Why Public Investment Management Matters in Conflict Settings

Public investment management (PIM) sets control systems for planning, budgeting and delivering public infrastructure. In the contexts of armed conflict or conflict recovery, the task is even more important as it lays out systems and frameworks necessary for the longer-term recovery, rebuilding vital infrastructure and mechanisms for basic service delivery and attracting investment.

The Challenge: Why Building Things in Conflict Zones Is So Hard

In conflict and early recovery settings, public investment choices are never just technical. They shape legitimacy, trust, and the ability of the state to demonstrate progress to citizens under extreme pressure.

Governance systems are pressured by political risk factors, fiscal constraints and allocation of funds towards imminent priorities (i.e defense in Ukraine, or oil sector in Iraq). This has a direct impact on setting up PIM systems and processes in place; the urgency of the circumstances like combatting foreign threats or mitigating public unrest may lead to bypassing the best transparency and accountability practices.

When governments can credibly show how projects are selected, funded, and delivered, they reduce the space for politicised decision-making and help rebuild confidence that public resources are being used for public benefit.

Ukraine: Setting a Gold Standard for Transparency Under Fire

Despite the ongoing full-scale Russian invasion since 2022, the country secured steady international support for its rebuilding. International financial institutions and donors remain committed to supporting the recovery, even in the context of war, whilst applying the principle of ‘building back better’.

In Ukraine, ASI supported government to embed the UK’s 5-case model – a structured framework for testing the strategic, economic, financial, commercial and management case for a project – into the legislation governing PIM reform. Once embedded, it became the backbone of Ukraine’s new Single Project Pipeline, the national system through which recovery projects are identified, appraised and prioritised. ASI’s support went beyond legislative design: the team helped prepare critical infrastructure projects for investment and supported the Public Private Partnership Agency with its business plan development.

Within the PIM space, all recovery projects must now be submitted through DREAM (Digital Restoration Ecosystem for Accountable Management) – a digital one-stop shop that is mandatory for every project initiator in the country. This gives government real-time visibility of where priorities lie, while offering donors and citizens the same access to data. It also incentivises more effective resource allocation: a consistent template makes projects comparable, so scarce resources can be prioritised against clear criteria. Over time, this should strengthen the recovery and build investor confidence, both private and public.

The Ukrainian government is incentivized to continue implementing PIM reform as it constitutes an important pillar of the Ukraine Plan, itself part of the conditionality requirements under the EU’s Ukraine Facility. The EU accession process, and the prospect of unlocking further international funding, remains a key driver of continued reform.

Iraq: Building Stability Through Public Investment Management Reform

Iraq’s public investment system operates under acute fiscal pressure. Oil volatility drives mid‑year budget ceiling changes and stop‑start capital execution, limiting multi-year planning of projects and funding allocations. Immediate priorities of sustaining oil production have historically superseded long-term development priorities, demonstrated in the 2023–2025 federal budget.  Non‑oil investment fell by 18.2% to ~USD 24.6 billion (the core of the Ministry of Planning (MoP)’s portfolio), while oil investment rose by 28.8% to USD 15.6 billion to sustain production via international oil company service contracts.

At the same time in recent years, the Government of Iraq has pushed visible rebuilding in the face of over two decades of protracted conflict and destruction of critical infrastructure and basic service delivery mechanisms (i.e. schools, hospitals, water treatment plants), evidenced in both the National Development Plan and the Government Programme (a political equivalent of a National Development Plan).

The Government Programme has become the main strategy for public investment priorities, translating cabinet commitments into projects and reform targets that feed directly into budget negotiations and the federal budget law. It brings strategic clarity, but project selection and funding remain highly politicised: large projects can be agreed through bargaining between governing coalition partners; parliamentary committees press for constituency projects during budget rounds; and Council of Ministers’ resolutions can approve projects or grant contracting exemptions. This increases the risk that public investment decisions are driven by deliverability optics and political bargaining rather than evidence on impact, readiness, and affordability.

With less space for non‑oil investment, stronger selection, costing, and portfolio management of public investment projects are essential to protect national development priorities. Doing public investment in Iraq requires bridging the constrained fiscal space with public commitments to rebuilding while working within an environment that has normalised value extraction.

