Agglomeration processes are objective in nature, which determines their development in Ukraine throughout the period of its independence. However, these processes in our country mostly occur spontaneously. Because of that they primarily rely on non-formal institutions, such as verbal agreements, administrative stereotypes or social needs. At the same time, agglomerations forming and their development prove a very important trend in the modern world economy: increasing of social and economic role of big cities in the era of globalization and digitalization. At one time, this problem was partially solved at the first stage of the administrative-territorial reform in Ukraine before the large-scale invasion. However, after the start of the active phase of hostilities, the situation has deteriorated significantly. On the one hand, a large number of internally displaced persons and relocated businesses have appeared. They are concentrated mainly in large cities and surrounding rural communities. On the other hand, due to the loss of a significant part of human capital, tensions in the local governments that are the centers of agglomerations have increased, especially in the process of implementing administrative and management functions of territorial management. This has significantly realized the problem of developing high-quality institutional support for increasing the socio-economic potential of the development of agglomerations. At the same time, it should be noted a need to improve the regulatory and legal regulation of agglomerations in view of determining their place in the post-war economic recovery of Ukraine. First of all, this concerns the regulation of the activity of the institute of urban agglomerations at the legislative level. It is also necessary to create an appropriate institutional basis for the training of qualified management personnel capable of ensuring the development of Ukrainian agglomerations at the stage of post-war economic recovery using modern management technologies. In particular, in this context, it is worth emphasising the wide implementation of project management, IT technologies and network marketing, as well as modern tools of territorial branding for agglomerations and strategizing their comprehensive development. 

agglomerations, territorial communities, institutional support, spatial development, governance mechanisms, post-war recovery 

The war and its consequences for the Ukrainian economy have significantly increased the security challenges for most regions of our country. Security problems in the energy sector took one of the first places due to the destruction or damage of most energy infrastructure objects as a result of hostilities or artillery fire and missile strikes. The southern and northeastern regions are in the most threatening and difficult situation as their energy facilities are exposed to almost daily shelling. The situation is somewhat better in the central and western regions of Ukraine but there, too, missile strikes have significantly damaged a number of power plants, thermal power plants, transformer substations and other energy infrastructure facilities. All this urges the state authorities and local governments of each region of Ukraine to take urgent measures aimed at strengthening energy security and implementing modern systems for the protection of energy infrastructure objects. Primarily, the expediency of deconcentration and spatial distribution of energy generating and transmission capacities should be noted. At the same time, it is necessary to strengthen their physical protection and stimulate the involvement of investments in the technological modernization of the regional energetics. The problem will be partly solved by implementing renewable energy components and increasing the efficiency of heat and power generation based on the use of alternative fuels.The introduction of technological innovations and the spatial distribution of energy facilities within individual regions may lead to an increase in transformational and transactional costs of energy production and its transmission to end users. Because of that magnification the energy efficiency of housing and communal services and budget institutions is very important direction of increasing energy security in almost all regions of Ukraine. To do this, energy-saving technologies should not only be introduced, but social populism, traditional for Ukraine, should be abandoned in the energy and housing and communal spheres in favor of market mechanisms for electricity and thermal energy pricing. 

energetics, energy security, energy efficiency, regional economy, global challenges, global fluctuations 

The article is devoted to the peculiarities of the regional development of Ukraine in the modern challenges of globalization. The main factors determining the nature and quality of strategic planning in different regions of Ukraine include the consequences of military aggression by Russia and the geopolitical changes caused by it on the European continent. New opportunities are open for the oblasts of the Western Region of Ukraine, given the prospect of further rapprochement between Ukraine and the EU. The main features of the current stage of globalization and European integration in the context of their impact on changing the principles and directions of regional development strategy in Ukraine are outlined. The peculiarities and nature of the impact of current global transformations on the development of individual regions of Ukraine are analyzed. The article notes that the specifics of the functioning of the regional economy in the current situation are determined primarily by tasks related to the logistics of the Ukrainian army. It is important to create appropriate conditions for the relocation of businesses from regions close to the war zone, as well as to provide the necessary social and economic support to internally displaced persons. The main global threats to the oblasts of the Western Region of Ukraine are caused by the rupture of traditional economic ties and increasing international competition for natural, financial, and human resources. The priority directions of adaptation of local governments and business circles of the Western Region of Ukraine to modern challenges of globalization are based on more effective use of European integration potential. The article includes suggestions for state authorities of Ukraine on priority areas for improving the principles and mechanisms of strategy at the regional level. It emphasizes the importance of implementing the model of end-to-end strategic planning of territorial development, starting from the State Strategy of Regional Development and ending with strategic development plans of individual communities. Strategies at the supraregional, regional, and subregional levels should be intermediate. In addition, the strategic plans of the respective territories should be implemented through sectoral programs for several years. The priority directions of improvement of the territorial strategizing system in the Western Region of Ukraine are developed. 

