From Digitalization to Developmental Strategy: Digital Growth Coalition in Ukraine’s European Integration

The empirical aim of this paper is to explain the transformation of Ukraine’s state digitalization agenda into a broader economic development strategy, driven by the partially EU-funded development of local state digital capacities (Diia app, BankID, Prozorro, Vulyk) and the organizational empowerment of executive actors responsible for steering this policy course, most notably the Ministry of Digital Transformation. Building on this capacity accumulation, these actors subsequently sought to expand their mandate through the creation of a dedicated regulatory toolbox—Diia City—designed to support the domestic IT industry. The core theoretical argument advanced in this paper is that EU-induced enhancement of state capacities empowers local actors to create policy frameworks that supplement liberalized economic integration with the EU with more forward-looking developmental strategies (Vukov 2020, 2025). Rather than remaining confined to compliance-oriented integration, strengthened administrative and organizational capacities enable domestic actors to pursue selective, sector-specific developmental interventions. Empirically and theoretically, the study contributes to the literature on the correspondence between EU integration and local development (Bruszt and McDermott 2012; Bruszt and Langbein 2017, 2020, 2025; Thiemann et al. 2025), on economic interest coalitions as key drivers of policy change and developmental outcomes (Langbein and Wolczuk 2012; Langbein and Börzel 2013; Bruszt and Karas 2020; Langbein et al. 2024), and on the role of the state as a mediator between integration, development, and local interests (Bruszt and Vukov 2017; Bruszt et al. 2020). Drawing on the analysis of policy documents, media reports, interest-group materials, and interviews, the paper provides a process-tracing analysis of three stages in the formation of a Ukrainian digital growth coalition: (1) targeted sectoral e-governance reforms (2014–2018) focused on the digitalization of public procurement, state registries, and court-related information; (2) coordinated comprehensive digitalization (2018–2021), marked by the creation of a “state in a smartphone” through the aggregation of prior initiatives into the Diia app; and (3) dynamic sandboxing (since 2021), involving the establishment of the Diia City regulatory sandbox for IT-sector development and the translation of this experience into targeted support instruments for other sectors, including miltech.