Social capital in Ukraine's economic transformation
Today, Ukraine has no alternative but to take a path of innovative changes as a necessary step for enhancing the competitiveness of the national economy. Against a backdrop of fierce global competition, restricted financial resources and geopolitical tensions, social capital is assuming particular i...
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Iнститут соціології НАН України
2017
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irk-123456789-1820722021-12-12T01:25:57Z Social capital in Ukraine's economic transformation Piddubny, V. Chepurco, G. Статьи Today, Ukraine has no alternative but to take a path of innovative changes as a necessary step for enhancing the competitiveness of the national economy. Against a backdrop of fierce global competition, restricted financial resources and geopolitical tensions, social capital is assuming particular importance. Though being an intangible asset of the society, it is helpful in searching for promising economic management models. The phenomenon of social capital also reveals itself under extreme conditions, as it was during the Revolution of Dignity in 2013-2014 when lots of Ukrain ians were participating in numerous civic initiatives and defending public interests at various stages of social organisation within an innovative economic transformation. The authors draw attention to the new socio-economic environment which in a certain way spurs innovative development of the national economy, thereby facilitating Ukraine’s integration into the European Union. 2017 Article Social capital in Ukraine's economic transformation / V. Piddubny, G. Chepurco // Социология: теория, методы, маркетинг. — 2017. — № 1. — С. 188-197. — англ. 1563-4426 http://dspace.nbuv.gov.ua/handle/123456789/182072 316.3 en Социология: теория, методы, маркетинг Iнститут соціології НАН України |
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Статьи Статьи Piddubny, V. Chepurco, G. Social capital in Ukraine's economic transformation Социология: теория, методы, маркетинг |
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Today, Ukraine has no alternative but to take a path of innovative changes as a necessary step for enhancing the competitiveness of the national economy. Against a backdrop of fierce global competition, restricted financial resources and geopolitical tensions, social capital is assuming particular importance. Though being an intangible asset of the society, it is helpful in searching for promising economic management models. The phenomenon of social capital also reveals itself under extreme conditions, as it was during the Revolution of Dignity in 2013-2014 when lots of Ukrain ians were participating in numerous civic initiatives and defending public interests at various stages of social organisation within an innovative economic transformation. The authors draw attention to the new socio-economic environment which in a certain way spurs innovative development of the national economy, thereby facilitating Ukraine’s integration into the European Union. |
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Piddubny, V. Chepurco, G. |
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Piddubny, V. Chepurco, G. |
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Social capital in Ukraine's economic transformation |
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Social capital in Ukraine's economic transformation |
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Social capital in Ukraine's economic transformation |
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Social capital in Ukraine's economic transformation |
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Social capital in Ukraine's economic transformation |
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social capital in ukraine's economic transformation |
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Iнститут соціології НАН України |
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2017 |
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Social capital in Ukraine's economic transformation / V. Piddubny, G. Chepurco // Социология: теория, методы, маркетинг. — 2017. — № 1. — С. 188-197. — англ. |
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Социология: теория, методы, маркетинг |
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Volodymyr Piddubnyi, Gulbarshyn Chepurko
Social capital in Ukraine’s economic transformation
VOLODYMYR PIDDUBNYI, UDC 316.3
PhD in Phi los o phy, Se nior Re search Fel low of
the So cial Ex per tise De part ment, In sti tute of So -
ci ol ogy of the Na tional Acad emy of Sci ences of
Ukraine
GULBARSHYN CHEPURKO,
Doc tor of Sci ences in So ci ol ogy, Lead ing Re -
search Fel low of the So cial Ex per tise De part -
ment, In sti tute of So ci ol ogy of the Na tional Acad -
emy of Sci ences of Ukraine
Social capital in Ukraine’s economic
transformation
Abstract
Today, Ukraine has no alternative but to take a path of innovative changes as a
necessary step for enhancing the competitiveness of the national economy. Against a
backdrop of fierce global competition, restricted financial resources and geopolitical
tensions, social capital is assuming particular importance. Though being an intangible
asset of the society, it is helpful in searching for promising economic management
models. The phenomenon of social capital also reveals itself under extreme conditions,
as it was during the Revolution of Dignity in 2013–2014 when lots of Ukrainians were
participating in numerous civic initiatives and defending public interests at various
stages of social organisation within an innovative economic transformation. The
authors draw attention to the new socio-economic environment which in a certain way
spurs innovative development of the national economy, thereby facilitating Ukraine’s
integration into the European Union.
