INSTITUTIONAL PLATFORMS OF THE TRANSFORMATION OF THE ECONOMY

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Abstract

Institutional transformations in economies of countries are considered as the basis of their civilizational development. The concept was put forward that in order to ensure transformations in the economy, it is necessary to promote the formation of a specific set of institutional platforms – new institutes and institutions that will create an environment for the formation and development of a socially oriented market economic system of society. The main controversial components of the institutional platform include: institutional changes in the economy, the creation of the corporate sector, the development of human capital institutions. The purpose of the paper. The purpose of the study is to promote and reveal the essence of the formation of institutional platforms to ensure reforms of various components of a transformational economy. Methodology. Formation of institutional platforms of the transformational economy is investigated on the basis of the theory of institutional changes and such institutions of a market economy as property rights, the corporate sector, and human capital. Results. Institutional platforms of transformations are presented as continuous informal changes that are fixed in the formal institutional system of society in the form of legal acts, codes of conduct, and institutions designed to enforce them. It is substantiated that in order to ensure institutional transformations in the economy, it is necessary to form a dynamic institutional platform that determines the system of basic institutions. The process of formation and effective use of the institute of human capital is analysed, which becomes a priority for the economic development of the country’s potential. The presence of mature human capital predetermines the country’s economic potential and its strategic growth. The main content of the new economy is that human capital turns from a resource to the essence of development itself. An approach to developing an institutional platform for the development of human capital as a process of natural accumulation or the forced introduction of basic institutions capable of ensuring the emergence of new institutions or significantly modernizing existing rules is proposed. It is proved that transnational capital erases economic, political, and cultural national differences, forms a favourable global infrastructure, ensures the development of countries that define the basis of the world corporate economy. It is substantiated that, institutionally, a corporation creates a new type of economic relations, which are reflected in the rules and code of corporate behaviour. Institutional analysis created the conditions for developing a new approach to designing the trajectory of the development of the national economy on the grounds that the formation of a certain institutional system determines the trajectory of the further development of the state and world economy. Practical implications. Theoretical research should be the foundation of state policy in the management of the process of creating formal institutions as the basis of an institutional platform. This requires certain clarifications regarding the possible gap between the rules declared by the legislation and the mechanism for ensuring their observance, the basis for further research. Value/originality. The theoretical study is carried out personally by the authors of this scientific article.

How to Cite

Tkach, A., Kolomiiets, V., & Radieva, M. (2019). INSTITUTIONAL PLATFORMS OF THE TRANSFORMATION OF THE ECONOMY. Baltic Journal of Economic Studies, 5(2), 226-233. https://doi.org/10.30525/2256-0742/2019-5-2-226-233
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Keywords

institutes, institutions, institutional transformations, institutional platform, corporate sector, human capital

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