups and co-production initiatives with NGOs and urban planners were also beneficial in decreasing misinformation and corruption rumours.e20ec3dfe2af

There are also cases where LSGs partner with non-state stakeholders to co-create policy. This has reshaped service systems, resolved problems, and allowed stakeholders to become self-sufficient – for example, youth-initiated youth spaces and youth councils in Ratniv, Volynska oblast, and Fastiv, Kyiv oblast.5e2fd9849424 Such initiatives improve recovery by incorporating early citizen input into planning, enhancing public trust, and increasing LSG accountability.

Despite promising cases of public engagement for recovery, LSGs hesitate to engage NGOs in elaborating direct anti-corruption measures because the latter are associated with punishment. Another challenge in cooperation between LSGs and NGOs arises in conceptualisation of what the effective joint efforts could look like, according to Kharkiv City Council ACO Lead:

Also, NGOs and ACOs may prioritise different types of corruption, which can lead to mutual frustration, and missed opportunities for designing compliance systems and building public trust.c336c5fdd868

Cross-sectoral LSG, civil society and business coalitions

In Ukraine, cross-sectoral coalitions of business, LSG, and civil society representatives have been central to solving local development problems. Through collaboration, representation, and social accountability,8f92de1433f5 stakeholders in such coalitions also tackle local corruption as an obstacle to reform. Their organic and unstructured communication produces reform commitments or ‘political will’ (Box 7).

Under martial law, informal cross-sector communication supported positive local governance practices that had existed before the Russian invasion. For instance, in the Hoshcha town hromada (Rivne oblast), leaders established trust with major agricultural players, ensuring fair treatment and avoiding preferential land allocation.8b6ebc07bff5 More research is needed to fully understand the impact of informal cross-sector communication during the war. However, interviewed LSG representatives suggest that it could play a positive role in governance integrity.

3. What drives LSG anti-corruption capacity?

LSGs have economic and societal incentives to introduce anti-corruption tools. We can better support LSGs by understanding what incentives improve anti-corruption capacity.

Due to their unique position as a locally accountable self-government authority, LSGs prioritise outward-oriented anti-corruption tool – those that external observers can evaluate, such as transparency, citizen engagement and project management offices. This creates economic and societal incentives for improving governance that stakeholders – residents, NGOs, and business and international partners – can evaluate. At the same time, inward-oriented anti-corruption tools and measures that target the internal organisational processes and that external observers usually lack insider information to evaluate, need additional incentives.

Economic incentives

Self-governed units – such as Ukrainian hromadas after the decentralisation reforms – need resources.19988e9016cc Economic considerations incentivise transparency and accountability:

Competition for external financial and material resources drives LSGs to adopt anti-corruption tools as evidence of trustworthiness to attract potential partners, by:

• Increasing transparency in reporting for received aid to showcase reliability to international development programmes and foreign municipalities.
• Responding to public evaluations (such as Transparency International Ukraine’s Transparent Cities assessment) to avoid negative reports from local watchdogs.beff4e1b6ec8 For example, with increased humanitarian aid needs and occasional misuse reports, Ukrainian municipalities began voluntarily reporting aid their websites and social media to demonstrate credibility. Some use Prozorro, or develop their own systems to report disaggregated data in machine-readable formats.294d91c2d519

The relationship with business is more complicated. LSGs may improve governance for local business while pursuing tax revenues and business donations. With the full-scale Russian invasion, businesses became crisis management partners, leading local governments to improve communication and involve enterprises in anti-corruption programmes.4ca8b6db9ab1 There are also risks of institutional capture: Business owners with councillor mandates could misuse their positions to prioritise their own interests.8e355b512331 However, businesses can also support fairness by requesting streamlined procedures, and creative industries can transform governance to be more transparent and cooperative.75701114e41c

Societal drivers

Societal accountability can also drive LSG anti-corruption policies. Decentralisation reforms empowered LSGs and made them points of public accountability. LSG representatives cited responsiveness to residents’ concerns as a critical factor. The full-scale Russian invasion increased public intolerance of corruption, which many Ukrainians view as a major issue.8295be6c5db9 Citizens frequently voice their concerns and demand accountability from LSGs. For instance, reports of overpriced purchases by Kyiv LSG inspired the Money for the AFU campaign to lobby for increased local defence spending.

National and local NGOs impact local integrity as watchdogs,8c3c454f7d13 facilitators (creating dialogue opportunities),0284051669cc partners (enhancing capacity, sharing knowledge and training).ed37b4522c0d Sometimes, anti-corruption activists may join LSG executive bodies to implement reforms.df0587d5e191

LSG officials are integrated in their communities.As community members, many LSG employees are committed to the community’s prosperity.6e74c3b9fe41 In smaller communities, officials are sensitive to public perception due to short social distance and may address integrity breaches to protect their reputation in response to formal complaints and corruption rumours.3170958b2675

4. How to support LSG anti-corruption capacity

The first and most urgent need for Ukraine is military support to ensure it can fend off Russian aggression. Next, Ukraine’s recovery will need a large volume of international aid. The rush for the efficient use of such assistance had previously undermined local capacity with negative consequences for democratic stability.06d29cb4b9a7 Therefore, international partners and the government of Ukraine should elaborate on ways to incentivise local ownership and appropriate local anti-corruption policies. LSGs are central to local ownership of recovery planning and anti-corruption capacity: their enhanced competencies for local development after decentralisation reforms created economic incentives and included societal drivers for accountability.