Keywords: innovative economic transformation, social capital, the Revolution of
Dignity
In tro duc tion
Suc cess ful im ple men ta tion of the re forms in Ukraine needs an ap pro pri ate
so cial ba sis that will en sure the ir re vers ibil ity of the key changes. So ci ol o gists, in
188 Со ци о ло гия: те о рия, ме то ды, мар ке тинг, 2017, 1
their turn, are charged with the im por tant task of iden ti fy ing and en gag ing the
fac tors that strengthen the so cial ba sis of eco nomic re forms and ac cel er ate the
eco nomic trans for ma tion.
There are sev eral types of state in volve ment in the econ omy. A so cial ist sys -
tem is based on a planned (com mand) econ omy char ac ter ised by state own er ship
of the means of pro duc tion: the cen tral gov ern ment reg u lates the prices and takes
all de ci sions on the pro duc tion, con sump tion and dis tri bu tion of goods and ser -
vices. Eco nomic lib er al ism re lies on the use of mar ket reg u la tors and (to a cer tain
de gree) gov ern ment pol i cies, but the state’s in flu ence on eco nomic ac tiv ity is re -
duced to a min i mum. A mixed eco nomic sys tem pro vides for a free-mar ket econ -
omy along with a con sid er able role of the state in so cio eco nomic de vel op ment by
us ing ad min is tra tive linch pins; be sides, it al lows the pub lic sec tor to make a sig -
nif i cant con tri bu tion to the econ omy.
The ex pe di ency of de vel op ing a par tic u lar model of eco nomic reg u la tion is
de ter mined by its struc ture and pos si ble out comes of in dus trial mod erni sa tion,
the so ci ety’s ori en ta tion to wards a cer tain eco nomic for ma tion, as well as by the
will ing ness of cit i zens to adapt to the im pacts of trans for ma tion [Reznik, 2015].
The need for the gov ern ment to in ter fere in the econ omy emerges when the
mar ket fails to en sure proper de vel op ment of in dus try and so cial in fra struc ture
or fa cil i tate in no va tions. That is a nec es sary mea sure to stim u late com pe ti tion
and pre vent mo nop o lies. How ever, im ple ment ing in no va tive re forms in over-
reg u lated econ o mies (like Ukraine) re quires eco nomic liberalisation and rais ing
the level of trust in the state.
In tur bu lent times, Ukraine needs a new type of in no va tive sys temic de vel -
op ment that will mark the be gin ning of a real in no va tive mod erni sa tion strat egy.
An in no va tive mod erni sa tion is un der stood as a rad i cal tech no log i cal, eco nomic,
socio-po lit i cal and cul tural up grade of to day’s so ci ety, which pro vides for ad -
vanc ing de vel op ment rather than catch-up growth. The main task of Ukraine’s
mod erni sa tion con sists in cre at ing a new kind of so ci ety, so cial in sti tu tions, in -
fra struc ture and cit i zens that will meet the de mands of globalisation. The prin ci -
pal goal of mod erni sa tion is to boost the global competitiveness of Ukraine as a
state and Ukrainians as a nation.
It should also be noted that, in the con text of global chal lenges, both
geopolitical and geo-eco nomic pro jects, in clud ing Ukraine’s civilisational
choice, will be suc cess ful only if they are based on the prin ci ples of de vel op ment,
so cial sol i dar ity and public trust.
1. The o ret i cal frame work
A dis tinc tive fea ture of an un sta ble so ci ety is an “in di vidu al ised” in flu ence of
ob jec tive fac tors, a pre dom i nance of mi cro-so cial de pend en cies re gard ing per -
sonal de ci sions and choices. In deed, in terms of a usual value sys tem de struc tion,
a per son’s so cio eco nomic at ti tudes are not formed through ad ap ta tion to their
so cial roles and sta tuses but based on the in di vid ual pref er ences. The per son’s ex -
pe ri ence of in ter act ing with the key eco nomic in sti tu tions which sustain con sid -
er able changes is also considered.
Ana lys ing the so cial world as an ac cu mu la tion of hu man ex pe ri ences, par tic -
u lar at ten tion should be paid to the cap i tal phe nom e non. Hav ing a po ten tial ca -
Со ци о ло гия: те о рия, ме то ды, мар ке тинг, 2017, 1 189
Social capital in Ukraine’s economic transformation
pac ity to pro duce prof its and re pro duce it self in the same or ex panded form, it
con tains a ten dency to wards sta bil ity. Dif fer ent types of cap i tal dis tri bu tion rep -
re sent the in her ent struc ture of the so cial world. It is a set of pos si bil i ties, con di -
tions and prac tices in scribed in the very re al ity of this world, de ter min ing its suc -
cess ful func tion ing and re cog nis ing the eco nomic cap i tal pri or ity, which is con -
verted into money and institutionalised in the form of property rights.
