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УДК 330.341.1

DOI: https://doi.org/10.36887/2415-8453-2026-2-11

Kychkailo Oleksandra,
National Scientific Center, “Institute of Agrarian Economics,
https://orcid.org/0009-0001-8152-8362

JEL classification: Q15, O13, P48

The article examines the essence, functioning, and role of inclusive and extractive institutions in the development of rural areas of Ukraine in the context of decentralization and socio-economic transformation. It is argued that the institutional environment is a determining factor in shaping the trajectory of rural development, as it determines the population’s access to resources, opportunities for participation in decision-making, the level of social cohesion, and the quality of life in rural communities. The structure of rural territorial communities in Ukraine and their financial capacity is analyzed, which made it possible to establish the dependence of inclusive development on the effective management of budgetary resources. It is determined that, even with sufficient financial resources, it is impossible to achieve sustainable, inclusive results without proper institutional mechanisms for participation and accountability. Attention is paid to the comparative characteristics of inclusive and extractive institutions of rural development, revealing their key features, mechanisms of influence, and socio-economic consequences for rural communities. It has been proven that inclusive institutions promote the involvement of a wide range of residents in management processes, ensure transparency in resource allocation, and support the development of small businesses, cooperation, and human capital. Extractive institutions, on the other hand, restrict access to resources, concentrate power in the hands of a narrow circle of actors, exacerbate social inequality, and hinder the long-term development of rural areas. An analysis of Ukrainian practices shows that the dominance of extractive institutional practices remains a key threat to sustainable rural development. It is concluded that the formation of an inclusive model of rural development requires a targeted transformation of the institutional environment based on participation, transparency, accountability, and social justice. The results of the study can inform the development of state and regional policies for rural development, as well as further scientific research on the challenges of institutional support for inclusive development.

Keywords: inclusive institutions, extractive institutions, inclusive development, rural development, decentralization, institutional environment, local self-government.

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The article was received 31.05.2026

Quote article, APA style

Kychkailo O. 31.05.2026. Inclusive and extractive institutions of rural development. Ukrainian Journal of Applied Economics and Technology. 2026. №2. 65-72 pp. https://doi.org/10.36887/2415-8453-2026-2-11

Quote article, MLA style

Kychkailo O. Inclusive and extractive institutions of rural development. Ukrainian Journal of Applied Economics and Technology. 31.05.2026. https://doi.org/10.36887/2415-8453-2026-2-11