INCLUSIVE INDUSTRIALIZATION FOR SUSTAINABLE DEVELOPMENT: TO THE PRINCIPLES OF FORMATION THEORY AND POLICY

Abstract

Contradictory approaches to the formation of the foundations and policies of inclusive industrialization are revealed. The interdependence of inclusive development and industrialization is shown, in particular, due to the existence of the intrinsic property of industrialization to be inclusively oriented under the conditions that create the effect of “circular cumulative causation” of its deployment through structural policy instruments. Emphasis is placed on the absence of such conditions in Ukraine due to incongruent actions of the state in the economy. The significant limitations of the theory of inclusive/extractive institutions for effective industrialization are pointed out, connected with the too long for the later period of formation of inclusive institutions and their neoliberal content, a priori unsuitable for industrialization. Given the social order of limited access in Ukraine, the existing policy of straightforward borrowing of institutions from developed countries is noted, which led to increased socio-economic instability and the spread of rent-oriented organizations instead of production. Industrialization is considered as a process of structural changes that should occur with a complementary combination of structural and fundamental factors of development. Through the prism of these factors, models and experiences of industrialization and deindustrialization in the world are considered. It is shown that domestic premature deindustrialization is due to ignoring the need for such factors in economic policy, their unjustified replacement by measures of deregulation and liberalization, emphasis on the use of current competitive advantages—cheap labor and natural resources – instead of building promising, technology-based and innovative advantages. The latent “failures” of scientific-technological development from the standpoint of inclusive industrialization are critically highlighted, in particular, attention is drawn to the problems of deepening social injustice and inequality, impossibility for weak countries to form policies in their national interests market power and the growing political influence of corporations. As a result, a number of conclusions are drawn on the formation of a policy of inclusive industrialization in Ukraine.