globalization, Western region of Ukraine, strategizing, strategic planning, local self-government 

The administrative-territorial reform, which is being carried out in Ukraine, has updated the search for new ways of endogenous development of its regions. Now, the real decentralization of power is one of the main priorities of the initiated changes. This should increase the institutional and managerial capacity of local governments in both individual communities and regions. At the same time, achieving this goal will be difficult if we ignore the current trends of globalization and the impact of globalization factors on the endogenous development of regions. However, recent practices show that globalization factors can have not only stimulating but also limiting effects. These factors can also reduce the efficiency of regional development potential. The case of the spread of quarantine restrictions in many countries caused by the COVID-19 coronavirus pandemic can serve as an example. As a result, the government institutions of different states and their regional local governments face a number of serious challenges of socio-economic nature. The negative factors of globalization impact on the endogenous development of regions in modern conditions include: non-tariff restrictions generated by environmental, security or socio-psychological motives; opportunistic behavior of residents or businesses; corruption and the shadow economy; insufficient quality of human and social capital. It results in restrictions on the free movement of people, goods and capital under the pretext of protecting citizens from viral threats or from potentially harmful consumer goods. Another argument is the ban on using dishonestly acquired financial resources. As opposed, the main positive aspects of globalization’s impact on endogenous development of regions include: activation of interregional and cross-border cooperation, improvement of regional institutional and information infrastructure, local governments’ openness to cooperate with foreign investors and international donor organizations, cultural integration and implementation of democratic practices of public administration in regions, including instruments of participatory governance. 

globalization factors, deglobalization, regions endogenous development, regional economy, self-development potential of the region 

The main reasons and sources of the spread of shadow operations in wholesale and retail trade in Ukraine are studied. The paper reveals that tax evasion and unaccounted trade operations with smuggled and counterfeit products are the most common types of shadow activities in trade in services. Entrepreneurs and citizens most often use the shadow schemes in the process of buying and selling goods due to gaps in the system of institutional regulation, as well as due to the imperfection of fiscal policy. At the same time, the most threatening are the growth of institutional dysfunctions and the spread of various forms of opportunistic behavior. They generate institutional mutations in the wholesale and retail trade business, as well as in the system of control over the trade activities. A number of new approaches to the implementation of national and regional economic policies aimed at de-shadowing wholesale and retail trade services are suggested. The priority directions and mechanisms of wholesale and retail trade de-shadowing in Ukraine in accordance with the existing challenges are outlined. Particular attention is paid to the need to generate a modern business culture of wholesale and retail market participants, as well as its digitalization and development of e-commerce. Important means of de-shadowing also include the intensification of cross-sectoral and municipal-private partnerships, increasing the level of transparency and efficiency of regulatory institutions, modernization of trade infrastructure, and fiscal liberalization. The paper offers a range of recommendations for public authorities and local governments about priority areas and principles for improving the institutional support of wholesale and retail trade in order to de-shadow it, including the need to normalize the work of the institute of individual entrepreneurs in trade, to change the method of collecting personal income tax and bring its value closer to the single tax rate for entrepreneurs, and to improve the quality of human and social capital. 

wholesale and retail trade, institutional dysfunctions, shadow operations, de-shadowing mechanisms, economic instruments 

