Public policy mechanism for public-private partnership in the context of Ukraine’s socio-economic recovery policy

Abstract

This article examines the public policy mechanisms of public-private partnerships (PPPs) in the context of Ukraine’s socio-economic recovery. The relevance of the study is determined by the need to identify effective instruments for mobilising financial, technological, and managerial resources to implement large-scale post-war reconstruction projects amid limited public budget capacity and growing demand for the modernisation of infrastructure, energy, healthcare, digital transformation, and other strategic sectors. The study argues that recent reforms of the legislative framework governing public-private partnerships have created the need for new approaches to organising cooperation between the state, the private sector, and civil society to ensure effective project management, balanced risk allocation, and enhanced investment attractiveness. The aim of the article is to develop public policy mechanisms for integrating public-private partnerships into Ukraine’s socio-economic recovery process, with particular emphasis on infrastructure reconstruction. To achieve this objective, the study employs systems, institutional, structural-functional, comparative, and inductive approaches, enabling an analysis of existing partnership models, the identification of their strengths, and the formulation of recommendations for improving PPP implementation mechanisms. The article proposes a conceptual framework for the operation of public-private partnerships based on a concession model involving public authorities, private investors, banking institutions, credit rating agencies, insurance companies, and advisory organisations acting as independent intermediaries among project stakeholders. A concession project financing model is developed using two classes of debt instruments—senior debt and mezzanine debt—to diversify risks, broaden the range of potential investors, and strengthen the financial sustainability of PPP projects. Furthermore, the study proposes a three-stage algorithm for the multi-criteria evaluation of public-private partnership models based on economic, social, governance, and technical criteria. This framework enables the selection of the most appropriate PPP model while taking into account the interests of the state, the private sector, and society. Particular attention is devoted to identifying the role of public-private partnerships in implementing the priority areas of Ukraine’s post-war recovery defined by the National Council for the Recovery of Ukraine from the Consequences of the War. The study substantiates the potential application of PPP mechanisms in damage assessment, infrastructure reconstruction, energy development, urban planning, digital transformation, healthcare, environmental security, economic development, and European integration. Finally, the article proposes a public policy framework for PPP implementation that includes the institutionalisation of financing mechanisms, the involvement of advisory organisations throughout project preparation and implementation, the integration of the proposed multi-criteria evaluation model into national methodological guidelines, and the implementation of a comprehensive strategy for the use of public-private partnerships in Ukraine’s socio-economic recovery. The study concludes that the proposed mechanisms can enhance the effectiveness of public policy, strengthen trust between the public and private sectors, stimulate investment activity, improve risk allocation, and accelerate Ukraine’s post-war reconstruction.