STATE AND LAW IN THE CONTEXT OF ECONOMIC TRANSFORMATION: CHALLENGES OF THE TRANSITIONAL PERIOD

Abstract

The article provides a thorough analysis of the economic transformation of the state and law during a period of transition. It reveals the transitional period to be a regular stage of societal development combining political, legal and economic changes. The article emphasises that, for Ukraine and other post-socialist states, transition is multidimensional, involving a shift from a centralised planned economy to a market economy, from an authoritarian model to a democratic system, and from an industrial society to an information society. In the politico-legal dimension, the study examines the adaptation of institutions to the conditions of martial law, restrictions on constitutional rights, and the need to ensure a balance between security and democracy. In the economic dimension, the dynamics of wartime transformation are outlined, including a sharp decline in GDP in 2022, stabilisation measures by the government and the National Bank, the introduction of a simplified tax regime, and support for business under wartime conditions. The article concludes that the success of economic transformation directly depends on the effectiveness of the legal system and state institutions. The Ukrainian experience offers a distinctive illustration of a tripartite combination of the struggle for statehood, modernisation of the legal system, and economic renewal, thus constituting a valuable exemplar for the international community. The subject of the research is the processes of economic transformation of the state and law under conditions of transition, in particular the interrelationship between politico-legal reforms and economic changes in Ukraine during 2022-2025, determined by the war, post-war reconstruction, and integration into the European Union. The research methodology employed is founded upon the utilisation of both general scientific and special legal methods. The dialectical method was employed to elucidate the essence of transitional processes in the state and law, and to identify their interrelation with economic transformations. The comparative-legal method was utilised to analyse the experience of post-socialist and European states that underwent a similar transitional path. The systemic-structural method made it possible to examine the state, law and economy as interconnected elements of a single social mechanism, in which changes in one sphere predetermine transformations in the others. The article aims to conduct a comprehensive study of the peculiarities of state and legal transformation during periods of transition. It seeks to identify the interrelationship between political and legal reforms and economic changes in Ukraine between 2022 and 2025. Finally, it aims to determine strategic guidelines for post-war reconstruction and European integration. Research results. The study establishes that Ukraine's transitional period is multidimensional, characterised by simultaneous changes in the political, legal and economic spheres. It shows that the legal system has become more adaptable under wartime conditions. The research confirms that the success of economic transformation hinges on the effectiveness of state institutions and the rule of law, as well as the capacity to strike a balance between security requirements during wartime and democratic principles. Conclusions. The study makes it possible to draw several key general conclusions. Ukraine’s transitional period remains inherently multidimensional: economic transformations are closely intertwined with political, legal, and institutional reforms. The legal system has demonstrated a notable capacity for adaptation; even under conditions of martial law, state institutions continued to function, while legislation was adopted to protect human rights, counter collaborationism, strengthen anti-corruption measures, and advance judicial reform. The economy experienced a profound crisis; however, sustained international support combined with domestic reform efforts enabled a degree of stabilisation and gradual recovery. Progress in European integration, including the implementation of visa-free regimes and alignment with EU membership criteria, has further highlighted the strong interdependence between economic policy and legal transformation. Finally, the social dimension of the transition—encompassing demographic losses, the return of displaced persons, and the reintegration of veterans—has generated new demands on state policy. Addressing these challenges is essential to ensuring long-term sustainable development and social stability. Ukraine's experience of 2022–2025 demonstrates that, even in extraordinary circumstances, it is feasible to implement reforms, amalgamate wartime mobilisation with democratic transformations, and establish the foundations for future economic and legal advancement. Consequently, the period of transition for Ukraine represents not only a challenge, but also a significant opportunity. The convergence of economic transformation and legal modernisation is laying the foundation for the establishment of a sustainable European state, grounded in the principles of the rule of law, democracy, and a competitive market economy.