The au thors draw at ten tion to the fact that the ef fi cient func tion ing of an
econ omy is as so ci ated with the char ac ter is tic known as “so cial”. In other words,
that is a mu tual, per me at ing re la tion ship and rec i proc ity of hu man ac tiv i ties. It
can be in ter preted as “trust” us ing such con cepts as “rec i proc ity”, “so cial net -
works”, “in te gra tion” and “re spon si bil ity”. These con cepts con sti tute so cial cap i -
tal as ac tual and po ten tial re sources as so ci ated with the in ter ac tions be tween dif -
fer ent fac tors and dif fer ent actors, as well as the efficiency of economic processes.
So cial cap i tal is quite a com plex phe nom e non. De ter min ing eco nomic
growth and de vel op ment of dem o cratic val ues and norms, it also com prises net -
works of more or less in sti tu tion al ised re la tion ships that dem on strate rec og ni -
tion, cred i bil ity, rat ing, sta tus, etc. The worth of so cial cap i tal as a pub lic re source
is pri mar ily in the con ver gence of so cial and eco nomic com po nents of hu man so -
ci ety, which is a ten dency of and pre req ui site for bal anced de vel op ment of the so -
cial world. The main fea ture of so cial cap i tal is de ter mined by in cor po real na ture
of the sys tem of so cial in ter ac tion: it is ac cu mu lated in the struc ture of re la tions
be tween ac tors, de scrib ing a cer tain hi er ar chy of re la tion ships upon mu tu ally
agreed terms. These re la tion ships en sure the bal ance of in ter ests; they are mu tu -
ally ben e fi cial both to so cial and eco nomic ac tors and to the whole so ci ety (due to
in creas ing economic, social and organisational resources and thereby converting
the social capital into economic).
So cial cap i tal plays a cru cial role in the so ci ety’s de vel op ment: it di rectly in -
flu ences the na ture of so cial re la tion ships, pro vid ing pos i tive change in so cio eco -
nomic and socio-po lit i cal life due to in ter ac tion be tween in di vid u als, groups, cor -
po ra tions and in sti tu tions. So cial cap i tal re veals it self through co or di nated ac -
tions in di verse so cial pro cesses that en hance en tre pre neur ial and busi ness
productivity, thereby contributing to economic growth.
The au thors ex am ine so cially in no va tive strat e gies of eco nomic ac tors in
terms of var i ous pos si bil i ties of us ing so cial net works to pub lish, share and store
in for ma tion, cre ate a pos i tive im age and to save time as well. Some for eign re -
search ers, e. g., Fabio Sabatini, stud ied the in flu ence of dif fer ent com po nents of
so cial cap i tal gen er ated by dif fer ent types of in ter per sonal net works on the so ci -
ety’s eco nomic de vel op ment and then they sys tema tised the indicators of this
influence [Sabatini, 2009].
One of the ben e fits of so cial cap i tal is the hor i zon tal ties be tween in di vid u als
or groups “uni fied” on a cer tain ba sis. They serve as a tool for spread ing use ful in -
for ma tion, build ing trust, pro mot ing busi ness and eco nomic growth. This type of
cap i tal can be mea sured us ing such in di ca tors as fre quency of meet ings with
friends, col leagues, business partners, etc.
“Bridg ing” so cial cap i tal re fers to the re la tion ship of par tic i pa tion in groups,
aimed at achiev ing po lit i cal or fi nan cial goals. It is mea sured us ing “Putnam’s
toolkit” for civil so ci ety anal y sis Ї through the den sity of vol un tary as so ci a tions
and the de gree of mem bers’ in volve ment in these associations.
190 Со ци о ло гия: те о рия, ме то ды, мар ке тинг, 2017, 1
Volodymyr Piddubnyi, Gulbarshyn Chepurko
“Cor po rate” so cial cap i tal is con cen trated in the net work of pro fes sional or -
gani sa tions, which are mainly fi nance as so ci a tions, busi ness structures, etc.
Us ing the con cept of so cial sol i dar ity as a model of so cial prog ress, it is pos si -
ble to as sume that a case in point is an ef fec tive so cio eco nomic en vi ron ment pro -
duced due to con tin u ous so cial par tic i pa tion, which in turn en sures har mo nised
in ter ac tion be tween new and tra di tional so cial ac tiv i ties, as well as con sis tency
be tween the eco nomic processes within the social partnership.
