2020 8

Institutional Support of Internalization of Negative external Effects of Old Industrial Production Models

О.S. Serdiuk,
Phd in Economic Sciences
ORCID https://orcid.org/0000-0003-3049-3144
e-mail: oleksandrserdyk@ukr.net,
Institute of Industrial Economics of the NAS of Ukraine, Kyiv

Citation Format
Serdiuk O.S. Institutional Support of Internalization of Negative external Effects of Old Industrial Production Models. Management of Economy: Theory and Practice. Chumachenko’s Annalscollection of scientific papers / Institute of Industrial Economics of the NAS of Ukraine. Kyiv, 2020. P. 132-151. DOI: https://doi.org/10.37405/2221-1187.2020.132-151


The article substantiates the conceptual provisions for the institutional support of the internalization of the negative externalities of old industrial production models. To internalize negative externalities, it is necessary to create institutional conditions under which all parts of the internalization process (waste producers, central regulators, local communities, recipients of negative impacts) will be interested in conscientious performance of their functions. It is suggested that a unique regulatory system should be established within each individual industry sector. It is determined that the threat of opportunistic behavior on the part of agents is a potential negative factor in the centralized collection of information and distribution of payments for public benefit. The effectiveness of formal institutions should be viewed through the prism of informal rules that have developed in society. Informal rules are the quintessence of natural motives for human behavior. Psychological features of motives of human behavior determine the expediency of appropriate adaptation of the institutional system. That is, the complex of institutions must be built in such a way that the individual has the opportunity to meet their needs through socially useful actions. It is substantiated that the recipients of institutional transformations should be authorized persons (or groups of persons) who will be responsible for collecting information and distributing internalization payments.

internalization, negative externalities, old industrial production models, institutional support, formal institutions, informal institutions, regulatory system.


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