Economy of Ukraine
Published since September 1958

№ 5/2021

Ekon Ukr. 2021 (5): 3–39

УДК 330.341.424 : 338.23:330.341.42

JEL: L50, O14, O33, D24, D60


1Institute for Economics and Forecasting of the NAS of Ukraine, Research ID :
OrcID ID :


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.

Keywords:inclusive development; inclusive industrialization; social order; structural policy; antisocial effects of STP.

Article original in Ukrainian (pp. 3 - 39)
The article was received by the Editorial staff on March 16 , 2021


1. Sidenko V. Global structural transformations and trends in Ukrainian economy. Part 1: Key Trends in Structural Economic Changes in the World and Ukraine. Economy and Forecasting, 2018, No. 1, pp. 37-57.

2. Gryshova I., Kyzym M., Khaustova V., Korneev V., Kramarev H. Assessment of the Industrial Structure and its Influence on Sustainable Economic Development and Quality of Life of the Population of Different World Countries. Sustainability, No. 12, 2072, available at:

3. Industry of Ukraine 2014-2016: Untapped Opportunities, Ways of Restoration, Modernization and Modern Development. O.I. Amosha, I.P. Buleev, Yu.S. Zaloznova (Eds.). Institute of Industrial Economics of the NAS of Ukraine, Kyiv, 2017 [in Ukrainian].

4. Korablin S. Macroeconomic Dynamics of Ukraine: A Trap of Raw Material Markets. Institute for Economics and Forecasting of the NAS of Ukraine, Kyiv, 2017 [in Ukrainian].

5. Lyashenko V., Kotov Ye. Ukraine XXI: Neo-Industrial State or "Project Collapse"? Institute of Industrial Economics of the NAS of Ukraine, Kyiv, 2015 [in Ukrainian].

6. Myrdal G. Economic Theory and Under-Developed Regions. London, Gerald Duckworth & Co., Ltd, 1957.

7. Rodrik D. Industrial policy for the twenty-first century. CEPR Discussion Paper, 2004, No. 4767.

8. Deaton A. The Great Escape: Health, Wealth, And the Origins of Inequality. Moscow, Publisher of Gaidar Institute, 2016 [in Russian].

9. Acemoglu D., Robinson J. Why Nations Fail: The Origins of Power, Prosperity, and Poverty. Moscow, AST, 2015 [in Russian].

10. Polterovich V. Towards a general theory of socio-economic development. Part 1. Geography, institutions, or culture? Voprosy Ekonomiki, 2018, No. 11, pp. 5-26 [in Russian].

11. Stiglitz J.E. After Neoliberalism. Project Syndicate, available at:

12. North D., Wallis J., Webb S., Weingast B. In the Shadow of Violence: Lessons for Limited Access Societies. Voprosy Ekonomiki, 2012, No. 3, pp. 4-31 [in Russian].

13. North D., Wallis J., Weingast B. Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History. Moscow, Publisher of Gaidar Institute, 2011 [in Russian].

14. McMillan M., Rodrik D., Sepulveda C. Structural change, fundamentals and growth: A framework and case studies. International Food Policy Research Institute, Washington, D.C., 2017.

15. Warwick K. Beyond industrial policy: Emerging issues and new trends. OECD Science, Technology and Industry Policy Papers, 2013, No. 2.

16. Simachev Yu., Akindinova N., Yakovlev A. et al. Industrial policy in Russia: New conditions and possible agenda (The report of NRU HSE). Voprosy Ekonomiki, 2018, No. 6, pp. 5-28 [in Russian].

17. Kuznets S. Modern economic growth: Findings and reflections. American Economic Review, 1973, Vol. 63, No. 3, pp. 247-258.

18. Lin J.Yi. New structural economics: a framework for rethinking development. The World Bank, Washington, 2012.

19. Rodrik D. Growth strategies. NBER Working Paper 10050, 2003, available at:

20. Lee J., Bae Z.T., Choi D.K. Technology development processes: A model for a developing country with a global perspective. Research and Development Management, 1988, No. 18 (3), pp. 235-250.