One of the main el e ments of so cial cap i tal is trust, in clud ing that for busi ness
and eco nomic re la tion ships. Ac cord ing to James Coleman, trust serves as a ba sis
for ef fi cient func tion ing of eco nomic in sti tu tions [Coleman, 2001].
Pi erre Bourdieu de scribed trust as a so cial or sym bolic cap i tal [Bourdieu,
2003: p. 233], which helps peo ple make deals pro vided that they have built a rep -
u ta tion for be ing hon est and es tab lished their busi ness cred i bil ity. It is highly rated
in the mar ket: peo ple can en joy cer tain ad van tages by us ing the power of trust
and so cial con nec tions, re gard less of whether they have money at that mo ment or
not. Af ter all, trust is closely re lated to mu tual aid, neigh bour hood and part ner -
ship, i. e. acts as a uni fier and activator for economic relationships.
Fran cis Fukuyama sees so cial cap i tal as a cer tain po ten tial of a so ci ety or its
part, which arises ow ing to trust among its mem bers [Fukuyama, 2004: p. 22].
Com pet i tive ness, in no va tive de vel op ment and eco nomic pros per ity of the coun -
try, as well as stan dard and qual ity of life of its cit i zens, de pend on the level of
trust in her ent in the so ci ety. Low-trust so ci et ies have fewer pros pects for suc -
cess ful de vel op ment and tran si tion to a knowl edge-based econ omy com pared to
high-trust ones. They are likely to miss the op por tu ni ties that an innovative
transformation offers.
In Fukuyama’s opin ion, trust in her ent in the work place and in in dus trial re -
la tions as a whole al lows com pa nies to re duce pro duc tion costs and there fore to
con trib ute to the eco nomic growth of their coun try (as well as to in no va tions). If
peo ple who work to gether in the same com pany trust each other (as long as they ad -
here to the same eth i cal stan dards), man u fac tur ing costs will def i nitely lower. A so -
ci ety where peo ple trust each other has more op por tu ni ties to in tro duce new forms of
work or gani sa tion since the high level of trust fa cil i tates di verse so cial con tacts
[Fukuyama, 2004: p. 23]. In other words, trust in the work place not only helps the
com pany save re sources but also fa cil i tates social is ing and cre ates a ba sis for em -
ploy ees’ will ing ness to en gage in in no va tive prac tices — al though they are con -
sid ered eco nom i cally risky. At the same time, a trust ing work en vi ron ment where
the staff are at ten tive and re spect ful to each other is a favourable factor for
generating innovative ideas and putting them into practice.
Fukuyama be lieves that if work ing re la tion ships are based on trust as an
over rid ing hu man vir tue, the com pany can quickly adapt to new cir cum stances.
The peo ple who trust each other and are able to work to gether can eas ily cope
with changes and as sume any form of or gani sa tion that is con ve nient for them
[Fukuyama, 2004: p. 23]. There fore, high-trust so ci et ies are ready to meet the
chal lenges of globalisation and trans form their na tional econ o mies. New tech nol -
o gies are de stroy ing the old, well-es tab lished and sta ble forms of eco nomic re la -
tions, forc ing the com pa nies to seek new mar ket niches and de velop new forms of
re la tion ships with po ten tial coun ter parts. Thus, the so ci et ies where level of trust
is high are best to adapt to a new technological environment.
Со ци о ло гия: те о рия, ме то ды, мар ке тинг, 2017, 1 191
Social capital in Ukraine’s economic transformation
So cial trust fa cil i tates peo ple’s com mu ni ca tion and in te gra tion, and en sures
so cial and eco nomic ef fi ciency as well. Ac cord ing to Fukuyama, these are the core
func tions of trust.
The World Val ues Sur vey data show that tran si tion econ o mies and Ukraine
in par tic u lar are char ac ter ised by a much lower level of trust and civic en gage -
ment com pared to de vel oped coun tries. The ma jor rea son is that in tran si tion
econ o mies the so ci ety is deeply di vided into com mon peo ple who con sti tute the
ma jor ity and elite as a small priv i leged stra tum. Both of these groups com mu ni -
cate a lot with their friends and fam i lies rather than each other. In tran si tion so ci -
et ies, so cial strata are more closed than in de vel oped coun tries. The rul ing elite
gen er ate cor po rate so cial capital, which operates within their environment.
2. Em pir i cal base
The au thors use the data of so cio log i cal mon i tor ing con ducted by the In sti -
tute of So ci ol ogy of the Na tional Acad emy of Sci ences of Ukraine in July 2016.
