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How to Organize Reconstruction Aid for Post-War Ukraine

Before significant funds are committed to Ukraine’s reconstruction, it is important to determine who will control and direct the money and how the recovery will be structured. Internal and external transparency will be crucial, as well as planning for a project that could take years.

BERKELEY – Earlier this month, high-level representatives from over 40 countries gathered in Lugano, Switzerland, and pledged support for ambitious plans to reconstruct Ukraine. The Ukraine Recovery Conference was an important milestone in preparing for the reconstruction of Ukraine, indicating that significant resources may be invested in the country after the war. But the conference did not shed much light on key issues. How will reconstruction be organized – and who will control and direct the money?

These are difficult questions that require thorough consideration, and they should be addressed before significant funds are committed to Ukraine’s recovery. An optimal design would reflect the importance of several factors.

For starters, it is necessary to determine how centralized or decentralized the reconstruction will be. One extreme is Gosplan, the Soviet agency that dictated the minutest details of production. Although the Soviet Union’s centrally planned economy failed in the long run, central planning can mobilize resources in the short run. But this short-term gain comes at a high cost – the Soviet economy was plagued with inefficiencies.

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