The present stage of decentralization in Ukraine is characterized by the activation of the processes of harmonization of economic development priorities in many newly established consolidated territorial communities (CTCs). In the first place, it is about the CTCs that were established around large cities after last year’s local elections. Traditionally, rural areas are rather skeptical about the possibility of complete realization of their interests within such CTCs. It causes numerous conflict situations. A range of CTCs established in the previous years even refuse to join new municipal CTCs. Often the refusal contradicts economic logic but meets the social support of the local population. For example, Lvivska CTC didn’t manage to consolidate a range of adjoining areas around it due to the unfriendly disposition of management of surrounding CTCs and their residents. Consequently, its spatial location turns out to be rather asymmetrical. The city’s boundaries literally “encounter” the neighboring village CTCs on the South and East. Moreover, some part of municipal infrastructural facilities turned out to be at their territory (supermarkets, trade centers, traffic intersections, and communal infrastructure facilities). To overcome the described problems and prevent conflict situations, it is reasonable to change approaches to the implementation of economic policy on the local level in the future. In the first place, modern approaches to the implementation of large cities’ structural policy should be introduced at the present decentralization stage. Because currently manufacturing prevails in the structure of these cities’ economy in Ukraine. Moreover, the foundations of industrial capacity of the municipal economy were formed back in the Soviet period. In the first place, it is about industrial regions of Eastern and Southern Ukraine. Yet, even in the West, namely in Lviv, most currently operating industrial enterprises were founded in the 1960s (some of them even in the 1940s). It is hardly real to transfer the production capacities of such enterprises to the neighboring rural areas. So, increasing the capacity of innovative production in adjoining rural areas should be the major priority of large cities’ structural policy at the present stage of decentralization. 

structural policy, large cities, decentralization, consolidated territorial communities, spatial development 

The features of the management of large cities’ economies in the Western Region of Ukraine are researched. The main attention is paid to the mechanisms of increasing the efficiency of structural transformations in the city’s economy. In particular, the primary emphasis is on the functioning of financial and organization-management mechanisms. The main barriers that limit the potential for structural transformation of the economy of large cities in the Western Region of Ukraine in modern socio-economic conditions are identified. First of all, in this context, the paper notes the predominance of short-term economic interests of local political elites over the strategic interests of urban development, as well as excessive support of municipal enterprises leading to gradual displacing private business from the local markets of services. As a result, local budgets are used rather inefficiently, and the vast majority of budget expenditures are directed to cover the losses of municipal enterprises, instead of spending on development projects. This causes the actual absence of significant structural changes in the economy of large cities in the Western Region of Ukraine for a long period of time. Improving the situation is possible in case of adequate application of financial and organization-managerial mechanisms to increase the efficiency of structural transformations in the economy of large cities in the Western Region of Ukraine. First of all, it means improving the investment climate, increasing the quality of communal property management, and increasing the share of private business in the urban economy. It is equally important to intensify informational and educational work with the cities’ residents to raise their awareness about the role of private business in the innovative development of the urban economy and in the growing welfare of the local population. 

large cities, structural transformations, city economy, financial mechanism, organization-managerial mechanism, economic efficiency 

The paper examines the peculiarities of the spread of the shadow economy in the sphere of wholesale and retail trade in the regions of Ukraine. The nature and features of the trade sphere shadowing in different regions of Ukraine are revealed. The trade enterprises in large cities and near-border regions are established to be the most subject to the shadow processes. These regions play a main role in the development of wholesale and retail trade in Ukraine. At the same time, trade is more important in the structure of their economy compared to other regions. The main tendencies of the change of shadow economy volumes in the trade sphere of Ukraine and its regions are outlined. In 2017 compared to 2013, the volumes of shadow operations in the sector of wholesale and retail trade reduced in the prevailing number of Ukraine’s regions. However, it was accompanied by an increase in the number of individual entrepreneurs in trading activities. This was the cause for a conclusion about the transition of the part of the shadow market in wholesale and retail trade in the regions of Ukraine into the sector of individual entrepreneurs. This manner of tax evasion has become especially widespread in Ukraine during recent years. As a result, the volume of shadow operations in the wholesale and retail trade in Ukraine has reached about 50%, ranging from 35-40% to 60% and more in different regions. Proposals aimed at the de-shadowing of the trade sector of Ukraine are formulated. Their implementation will allow to reduce the volume of shadow operations in the wholesale and retail trade of most regions of Ukraine and to increase the efficiency of using the socio-economic potential of their development. These proposals are intended to introduce institutional changes aimed at limiting the ability of retailers to use individual entrepreneurs for tax evasion. In addition, strengthening the influence of local self-government bodies on control of the economic entities’ activity in the sphere of wholesale and retail trade in the regions is suggested. 

