Decentralization of governance as an institutional factor of systemic transformation of economy

Yaroslav Zhalilo
Doctor of Economics, Deputy Director of National Institute for Strategic Studies, Ukraine, e-mail: zhalilo@niss.gov.ua, ORCID ID: https://orcid.org/0000-0002-8825-2880

Cite this article:

Zhalilo, Y. (2019). Decentralization of governance as an institutional factor of systemic transformation of economy. Ed. by М. I. Zvieriakov [Detsentralizatsiia vlady yak instytutsiinyi chynnyk systemnoi transformatsii ekonomiky; za red.: М. I. Zvieriakova (gol. red.) ta in.], Socio-economic research bulletin; Vìsnik socìal’no-ekonomìčnih doslìdžen’ (ISSN 2313-4569), Odessa National Economic University, Odessa, No. 1 (69), pp. 69-82.

Abstract

The research results of decentralization processes in Ukraine as a fundamental institutional change are presented in the article. On the basis of revealed peculiarities of globalization influence and Industrial Revolution 4.0 on the environment of local communities’ activity, the prerequisites for a balanced solution of the global and local dichotomy in communities’ development based on inclusiveness were established. The importance of taking into account the influence of permanent institutional crisis in Ukraine on the decentralization reform deployment is noted and the defining role of this reform in overcoming of institutional crisis is substantiated. The necessity of correcting conceptual approaches to decentralization by including the economically active population (including business representatives) among the reform target groups has been substantiated. The new opportunities, which the community has at this moment for promoting of business development on its territory, instruments, approved in world practice and available in Ukraine are investigated. The separate accent has been done on managing investments from local budgets, as well as encouraging of private business investments in community development projects on the basis of institutional instruments of externalities internalization. The conclusion about the need of significant amplification of competences and practical opportunities of communities in creating of conditions, favorable for local business, is made. The conclusion about concerning the expediency to strengthen the participative institutions of community members’ influence on the local development has been grounded. The insufficient performance of activities coordination between the participants of decentralization process, national and subnational authorities has been shown, and the ways of institutional improvement in this sphere have been suggested.

Keywords

united territorial communities; local identity; institutional crisis; public investment; institutes of development; business ecosystem.

JEL classification: E020; O430; P410; R110; R500; R580; DOI: https://doi.org/10.33987/vsed.1(69).2019.69-82

UD classification: 330.342:332.146

This work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

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