DEINDUSTRIALIZATION AND ITS DETERMINANTS IN THE WORLD AND IN UKRAINE

Abstract

The main determinants that caused deindustrialization in the world and in
Ukraine, as well as the forms and results of their manifestation in the global and national economic systems, are identified. Two approaches are used to identify these determinants.
Using the first approach (the resource one), which considers only the level of providing
the development with resources and is used by UNIDO, the nature of deindustrialization
in developed countries is analyzed. It is shown that deindustrialization is primarily due to
technological determinant and its peculiarity is the accretive social regression of society
on background of technological progress and leadership of developed countries, associated
with scientific and technological achievements of the Third and Fourth Industrial Revolutions. Among negative social consequences of these Revolutions are the withdrawal of a person from the process of economic activity and creation of a new value.
The limitations of the resource approach to identifying the determinants of
deindustrialization of economies of inversion type, which include the economy of
Ukraine, are shown. An alternative approach (institutional and structural one) is
suggested; according to this one, emergence and interdependence of the manifestation
of determinants are presented in the institutional context in terms of not only the fact
that society has resources for development, but also the level of effectiveness of its
institutional system to manage these resources. With this approach, institutional and
political, organizational and managerial, foreign economic, structural and production, financial and investment, innovation and technological and social determinants of deindustrialization in Ukraine are singled out; the logic, hierarchy, variations and results
of their interaction for economy and society are disclosed.
The main features of these determinants include: (i) a deforming the institution of
property, which caused the formation of oligarchy and the subordination of the state to its
interests; (ii) an insecurity and blurriness of property rights against the backdrop of excessive
external openness of the economy and, as a consequence, structural primitivization of
production along with growing demands for consumption and formation of a debt
consumption model in the state, business and the population; (iii) a change in the
integration vectors of the country’s development, together with the change of its industrial
specialization in foreign markets into agrarian and raw materials one; (iv) an impossibility of commercializing the socium on an innovative basis with the formation of an ineffective paternalistic system of social protection of the population. The recommendations to incorporate determinants outlined when determining the directions of the national economy development are proposed.