HUMAN-CENTRIC ECONOMICS: THE ROLE OF HUMAN POTENTIAL QUALITY IN THE ECONOMIC GROWTH AND DECLINE OF UKRAINE AND THE WORLD

Abstract

The article investigates the impact of human potential on the economic growth and decline of nations, with a particular focus on Ukraine. It explores the interplay between the quality of human capital, innovation activity, and the competitiveness of national economies. An analysis of studies by renowned global scholars–classics of economic thought–demonstrates that a country’s economic success is not determined by natural resources or geography but by the nature of its political and economic institutions. Inclusive institutions foster development, citizen engagement in societal processes, and economic modernization. In contrast, extractive institutions, which concentrate power and resources in the hands of a narrow elite, lead to corruption, economic stagnation, and increasing social inequality. The authors emphasize the critical role of managerial elites in shaping an effective economic model. The quality of leadership, competence, and strategic vision are identified as decisive factors for sustainable development. Pathways are proposed for transforming extractive institutions into inclusive ones to ensure Ukraine’s economic growth in the post-war period. Special attention is given to reforming the political system, combating corruption, and creating conditions conducive to innovation. Key directions for transitioning from extractive to inclusive institutions are outlined as a primary lever for economic recovery and prosperity in Ukraine, coupled with a significant reduction in corruption levels. This involves shifting from a culture of administrative pressure without feedback, prevalent in government bodies, to a culture of systemic management focused on tangible outcomes, such as indices of citizens’ quality of life. The article also examines international experiences, notably the Singapore model, where a high-quality managerial elite served as the foundation for an economic breakthrough. Principles for selecting personnel for key positions are identified, including the use of “white filters” to form competent, ethical, and strategically minded management teams. The adaptation of this approach to Ukraine’s context is proposed, taking into account the mental characteristics of its society. The study highlights the need to enhance education and professional training levels to cultivate competitive human capital. It substantiates the importance of introducing systemic management oriented toward measurable results and quality-of-life indices. The conclusions of the article offer valuable insights for researchers, policymakers, and economists engaged in reforming economies and advancing human potential development.