wholesale and retail trade, shadow operations, shadowing, regional development, economic potential 

The paper outlines the features of structural transformations in the economy of large cities in conditions of globalization. Special attention is paid to finding priority directions and mechanisms of impact of global economic changes on evolutionary advances in economic structure of large cities. The decisive role of large cities in economic development of contemporary states is emphasized. The processes are accompanied by constant growth of the share of urban population and concentration of growing economic capacity in cities. Moreover, more and more metropolises and global cities emerge. Their major advantage is a high concentration level of production capacities and capital as well as significant human capacity, which promotes innovative development of various sectors of urban economy, mostly energy, information technologies, transport, household services, leisure and banking sector, etc. The following problems are defined as the most essential of those faced by large cities in the era of globalization: deteriorating quality of social capital, growing security challenges, growing risks of technological disasters, deteriorating quality of environment and environmental situation in general, growing load on engineering and social infrastructure, need to secure constant supply of sufficient volumes of drinking water and food. The paper proves that the priority directions of economy development in large cities in the era of globalization is to improve the mobility of population, improve living conditions and meet high standards of citizens’ household comfort, form innovative information-communication networks, establish qualitative planning of urban space, solve ecological problems, namely through renewable energy and prioritization of environmental protection. Recommendations regarding top priority measures of adaptation of large Ukrainian cities to modern requirements of globalization based on the experience of the most developed countries in the world are suggested. In particular, the authors emphasize the need to increase the volumes of investment in the development of information technologies and activation of digitalization of urban space due to releasing the share of budget resources currently inefficiently used and directing them on meeting social needs of citizens. 

structural transformations, large cities, economic globalization, urban space, digital technologies 

The problems of transboundary cooperation development between Ukraine and the EU are addressed. Priority focuses are placed on the disproportionate development of the neighbouring border territories on different sides of the border. The main causes for the blocking of convergent processes in the transboundary space between Ukraine and the EU are identified. The presence of objective background for the rise and spread of institutional trap of cross-border divergence is proved. The key effects and the reasons for the establishment of this institutional trap are described.
The basic mechanisms of forming of cross-border divergence institutional trap at different stages of European integration of Ukraine are studied. Priority directions of the trap’s negative impact on the various links of cross-border cooperation between Ukraine and the EU are outlined. Potential ways to mitigate these effects in sectoral and functional profiles are determined. Main attention focuses on the importance of the quality of human and social capital to eradicate institutional trap of cross-border divergence.
Key areas to overcome the institutional trap of cross-border divergences between the EU and Ukraine are substantiated. Three primary planes of the priority efforts application for government and regional authorities on different sides of the border are allocated. The first plane is considered to be socio-psychological. It covers the traditions and mental attitudes that are associated with the rooting of institutional dysfunctions in cross-border cooperation between Ukraine and the EU. The second plane is the financial-economic one. It concerns economic interests and financial results of participants of the institutional trap of cross-border divergence. The third plane is the plane of organization and management solutions and regulatory policy. It sets the administrative leverage for destruction of institutional trap of cross-border divergence. First of all, it is applied for the development of business activities in the transboundary area between Ukraine and the EU, deregulation of cross-border markets, establishment of modern institutional forms of cross-border interactions, as well as introducing elements of the knowledge economy in near-border EU regions of Ukraine. 

institutional traps, cross-border divergence, cross-border cooperation, near-border regions, cross-border markets, border trade 

