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Industrial development in decentralized conditions: experience of leading industrial countries and conclusions for Ukraine

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  • I. Shovkun

Abstract

The article deals with the issues of industrial development in the conditions of decentralization of power and economic authorities of the state, which has been launched in Ukraine. Since the problem of the deindustrialization of the national economy remains very acute, this study presents the tools and instruments to address it, which has a policy of decentralization in its arsenal. The purpose of this work is to reveal the content of decentralization, generalize the ap-proaches to ensuring economic growth and increasing public welfare on the basis of regional industrial development, as well as on the substantiation of the feasibility of their use in Ukraine. The author highlights various essential aspects of decentralization and reveals the nature of its influence on the investment climate. Generalized the approaches to decentralization of state powers and finding effective forms of regional socio-economic development on an industrial basis, on the examples of countries-leaders in the world industrial-technological sphere. Justified the expediency of deepening decentralization and industrial development in order to strengthen the economic capacity of Ukrainian regions. The author constructs various econometric models to show the presence of a long-term statistically significant influence of industrial business and budget decentralization on the welfare of national population (2001-2016). A cluster analysis was carried out that confirmed the existence of the impact of fiscal decentralization and the development of production business (including industrial and agricultural) on the welfare in the country's aggregate regions. Also, it allowed to determine the priority of the processing industry in comparison with other types of production in ensuring the prosperity of the regional population. It is shown that the key to improving the condition of regional economy should be the development of a new industrial sector based on the technologies of the Industry 4.0 in line with the strategy of development of the country's industrial complex.

Suggested Citation

  • I. Shovkun, 2018. "Industrial development in decentralized conditions: experience of leading industrial countries and conclusions for Ukraine," Economy and Forecasting, Valeriy Heyets, issue 4, pages 38-64.
  • Handle: RePEc:eip:journl:y:2018:i:4:p:38-64
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    File URL: http://eip.org.ua/docs/EP_18_4_38_uk.pdf
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    References listed on IDEAS

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    1. Jorge Martínez Vázquez & Robert M. McNab, 2006. "Fiscal decentralization, macrostability and growth," Hacienda Pública Española, IEF, vol. 179(4), pages 25-49, September.
    2. Robin Boadway & Sean Dougherty, 2018. "Decentralisation in a Globalised World: Consequences and Opportunities," OECD Working Papers on Fiscal Federalism 21, OECD Publishing.
    3. Qiao, Baoyun & Martinez-Vazquez, Jorge & Xu, Yongsheng, 2008. "The tradeoff between growth and equity in decentralization policy: China's experience," Journal of Development Economics, Elsevier, vol. 86(1), pages 112-128, April.
    4. Aslim, Erkmen Giray & Neyapti, Bilin, 2017. "Optimal fiscal decentralization: Redistribution and welfare implications," Economic Modelling, Elsevier, vol. 61(C), pages 224-234.
    5. Chenggang Xu, 2011. "The Fundamental Institutions of China's Reforms and Development," Journal of Economic Literature, American Economic Association, vol. 49(4), pages 1076-1151, December.
    6. Chunli Shen & Jing Jin & Heng-fu Zou, 2012. "Fiscal Decentralization in China: History, Impact, Challenges and Next Steps," Annals of Economics and Finance, Society for AEF, vol. 13(1), pages 1-51, May.
    7. Anping Chen & Nicolaas Groenewold, 2013. "The national and regional effects of fiscal decentralisation in China," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 51(3), pages 731-760, December.
    8. Nasir Iqbal & Musleh Ud Din & Ejaz Ghani, 2012. "Fiscal Decentralisation and Economic Growth: Role of Democratic Institutions," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 51(3), pages 173-195.
    9. Thushyanthan Baskaran & Lars P. Feld & Jan Schnellenbach, 2016. "Fiscal Federalism, Decentralization, And Economic Growth: A Meta-Analysis," Economic Inquiry, Western Economic Association International, vol. 54(3), pages 1445-1463, July.
    10. Russell S. Sobel & Nabamita Dutta & Sanjukta Roy, 2014. "Does fiscal decentralization result in a better business climate?," Chapters,in: Entrepreneurial Action, Public Policy, and Economic Outcomes, chapter 9, pages 151-176 Edward Elgar Publishing.
    11. Akai, Nobuo & Sakata, Masayo, 2002. "Fiscal decentralization contributes to economic growth: evidence from state-level cross-section data for the United States," Journal of Urban Economics, Elsevier, vol. 52(1), pages 93-108, July.
    12. repec:gam:jecomi:v:6:y:2018:i:1:p:8-:d:129749 is not listed on IDEAS
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