SUSTAINABLE AI INTEGRATION IN LOCAL GOVERNANCE: HUMAN RIGHTS, ECONOMIC SUSTAINABILITY AND OVERCOMING DONOR DEPENDENCY

Abstract

This article examines the interaction between artificial intelligence (AI) governance, donor dependency, human rights protection and economic sustainability in Ukrainian local self-government. The research employs doctrinal analysis, an institutional approach, a comparative legal methodology and an exploration of EU regulatory and policy documents concerning AI governance and digital transformation. Although donor-supported AI initiatives have generated important short-term benefits for local self-government bodies, crisis management and public services, many projects remain institutionally fragile and economically unsustainable once external funding cycles expire. The study shows that excessive reliance on donor financing can lead to a 'donor dependency trap', characterised by fragmented digital infrastructure, insufficient local administrative capacity, weak institutional integration and limited long-term financial sustainability. Meanwhile, the rapid introduction of AI technologies in local self-government raises serious human rights issues, especially concerning privacy protection, algorithmic discrimination, the transparency of automated decision-making processes, and the lack of effective oversight and appeal mechanisms. The article argues that the sustainable integration of AI in local self-government should not be viewed merely as a technological modernisation process, but as a broader constitutional and institutional transformation that complies with European standards of trustworthy AI governance. This requires stable domestic financing mechanisms, transparent procurement procedures, meaningful human oversight, unified interoperability standards and comprehensive legal safeguards that are consistent with the EU Artificial Intelligence Act and broader European human rights principles. The study concludes that Ukraine’s successful European integration and post-war reconstruction depend not only on accelerating digital innovation, but also on embedding AI technologies within sustainable democratic, legal and economic institutions that can ensure long-term resilience, accountability and the protection of human rights.