The In sti tute of So ci ol ogy has been car ry ing out an an nual mon i tor ing sur vey
since 1994. The av er age sam ple size for each sur vey is 1,800 per sons; they rep re -
sent the en tire adult pop u la tion of Ukraine (18 years old and over). The sam ple is
de signed in three stages: first, the set tle ment se lec tion (sur vey points); sec ond,
the ad dress se lec tion (route start ing points); third, the re spon dent se lec tion. So,
this is a strat i fied three-stage ran dom sam pling with quo tas at the fi nal stage. The
quota sam pling is used to rep re sent cor rectly the pop u la tion of each Ukrai nian
re gion by set tle ment type (city, town or vil lage), sex, age and ed u ca tional level,
which are spe cific to a cer tain re gion and set tle ment type. The Cri mea and oc cu -
pied ar eas of Donbas were not mon i tored in the survey. The self-administered
questionnaire was used as a survey technique.
All the sur veys are con ducted by the in ter view ers’ net work cov er ing the
whole Ukraine. The net work has been de signed by the In sti tute of So ci ol ogy of
the NAS of Ukraine to gether with the Cen tre for So cial and Mar ket ing Re search
“SOCIS”. The Cen tre “SOCIS” or gan ises field re search while the In sti tute of So -
ci ol ogy is re spon si ble for quality control.
3. Re search find ings
So cial cap i tal is gen er ally re garded as a set of re sources con trib ut ing to so cial
co he sion; in other words, these are norms and val ues reg u lat ing and fa cil i tat ing
col lab o ra tion be tween in di vid u als, in sti tu tions and or gani sa tions in a va ri ety of
so cial con texts. The key value of so cial cap i tal is that it in creases the abil ity and
will ing ness to col lab o rate, thereby reducing control over contract performance.
A num ber of stud ies on so cial cap i tal made in Ukraine show that in terms of
in sti tu tional trust and civic en gage ment this coun try is con sid er ably lag ging be -
hind not only West ern de moc ra cies but also the post-com mu nist coun tries
which joined the EU. This can pres ent a se ri ous ob sta cle to the mod erni sa tion of
Ukrai nian so ci ety in the con text of Ukraine’s for eign pol icy which is fo cused on
the EU integration [Sereda, 2015: p. 71].
The tran si tion pe riod in Ukraine as a post-So viet state is marked by rapid de -
struc tion of the old val ues, prin ci ples and in sti tu tions (ideo log i cal mo nism, egal i -
tar i an ism, state and col lec tive own er ship of the means of pro duc tion, etc.). This
192 Со ци о ло гия: те о рия, ме то ды, мар ке тинг, 2017, 1
Volodymyr Piddubnyi, Gulbarshyn Chepurko
has led to the re in force ment of neg a tive so cial cap i tal man i fested as il le gal prac -
tices and un fair rules of col lab o ra tion. Be ing an eco nom i cally un sta ble coun try,
Ukraine is bur dened with high rates of pov erty, in equal ity, un em ploy ment and
im per fect com pe ti tion in the la bour mar ket, which also im pedes the proper
functioning of both social and collaborative networks.
The prob lem of build ing so cial cap i tal in Ukraine is man i fested in over -
whelm ingly in for mal so cial links, a high level of neg a tive so cial cap i tal and low
level of in sti tu tional trust.
By def i ni tion, the in for mal re la tions are be yond the gov ern ment reg u la tion;
for ex am ple, in pro duc tion and dis tri bu tion of goods and ser vices. They also dif fer
in the na ture of their ul ti mate goal (le gal or il le gal) [Castells, Portes, 1989: pp.
11–37]. In for mal eco nomic re la tions are es tab lished through the net work con -
sist ing mainly of close friends or rel a tives, who are sup posed to be trust wor thy
and loyal to each other. The study con ducted by a Rus sian so ci ol o gist Vadim
Radaev sug gests that there is a se ries of rea sons for the informalisation of rules
typ i cal of post-so cial ist coun tries, in clud ing Ukraine: a) for mal rules are de ter -
mined by civil ser vants in such a way that any rule may be cir cum vented, which
brings about un cer tainty for mar ket par tic i pants; b) fac ing the high cost of com -
pli ance with for mal rules, eco nomic agents cre ate spe cial man age ment struc tures
to avoid for mal rules on a sys tem atic ba sis; c) civil ser vants ex er cise se lec tive con -
trol, us ing for mal rules to put pres sure on cer tain eco nomic agents; d) eco nomic
agents, in turn, bar gain with civil ser vants over the terms and con di tions of com -
pli ance with for mal rules; e) mul ti ple ar gu ments and interpretations are pro -
duced to legitimate practices of informalisation [Radaev, 2004: p. 97–98].
