Formation and Regulation of Institutional Dysfunctions of the Ukraine’s Transformational Economy

Abstract

The article is devoted to the analysis of historical prerequisites for the formation of current institutional dysfunctions and ways of their regulation at the current development stage of Ukraine’s economic system. The methodological basis of the proposed study is the theoretical and methodological innovations of modern institutional theory. It was established that during the transformational transition at the end of the 20th century from a command-administrative type of economic system to a market-based one, the institutional problems of the economy have highly intensified in Ukraine. The analysis of the evolutionary development of the domestic economic system proved that despite the partial effectiveness of the newly created formal framework, to a greater extent, they remained only decorative and were in the shadow of informal institutions that had a dominant position throughout the transformation period. The author systematized the key institutional factors that contributed to the formation of such institutional dysfunctions of the national economy as corruption, shadow economy, barter, «decorativeness» of reforms, etc. In the process of research, the author proved, based on the analysis of current statistical data, that the specified anomalies of the transformation period negatively affect the dynamics and nature of modern economic relations in Ukraine. Following the presented theoretical material, the author substantiated practical recommendations for the implementation of institutional reform measures aimed at countering corrupt interactions and reducing the share of shadow activities of economic agents. The author also notes that the practical measures described in the article should become structural elements of the strategy of comprehensive post-war institutional reforms of the economy of Ukraine, which should be aimed at reducing the destructive impact of institutional dysfunctions that were formed during the transformation period, to achieve macroeconomic stability, ensuring further economic growth and increase in the level of welfare of the population.