With capacity support, LSGs can implement effective anti-corruption measures and drive organisational and social innovations. Therefore, the Ukrainian government, civil society, and international partners should empower LSGs to handle recovery and reconstruction.

Recommendations to enhance LSG anti-corruption capacity include:

Maintaining the critical role of LSG autonomy and clear legal frameworks for local anti-corruption action. Ukraine government support should include:

• Maintaining decentralisation achievements by ensuring that state agencies’ oversight and coordination does not replace LSG autonomy in urban planning and reconstruction. Unified data registers such as the Digital Restoration Ecosystem for Accountable Management (DREAM) and Urban Planning Cadastre can be used to coordinate information.
• Streamlining state sectoral funding for local recovery by reducing implementation gaps and simplifying project monitoring. Eliminate duplicated documents on recovery territories. Establish clear communication with ministries through the Ministry for Communities and Territories Development of Ukraine (formerly the Ministry for Communities, Territories and Infrastructure Development of Ukraine).
• Implementing the learnings from the Fund for Elimination of the Consequences of Armed Aggression in terms of direct LSG application for funding, transparent evaluation and selection methods for any similar initiatives. The fund’s participatory component warrants replication, but it should be extended to include representatives of LSGs and civil society organisations in the interagency working group.
• Implementing a unified open data policy under martial law, with clear secrecy criteria, including machine-readable tender value estimations for construction.
• Recognising and supporting the National Agency for Corruption Prevention’s (NACP’s) role in promoting bottom-up integrity measures in LSGs alongside direct anti-corruption efforts.

Support from international partners and Ukrainian civil society should include measures to overcome lack of staff and gaps in analytical, communication and data management skills, such as:

• Overcoming operational weaknesses in Anti-Corruption Office(r)s (ACOs) as coordinators for direct anti-corruption measures and organisational process improvements. This may include changing their function to analyse process quality and coordinate improvements within LSG and with stakeholders. International Organization for Standardization (ISO) quality management standards could also help to prioritise organisational efficiency over legalism.cf07fd2015e5
• Training LSG integrity champions, including anti-corruption officers, to counter the influence of entrenched experts in procurement and urban planning. Expert teams of auditors, architects, and urban managers could help reformers deal with more technically savvy, experienced staff who may not be committed to reforms.d0bc39b32845
• Supporting LSGs to have honest discussions about recovery priorities with residents, including the displaced. Facilitate virtual or in-person meetings, design workshops, and enhance digital communication tools for LSG staff. Support people and organisations that facilitate communication, including NGOs and municipal enterprises.
• Analysing, showcasing and spreading good practices through horizontal communication to boost constructive corruption prevention.3edeb4ef445a Existing examples of such activities include the Forum of Virtuous Hromadas, Open Government Weeks and Transparency International Ukraine's 'Transparent Cities' Program.
• Nurturing communities of practice for anti-corruption innovation within LSGs. Support NGOs and NACP to maintain these communities because communities need facilitators before they can self-organise to spread effective solutions.
• Encouraging inter-municipal cooperation to overcome capacity gaps in small municipalities. Pool expertise and use economies of scale to reduce costs for project management, research and analysis, baseline asset auditing, data gathering, software maintenance, and specialised citizen engagement formats. This can be achieved through co-funded municipal enterprises or dedicated NGOs, which development cooperation partners could also incentivise with grants.
• When inter-municipal cooperation does not cover capacity gaps, establishing oblast-level coordination platforms to address deficiencies in data production, software acquisition, project design, and international communication. These platforms can be created by oblast authorities (councils and administrations) or as separate entities.201e77188f75 A challenge here is overcoming the administrative culture that understands coordination between oblast and local authorities as top-down steering by oblast authorities.89da3ca8f0a4 Yet, coordination is a service, requires mutual agreement and allows all participants to shape interactions.28bcf0374514 One positive step is efforts by the United Nations Development Programme’s (UNDP) to boost Oblast Military Administration coordination capacity with municipalities (among other stakeholders).c696555bd920 Alternatively, oblast elected authorities, such as the Rivne Oblast Council, which facilitated assistance for internally displaced persons through an informal platform with LSG heads, demonstrate the potential of oblast councils. However, international donors and civil society often overlook oblast councils as coordination platforms.

LSGs can support their capacities by participating in dedicated training programmes and novel solutions, including:

• Prioritising the development of core managerial skills in municipal governance through targeted LSG training programmes and certified education, including project management and data handling skills. Address the public demand for integrity by preparing certified practitioners in urban development.
• Establishing regular, simple, and direct communication with hromada stakeholders, including active groups, supporters, and critics. Tailor channels to audience preferences, using digital tools and physical community meetings (where security allows). Communication solutions should not be complicated or expensive. They should also be context-specific, for example, prayer breakfasts or ‘coffee with the mayor’.904f618f6a07
• Engaging anti-corruption activists, NGOs, and local businesses in assessing corruption risks, developing anti-corruption programmes, and supporting ACO activities. Effective communication helps these actors understand LSG capabilities and reduces suspicion.8d56d18326a9 Communication with the proactive public can also help integrity champions within an LSG to create anti-corruption coalitions to exert public pressure, especially where LSG leadership is unresponsive.
• Investigating creative ways to boost LSG capacity by organising youth and practitioner internships and cooperating with universities for research-related tasks or professional training.
• Involving active groups such as youth councils, NGOs, seniors’ councils, and organisations of internally displaced persons in co-creating public services. These groups can take on coordination and communication roles and liaise between LSGs and their communities.e040855ac685

Annex 1. Respondent list

Annex 2. Anti-corruption capacity overview for local self-government (LSG) authorities