It is clear that so cial cap i tal, based on in for mal re la tion ships, plays an im por -
tant role in pro duc ing and prac tic ing ef fec tive prob lem-solv ing strat e gies. How -
ever, it can also hin der the de vel op ment of mar ket mech a nisms and thereby af fect
eco nomic growth (by ig nor ing the law or dis re gard ing the value of the state-
owned as sets, as well as un der es ti mat ing the role of mar ket mech a nisms in
economic regulation, etc.).
One of the pri mary tasks re quired for suc cess ful func tion ing of so cial cap i tal
in Ukraine con sists in its strength en ing through eco nomic de vel op ment. To date,
there have been sev eral ex am ples of suc cess ful pub lic-pri vate part ner ships and
col lab o ra tion be tween busi nesses and com mu ni ties, which show an in crease in
trust in so cial and eco nomic in sti tu tions. The strat egy for strength en ing so cial
cap i tal in volves not only rais ing the pop u la tion’s stan dard of liv ing but also cre -
at ing con di tions fa vour able to small and me dium en ter prises and thus pro mot ing
en tre pre neur ship. Of course, ex pand ing ac cess to fi nan cial re sources, strength -
en ing trust be tween fi nan cial in sti tu tions and the pub lic, developing a reliable
microfinance system are assuming great importance today.
While in no va tive sec tors across the world dem on strate pos i tive ten den cies,
Ukraine’s econ omy sticks to the op po site pat tern [Holovatiuk, 2012: p. 78]. The
phe nom e non of rapid high-tech in dus try growth re mains un at tain able. To make
mat ters worse, Ukraine con tin ues to lose both its in no va tive po ten tial and
scientific capacity.
An in no va tive econ omy re quires, first of all, the well-de vel oped in no va tive
sec tor. Those who are in volved in pro duc ing so cial cap i tal take an in ter est in in -
no va tions due to the na ture of so cial and eco nomic re la tion ships in their com -
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Social capital in Ukraine’s economic transformation
pany. The abil ity to ac cept new ideas and go be yond the usual prac tices, as well as
the sig nif i cance at tached to ac quir ing new knowl edge, con sti tute the es sence of
peo ple’s in no va tive cul ture and, fi nally, de ter mine their innovative thinking and
action.
Ukraine’s in no va tive eco nomic de vel op ment pri mar ily de pends on the qual -
ity of so cio eco nomic en vi ron ment, which is sup posed to gen er ate fa vour able
busi ness con di tions and con trib ute to im ple men ta tion of in no va tions. Un for tu -
nately, the so cio eco nomic en vi ron ment of this coun try is far from be ing fa vour -
able. The tra di tional model of na tional eco nomic pol icy has led to ex ces sive re -
gional dis par i ties in so cio eco nomic de vel op ment and there fore in ten si fied dis -
integrative pro cesses and ten den cies that are pos ing serious obstacles to the
innovative development of Ukrainian society.
It is nec es sary to ac cel er ate the im ple men ta tion of strat egy for ad vanc ing
Ukraine’s eco nomic de vel op ment by in creas ing in vest ment at trac tive ness and en -
hanc ing in vest ment cli mate. The lat ter in volves po lit i cal, le gal, eco nomic, so cial,
etc. com po nents that en sure the abil ity of an eco nomic sys tem to de velop it self and
con trib ute to more ef fec tive use of in no va tions and so cial cap i tal. Ac cord ing to the
ex pert eval u a tions, the in dex which char ac ter ises the at trac tive ness of so cio eco -
nomic en vi ron ment in Ukraine (for all com po nents of the in vest ment cli mate) rose
from –0.115 in 1998 to 0.037 in 2007 [Holovatiuk, 2012: p. 207].
A pre req ui site for im prov ing in vest ment cli mate is the in crease in so cial trust
be ing the ba sis for so cial col lab o ra tion. Ex plor ing the role of so cial cap i tal,
Fukuyama notes that so ci et ies with high lev els of trust and so cial cap i tal are able
to cre ate large-scale en ter prises with out gov ern ment sup port. Thus, com par ing
and eval u at ing ad van tages of dif fer ent strat e gies for a coun try’s de vel op ment,
econ o mists should take into ac count not only its con ven tional but also social
capital [Fukuyama, 2004: p. 16].
So far, Ukraine’s in no va tive eco nomic de vel op ment has not suf fi ciently
strength ened the in ter de pen dence be tween ma te rial and fi nan cial com po nents
of eco nomic ac tiv ity on the one hand and in tan gi ble/im per cep ti ble ones on the
other. In vest ments will con trib ute to eco nomic growth only if so cial trust is built
and man i fested, e. g., as a good busi ness rep u ta tion which, in turn, can not be
formed with out fol low ing eth i cal prin ci ples and norms, both in internal and
external socioeconomic relations.