Major problems of cross-border cooperation development between Ukraine and the EU on the current stage of European integration are examined. The fact that economic convergence within the cross-border region «Ukraine-EU» reflects the success of cross-border cooperation is proved. This is stipulated by major tasks attributed to cross-border cooperation. Primarily, it refers to the leveling of limiting border function, equaling of social living standards on both sides of the border, activation of cross-border entrepreneurship and implementation of joint investment projects, directed at economy development of the whole cross-border region.
Special attention is paid to considerable role of human and demographic potential in terms of expansion of convergence processes in cross-border space between Ukraine and the EU. In particular, the fact that reduction of population and falling of its qualification level that happens under the conditions of strengthening of labour migration from bordering regions of the Western Ukraine into the EU countries leads to negative consequences is stressed. Primarily, it concerns worsening of the quality of labour resources used in the system of cross-border business and in the work of local governance bodies of bordering territorial communities, and public society institutes involved in cross-border cooperation.
The necessity of top priority development of cross-border labour markets is emphasized in order to increase the efficiency of exploitation of human and demographic potential of Ukraine’s bordering regions, first of all those bordering the EU. The fact that evolution of cross-border labour markets is accompanied by the leveling of labour costs within the whole cross-border region is proved. It promotes maintenance and recovery of human and demographic potential in the zones of cross-border space that are deemed to be depressed. Consequently, convergent processes are being activated and positive institutional impulses, directed at strengthening of bilateral integration in the social and economic space between Ukraine and the EU are being formed.
On this basis the range of proposals for state authorities operating at central and regional levels is suggested. Primary attention is proposed to be paid to the improvement of managers training quality and activation of informational and educational activity in bordering territorial communities of Ukraine aith attraction of specialists from EU countries.
Directions of increasing of local governance management efficiency in the bordering territories of Ukraine are separately outlined. In particular, it is related to improvement of their functional capacity in terms of conducting of administrative and territorial reform. Introduction of subsidiary principle into the practice of regional management of Ukraine’s bordering regions is the major principle of the reform. This will allow bringing their competence level closer to the requirements put before the local governance bodies of bordering territories of EU countries that border Ukraine. As the result, harmonization of institutional environment will take place and will positively influence the convergence and efficiency of human capacity exploitation in the «Ukraine-EU» cross-border region.
Special attention is paid to informational-educational, organizational-institutional and infrastructural components of development of cross-border region’s socio-economic space that encompasses bordering territories of Ukraine and of neighbouring Poland, Slovak Republic, Hungary and Romania. 

convergence, socio-economic space, cross-border region, EU, human and demographic potential 

The impact of innovations on the development of social infrastructure in rural areas is investigated. The factors of increasing the economic potential of the rural areas in the context of the modernization of social infrastructure are identified. Attention is focused on a valuable role of social infrastructure of rural areas for the evolution of agricultural market in the region. In particular, it is emphasized that modernization of social infrastructure stimulates growth of supply and demand in agricultural market in the region. This gives reason to study social infrastructure in rural areas as one of the components of agricultural market’s infrastructure in the region. The study found that the basic components of social infrastructure in rural areas, which affect the formation of economic potential of rural areas and are displayed on the agricultural market in the region, are: the sphere of medical services for the rural population, pre-school and school education in rural areas, public services for country folk, rural recreation and consumer services. Sustainable development and modernization of these constituents promotes expanding employment and stimulates growth of demographic potential of rural areas and the quality of its human and social capital. On this basis labor productivity in agriculture and in relating to agriculture economic spheres is growing. In addition, the investment climate is improving, that entails the increase of investment attractiveness of rural areas. It is substantiated that the quality of human capital improvement and increasing of rural productivity leads to growth of country folk’s income. This stimulates demand on the agricultural market of the region. According to the results of the study proposals for state and local authorities are formulated. These proposals relate to the priorities of implementation of infrastructure innovations in the social sphere of rural areas. In particular, it is proposed to involve modernization of social infrastructure, localized in rural areas, into priorities of the state agricultural policy, using mechanisms of its financial support similar to those operating in the EU. To modernize the social infrastructure of the agrarian market of the region is also proposed to create a modern system of financial incentives for businesses and the public in order to increase investment resources allocated for the modernization of this infrastructure through co-financing mechanism. Decentralization of power and increased levels of financial capability of rural communities is considered to be an important factor in stimulating co-financing of projects of social infrastructure of the agrarian market in the region. In addition, it is proposed to use international technical assistance programs more actively for the implementation of infrastructure projects in rural areas. This primarily refers to projects of modernizing rural medicine and education through grants that are involved by the local authorities and institutions of civil society. 

social infrastructure, rural areas, agricultural market in the region, modernization, economic potential 

The basic institutional dysfunctions in the context of their influence on the efficiency of social and economic potential of development of the rural areas of Ukraine are investigated. The theoretical and methodological principles of forming and deep-rooting the main institutional dysfunctions are analyzed. The special attention is paid to the «institutional traps» (steady inefficient institutions which reduce transactional costs of their participants, but increase these costs for the economy in general), «institutional mutations» and «mimicry of institutions» (partial or complete change of the internal target orientation of the institute while maintaining its «outer shell»), «anomie of the institutions» (weakening and incompleteness of the institution, decrease of the real importance of the rules that it support).