ASI’s work is grounded in an IMF‑style Public Investment Management Assessment (PIMA) to benchmark the MoP’s performance across the investment cycle, and a political economy analysis to track how decisions are made in practice through coalition bargaining within budget negotiations. These diagnostics show the core constraint is not a lack of plans, but weak links between plans, development priorities, and fiscal reality.

ASI is helping MoP strengthen project selection and appraisal to promote alignment to sectoral strategies, the Government Programme, and National Development Plan. Appraisal criteria focuses on realistic fiscal ceilings, implementation readiness, expected benefits, and delivery risks; consolidated in a user-friendly format to improve comparability of proposal submissions across ministries and governorates.

Successful planning for public investment also depends on whether decision‑makers can see which projects are progressing, stalled, and why, and use the data to inform future budget allocations. ASI found portfolio oversight is hindered by inconsistent capture of monitoring data and lack of analysis to inform future evidence‑based reallocations when fiscal conditions tighten.

ASI is supporting MoP to operationalise stronger monitoring through consistent capture of progress, delays, constraints, and financial performance. ASI is also helping MoP apply risk‑based prioritisation (high‑value, delayed, or strategically significant projects) so staff can spot early warning signs and coordinate corrective action with implementing entities.

ASI’s approach acknowledges that public investment choices sit at the intersection of political negotiation and fiscal control. Discretion can help sustain political bargains, but often at the expense of delivery and value for money. By strengthening data-driven processes within MoP’s mandate and building practical interfaces with line ministries, ASI is supporting MoP to make better decisions without assuming politics can be designed out of the system.

In practical terms, this builds a stronger route from policy to delivery: a more credible project pipeline, sharper prioritisation of limited non-oil investment, earlier identification of stalled projects and bottlenecks, and clearer links between performance and financing. Embedding these findings into routine portfolio reviews will, over time, ensure lessons learned shape future selection, budgeting, and implementation.

The cumulative impact is significant. MoP will be better equipped to consolidate national and sub-national pipelines and present a coherent, fiscally realistic portfolio to the Ministry of Finance and senior decision-makers, while civil servants gain stronger leverage in budget negotiations to advocate for evidence-based public investment decisions that the entire country will benefit from.

ASI’s Way of Working: What Makes Reform Stick

Across both Ukraine and Iraq, ASI’s approach reflects a consistent set of principles rather than a single model. We work through embedded teams and long-term local partnerships, recognising that reforms designed by outsiders rarely last unless government counterparts have real ownership of them and the capacity to carry them forward once ASI’s support ends.

This means paying close attention to the political economy, not just the formal rules. Public investment systems are shaped as much by incentives and trust as by technical design, so reform has to work with the grain of how decisions are made, not just how they’re supposed to be made on paper. That means understanding who benefits from the status quo, aligning reform with the incentives officials actually respond to, and building the coalitions needed to defend change when it’s tested.

It also means spending time in the engine room of government: balancing ambition with feasibility, iterating as contexts shift, and treating reform as a multi-year process rather than a one-off intervention. In conflict-affected settings, progress is rarely linear. What matters, ultimately, is whether local institutions and people are better equipped and sufficiently invested  to sustain better ways of working long after any single programme ends.

What This Means for Recovery and Reform

ASI’s experience in Ukraine and Iraq points to key lessons for donors and beneficiary governments.

For donors, this is a practical lesson about where recovery support has the highest multiplier effect. Investing in roads, schools, hospitals, or utilities matters, but investing in the systems that decide which roads get built, which hospitals are prioritised, and how contracts and delivery are tracked is what protects those investments over time.

Stronger public investment management helps limit stalled projects and cost overruns, improves alignment with national development priorities, and creates a clearer line of sight between financing and results.

For governments, the point is not to adopt an idealised “best practice” model overnight. It is to build a credible system that can function under political constraint and fiscal pressure, and then strengthen it incrementally.

That means practical rules for appraisal and selection, clearer decision gates, and workable monitoring that supports coordination across planning, finance, and implementing bodies.

In both Ukraine and Iraq, the direction of travel is the same: use transparency; defend prioritisation, and keep recovery programmes anchored in development impact rather than short‑term politics.

This is why ASI’s approach matters now. Recovery is accelerating in many contexts, often faster than institutional capacity can keep up. By working through embedded partnerships and iterative reform,