The Rev o lu tion of Dig nity (2013–2014) along with sub se quent events has
be come an or deal for Ukrai nian so ci ety. To day, Ukraine is fac ing mul ti ple chal -
lenges such as a se vere eco nomic down turn, lack of trust in ma jor in sti tu tions and
au thor i ties, dif fi cul ties on the path to wards the EU in te gra tion, un clear fu ture of
the Eu ro pean Un ion it self and, fi nally, the armed con flict in Donbas. To gether,
they are de stroy ing the fab ric of to day’s so ci ety and in creas ing its frag men ta tion.
Ukrai ni ans re spond to these chal lenges by pro duc ing new forms of self-or gani sa -
tion, which also be comes a new ba sis for the so ci ety’s over all mod erni sa tion.
There fore, it is es sen tial to de cide on what this basis will look like and how it will
evolve in a new social environment.
Un for tu nately, the rev o lu tion has not been able to over come the cri sis of in -
sti tu tional trust in Ukraine. Ac cord ing to the lat est fig ures, few Ukrai ni ans trust
ma jor so cial in sti tu tions. Only 18% of re spon dents re port that they trust the
Pres i dent. The lev els of trust in the Verkhovna Rada (Ukrai nian Par lia ment)
194 Со ци о ло гия: те о рия, ме то ды, мар ке тинг, 2017, 1
Volodymyr Piddubnyi, Gulbarshyn Chepurko
and in the gov ern ment are even lower: about 8% and 9%, re spec tively. The most
trusted in sti tu tions are fam ily (over 90% of re spon dents say they trust their fam -
ily and rel a tives) and vol un teers (more than 55% show trust to wards them). So,
the over whelm ing ma jor ity of Ukrai ni ans still tend to trust only in their clos est
en vi ron ment, which con sid er ably ham pers the na tional-scale so cial cap i tal pro -
duc tion [Ukrainian Society, 2015: p. 539, 544, 545, 551].
It is worth re call ing that the force largely in sti gat ing the Euromaidan pro -
tests was Ukrai ni ans’ re sent ment to wards oligarchs and bu reau crats for hav ing
“pri va tised” all the state in sti tu tions and their de ter mi na tion to “get rid of the
privatisers” in or der to “bring the state back to or di nary peo ple”. Fig u ra tively
speak ing, Euromaidan “let the ge nie out of the bot tle” as it could re lease the sup -
pressed en ergy of the masses, kick-start their ini tia tive and gen er ate their self- or -
gan is ing capacity.
The ex tremely in ef fi cient and cor rupt gov ern ment could no lon ger be trust -
ed. It had lost its le git i macy and there fore the right to rule. Hun dreds of thou -
sands of or di nary Ukrai ni ans in clud ing so cial ac tiv ists, Civil De fence vol un teers,
hu man i tar ian aid work ers, etc. de cided to take charge of the nation’s destiny.
The mon i tor ing data in di cate that Ukrai ni ans are chang ing their views on
the gov ern ment’s role in man ag ing the econ omy. In 2015, 12.7% of re spon dents
(com pared to 8.1% in 2013) ar gued that the gov ern ment’s in volve ment in the
econ omy should be mini mised; 49.4% (com pared to 41.3% in 2013) sup ported
com bin ing gov ern ment reg u la tion with a free mar ket econ omy. The share of
those who wanted to re turn to a cen trally planned econ omy de creased from
27.2% in 2013 to 24.8% in 2015. How ever, 16.8% of re spon dents in 2013 and
12.3% in 2015 did not have a clear idea of what should be the role of the state in
man ag ing the econ omy [Ukrainian Society, 2015: p. 527].
So cial cap i tal highly con trib uted to Ukrai ni ans’ civil mo bi li sa tion dur ing the
Euromaidan events. Or di nary cit i zens along with dif fer ent so cial groups and
move ments united on the ba sis of sol i dar ity and com mit ment to de moc racy.
Socio-po lit i cal mo bi li sa tion at the na tional level has be come a fac tor in flu enc ing
the choice of a model for the so ci ety’s fur ther de vel op ment, eco nomic in par tic u lar.
The Rev o lu tion of Dig nity has marked a new stage in Ukraine’s trans for ma -
tion. How ever, the world is also un der go ing sub stan tial geopolitical and eco -
nomic changes. Ukraine will not be able to ad just to these global changes with out
achiev ing an ap pro pri ate qual ity of so cial and eco nomic institutions.