It was found the obvious dependence of the described institutional dysfunctions on the presence in the economic space of the country such institutional gaps as: «institutional vacuum» (lack of institutions and norms required for the proper regulation of the economy), «institutional ruptures» (regulatory disparities between adjacent institutions or institutional levels), «institutional pits» (the part of the institutional space in which there is a simultaneous need of institutional changes but there are no institutional mechanisms of such changes), «anti-institutions» (norms that does not comply with the spirit of particular institutional environment and rules of economic behavior).

The examples of the destructive influence of the institutional dysfunctions on the efficiency of using the potential of social and economic development of rural areas of Ukraine are proposed. In particular, the attention focuses on the significant decrease of labor productivity and falling of profitability of agricultural production under the influence of the «institutional traps», «institutional mutations», «institutional anomie» and «mimicry of institutions».

The reasons for the emergence of the major institutional dysfunction in the rural economy are identified. In particular, the genesis of formatting of the institutional «corruption trap», «illegalization trap» and «trap of self-implementing pessimistic expectations» under the influence of the «institutional vacuum», «institutional ruptures», «institutional pits» and «anti-institutions» that cause the lack of control of the local government, destroy the sound competition in the rural economy, decrease the quality of human and social capital of the village, demoralization of the rural society is traced.

Means of minimizing the destructive impact of the institutional dysfunctions on the efficiency of using the potential of social and economic development of rural areas of Ukraine are proposed. This primarily refers to blocking the reasons that lead to the producing of the institutional «corruption trap «, «illegalization trap» and «trap of self-implementing pessimistic expectations» in rural areas. In addition, directions of forming in the rural economy of a number of institutions that can to compete with «institutional traps» are outlined. These institutions will ensure for their participants smaller transaction costs than under conditions of the «institutional traps» and destroying these traps. Agricultural clusters and agro-industrial parks may be the examples of such institutions.

The tools that can ensure the efficient use of the socio-economic potential of Ukraine rural areas on the basis of development of the local self-government village institutions, rural entrepreneurship, education and health protection of the rural residents are described. 

institutional dysfunctions, rural areas, socio-economic potential, efficiency 

Special features of functioning of the region agricultural market in the context of modernization of its infrastructure are investigated. The main emphasis is placed on identifying factors and barriers of the innovative development of production, financial and institutional infrastructure of the agricultural market of the Lviv region aimed at the rural areas potential increasing. On this basis the conclusions are formulated that the priority directions for further improvement of the agricultural market infrastructure of the region under the modern conditions are demonopolization of the economy, decentralization of the financial and budgetary system as well as liberalization of the foreign economic activity. 

Analyzed advanced domestic and foreign scholars arguments about the potential benefits and risks for the domestic food sector at the prospect of signing by the Ukraine Association Agreement and formation of free trade zone with the EU. The influence of activation of Ukraine’s European integration on the formation of relations with the Russian Federation and other countries of the Customs Union in the agri-food sector. 

agricultural production, free trade zone, European Union, Association Agreement, Russian Federation 

Main directions for formation of human potential on rural territories in the context of eurointegration of Ukraine are researched. The influence of the Protestant ethics on the formation of European values ideology in rural territories is reviewed. Correlation between collective-state farming in Soviet period and the mentality of rural inhabitants in Ukraine nowadays is analyzed. The necessity of consideration of axiological basics in formation of rural territories’ human potential is substantiated. Emphasis is focused on priority of European value landmarks for increase of human potential of rural territories of Ukraine. 

axiological basics, human potential, rural territories, eurointegration 

The features of modern agribusiness in Ukraine are revealed. The existing potential of the country in agricultural production is analyzed and the level of its implementation is assessed taking into account the available resource potential of rural areas. Based on consideration of the potential risks of rural development the measures to promote the development of agribusiness on a competitive basis are proposed. 

agribusiness, competitive environment, rural areas