Sustainable development of the Ukrainian agrarian sector: perspectives and challenges

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Sustainable development of the Ukrainian economy is rather complicated, extraordinary and controversial task for Ukraine. By fulfilling the obligations assumed by the world community to implement the main provisions of sustainable development, Ukraine undergoes comprehensive structural transformations, which undoubtedly have a significant impact on the development of its agrarian sector. Administrative and territorial reform is one of the major structural changes, which is taking place at the present time and has a direct impact on the agrarian sector development. The research is aimed at deepening the methodological principles for predicting the effectiveness of new institutes and rules caused by agrarian and structural transformations in the national economy, as well as substantiating the cluster model of sustainable development of the agrarian sector.
The provision of the economic theory of “path dependence” is the methodological basis of the research. In the article, based on a combination of theoretical and empirical methods, the transformation of the state of the socio-economic system, which is conditioned by the introduction of a new rule in implementing the reforms, is researched. Under these conditions, the effect of hysteresis may arise – the new rule can fall into the institutional trap and stay in it even when perturbations often disappear.
Given the analysis of the current implementation of the sustainable development model in the agrarian sector, the authors focus on combining the efforts of management bodies, socially responsible business and rural population and substantiate the need to improve the system of functional environment, which should be based on the cluster concept of development. It is precisely the cluster structure that will ensure the effectiveness of production relations between market agents, minimize the emergence of ineffective institutions and reduce the likelihood of institutional traps in the future.

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    • Figure 1. Shaping the institutional environment taking path dependence into account
    • Figure 2. Algorithm of a new rule input
    • Figure 3. Functional model of the agrarian sector of the economy when compared to the cluster model
    • Figure 4. Cluster-based model of the agrarian sector sustainable development
    • Table 1. Main problems and causes of advisory development inhibition in the agrarian sector of the Ukrainian economy