Ac cord ing to the Sus tain able De vel op ment Strat egy “Ukraine — 2020” ini ti -
ated by the Pres i dent in 2014, over 60 re forms and gov ern ment programmes
(lustration and anti-cor rup tion laws, ju di cial re form, de cen trali sa tion of gov er -
nance, tax re form, etc.) must be launched in a rather short pe riod. All of these re -
forms are de signed to ben e fit the coun try. But be ing de vel oped and im ple mented
al most si mul ta neously, they are caus ing con fu sion and dis con tent in the so ci ety,
thereby lead ing to fur ther so cial dis in te gra tion. The ba sis for suc cess ful im ple men -
ta tion of re forms is so cial cap i tal in the form of trust and so cially use ful par tic i pa -
tion of the au thor i ties and or di nary cit i zens in es tab lish ing a real de moc racy.
To this day, the cen tral gov ern ment has not taken ad e quate mea sures to en -
sure the in teg rity of Ukrai nian so ci ety. It seems to not com pletely un der stand or
even ig nore the na ture of so cial trans for ma tions oc cur ring now. Po lit i cal de ci -
sions made by Ukrai nian gov ern ment of fi cials are not only in ef fec tive — they also
Со ци о ло гия: те о рия, ме то ды, мар ке тинг, 2017, 1 195
Social capital in Ukraine’s economic transformation
ag gra vate the on go ing con flict in the so ci ety and raise so cial ten sion. Nei ther new
re al i ties nor cur rent needs of or di nary cit i zens are taken into ac count be fore of -
fer ing them “new rules of the game”. To day, there is an ur gent need for open di a -
logue with the pub lic (so cial ac tiv ists in par tic u lar), which also means gen er at ing
social capital, first of all, at the meso- and macro-level.
Con clu sions
The au thors have tried to ana lyse how so cial cap i tal is be ing formed in
Ukraine and iden tify some of its dis tinc tive fea tures. These is sues as sume par tic -
u lar rel e vance against a back ground of im ple ment ing re forms and car ry ing out
modernisation.
The cru cial role of so cial cap i tal is de ter mined by its abil ity to con vert the as -
sets of re la tions be tween in di vid u als into col lec tive ac tions. Ukrai nian so ci ety is
no ex cep tion in this re gard. The re cent data in di cate a surge in volunteerism and
cit i zens’ will ing ness to ex er cise con trol over gov ern ment de ci sions (mainly as a
re sult of Euromaidan). How ever, the mech a nism for en sur ing civic par tic i pa tion
at the na tional and re gional lev els re mains im per fect. In vest ing in so cial cap i tal
for the long term im plies cre at ing fa vour able con di tions for the de vel op ment of
civil so ci ety (through ex pand ing di rect de moc racy and con sen sus de ci sion-mak -
ing in par tic u lar), im prov ing eco nomic cli mate, rais ing stan dards of liv ing, pro -
mot ing values of civic participation, collaboration and solidarity between all
social forces.
The strat egy for strength en ing so cial cap i tal should take into ac count re -
gional specificities. Ac cord ing to em pir i cal re search, the so cial cap i tal is mostly
gen er ated by Putnam-type as so ci a tions in West ern Ukraine (whose mem bers
unite for the com mon good) while the Olson-type as so ci a tions pre vail in north -
ern and cen tral re gions (whose mem bers pur sue pri vate in ter ests and lobby for
pref er en tial pol i cies). The mem ber ship in so cial or gani sa tions does not re sult in
build ing trust in South ern Ukraine. Donbas is the only re gion where a per son’s
per cep tion of ef fi ciency of so cial in sti tu tions and there fore level of in sti tu tional
trust are de ter mined by self-eval u a tion of ma te rial well-be ing. It is hardly pos si -
ble to pro duce so cial cap i tal in this re gion un less the cur rent eco nomic sit u a tion
is im proved. On the other hand, hos til i ties and increasing number of people
fleeing Donbas considerably hamper its economic recovery.
Po lit i cal sta bil ity, ef fec tive ness of sys temic trans for ma tions and eco nomic
growth are de ci sive fac tors in form ing so cial cap i tal in the pro cess of es tab lish ing
and main tain ing tri lat eral col lab o ra tion be tween gov ern ment au thor i ties, civil
so ci ety and mar ket. Ukraine should un der stand and adopt the EU par a digm of
sol i dar ity, which is based on a com pro mise be tween the cen tral gov ern ment and
lo cal au thor i ties. This par a digm al lows civic ac tors to take an ac tive role in
developing and implementing state policies and programmes.
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