21. Wade R.H. The American paradox: ideology of free markets and the hidden practice of directional thrust. Cambridge Journal of Economics, 2017, Vol. 41, Iss. 3, pp. 859-880.

22. Mazzucato M. The Entrepreneurial States. Debunking Public vs. Private Sector Myths. London, Anthem Press, 2013.

23. Block F. Swimming against the current: The rise of the hidden developmental state in the United States. Politics and Society, 2008, No. 36 (2), pp. 169-206.

24. Hart D.M., Ezell S.J., Atkinson R.D. Why America needs a national network for manufacturing innovation. The Information Technology & Innovation Foundation, Washington, DC, 2012, available at:

25. Sperling G. The case for a manufacturing renaissance. Remarks at the Brookings Institution. July 25, 2013, available at:

26. Vasiliev V., Sokolov M. Tax Reforms of R. Reagan and D. Trump: Evolution of Priorities. USA & Canada: ekonomika, politika, kultura, 2018, No. 8, pp. 5-25 [in Russian].

27. Salikhova O. Germany's industrial leadership: view of the role of the state in the historical and economic aspect. History of Economics and Economic Thought of Ukraine, 2020, Iss. 53, pp. 189-221 [in Ukrainian].

28. Rushchenko I. From "criminal revolution" to "criminal society." Sociology: Theory, Methods, Marketing, 2014, No. 2, pp. 3-22 [in Ukrainian].

29. Dubov D., Koretska I. "In the Interests of Another State...": Problems of Detection and Counteraction to Agents of Influence. National Institute for Strategic Studies, Kyiv, 2018 [in Ukrainian].

30. Borysenko Z. Why Zelensky should not sign the law on support of significant investments. Mirror Weekly, February 2, 2021, available at: [in Ukrainian].

31. Kysilevsky D. Localization the American way. How the US uses public procurement to protect its producers. Mirror Weekly, February 5, 2021, available at: [in Ukrainian].

32. Rethinking capitalism: economics and policy for sustainable and inclusive growth. M. Jacobs, M. Mazzucato (Eds.). Oxford, Wiley-Blackwell, 2016.

33. Stiglitz J. The Great Divide: Unequal Societies and What We Can Do About Them. Moscow, Eksmo, 2016 [in Russian].

34. Lуpchuk V. NEET - A new socio-economic fact. Economy of Ukraine, 2020, No. 1, pp. 56-67 [in Ukrainian].

35. Kapeliushnikov R. Is technological change a devourer of jobs? Voprosy Ekonomiki, 2017, No. 11, pp. 111-140 [in Russian].

36. Acemoglu D., Restrepo P. Automation and new tasks: how technology displaces and reinstates labor. NBER Working Paper 25684, 2019, available at:

37. Rodrik D. Technology for All. Project Syndicate, March 6, 2020, available at: [in Russian].

38. Barton B., Manyika J., Koller T. et al. Measuring the economic impact of short-termism Discussion Paper, McKinsey Global Institute, February, 2017.

39. Tirole J. Market Failures and Public Policy. Prizes Lecture, December 8, 2014, available at:

40. Rodrik D. Trade Strategy, Development, and the Future of the Global Trade Regime, in: Meeting Globalization's Challenges: Policies to Make Trade Work for All. L. Catão, M. Obstfeld (Eds.). Princeton, Princeton University Press. 2019, pp. 69-76.

41. Rodrik D. New Technologies, Global Value Chains and Developing Economies. NBER Working Paper 25164, 2018, available at:

42. Lazonick W., O'Sullivan M. Maximizing shareholder value: A new ideology for corporate governance. Economy and Society, 2000, No. 29 (1), pp. 13-35.

43. Kindzers'kyi Yu. Anti-crisis industrial policy: version of domestic concept. Visnyk of the NAS of Ukraine, 2016, No. 10, pp. 27-42 [in Ukrainian].

44. Mattauch L., Klenert D., Stiglitz J.E., Edenhofer O. Overcoming Wealth Inequality by Capital Taxes that Finance Public Investment. NBER Working Paper 25126, 2018, available at: