Capital Budgeting and Public Investment Projects in Ukraine

Abstract

This chapter discusses the budget process for public capital investments in Ukraine, presents controversies in the current process, and offers several avenues for improvement. In doing so, the author provides a description of the country's normative capital public budgeting framework, presents the institutional setup, and tracks Ukraine's public capital expenditure trends for nearly three decades (1991-2016). The study then discusses implementation, audit, and performance issues in Ukraine's public capital expenditure management and provides recommendations. Because of the country's limited fiscal capacity as compared to its massive infrastructure needs, the author posits that Ukraine can no longer afford to delay or ignore its most pressing public capital investment needs. Because the current list of capital investment proposals is underfunded and too long, the author suggests that the government focuses on finishing strategic, high-priority public projects, while other capital spending proposals target private sector financing once it becomes more readily available.