Institutional support for the development of the Donbas: a retrospective analysis performed upon the inclusion of the region Into the Russian Federation

Abstract

Subject. Institutional support for the development of the Donbas during the process of its adaptation to the social and economic system of the Russian Federation. The state and development prospects of institutional subsystems: business, public authority, financial, and non-commercial sectors. Purpose. To study the main parameters of the institutional subsystems in the Donbas and determine the problems and the vectors of institutional, social, and economic development of the region in the situation of an armed conflict running parallel to its integration with Russian institutes. Research methods. The theoretical basis of the study was the dialectical method, which allowed us to consider social, economic, and institutional systems of the Donbas in the context of integration of the region in Russian social environment. To determine the problems of social, economic, and institutional development of the region, the monographic method was used. It allowed us to review the existing approaches to the state and prospects of the economy and the supporting institutes during the period of integration into the Russian Federation. A retrospective analysis was a key practical research method. It helped to determine the dynamics of the main institutional subsystems of the region from the point of view of modernisation of the functions implemented by such institutes as business, public authority, financial, and non-commercial sector during the armed conflict of 2014-2021 and the special military operation. Results and discussion. After its inclusion into the Russian Federation, the institutional support of the development of the Donbas requires a fundamental transformation in order to adapt to new conditions. The transformation should involve a comprehensive transformation of the social and economic model of the region and its infrastructure, diversification, and modernisation of the development institutes. At the same time, it is necessary to take into account the weaknesses of the institutional system of the region. They include external threats caused by the armed conflict which started in 2014 and caused damage to the business institute; a dramatic reduction in the number of stimuli for the functioning of financial institutes, especially for the innovative and investment activities; underdevelopment of non-commercial organisations; and a high level of bureaucracy in public institutions. The new institutional model should be aimed at decreasing the vulnerability of the region to geopolitical and economic crises and its dependence on heavy industry and coal mining, while developing high-tech industries and innovations, and investing in education, healthcare, and the retraining of the labour force. It is therefore necessary to develop reasonable adaptation strategies and programmes, including appointing responsible executives to the governmental and municipal bodies and developing mechanisms for the financing of projects aimed at the economic growth and well-being of the population.