SOCIAL PRECONDITIONS FOR ECONOMIC DEVELOPMENT OF UKRAINE

Abstract

Although social preconditions for Ukraine’s economic development are recognized as important, the overwhelming majority of publications focus on its purely economic problems (such as industrial development, innovation, efficiency, etc.).
Fundamental importance of civilizational attitudes of Ukraine’s population, its culture and social capital for economic development of Ukraine is shown.
To determine the deep content of the problem of Ukraine’s backwardness, the author turns to works on the theory of divergence of economic development of countries (by such scientists as D. North, L. Harrison, E. Helpman, E. Phelps, D. Acemoglu and J. Robinson and others) and comes to conclusions that (i) culture and institutions are interrelated; (ii) the former gives the impetus for institutions’ changes; (iii) the former determines the preconditions that can eventually radically change a society.
It is shown that “historical track” of Ukraine and endogenous informal institutions cause considerable resistance to liberal reforms. The author believes that there are three strategies to overcome resistance and engraft institutions such as European ones: (i) “hard power”; (ii) “soft power”; (iii) “persistent soft power”.
It is asserted that culture and institutions form social capital of the state and change under its influence. Effectiveness of social capital implementation is determined by dynamics of economic development of the state and quality of its citizens’ life. In the context of social capital, the author examines the “free rider problem”, the problem of trust and shadow economy and determines their state as indicators of the level of its development. The author emphasizes that for success of reforms the communicative influence on formation of a certain economic mentality and culture in society is of great importance.