Economic Transformation in Poland and Ukraine When Poland and Ukraine introduced their political, social and economic system reforms at the beginning of the 1990s, both economies were at a similar level of economic development (GDP $9,500 per capita). However, in 2018, Ukrainian GDP per capita had remained at the same level since 1991, while in Poland, it had increased significantly, to more than $27,000 per capita. This book assesses the reasons for the growing gap between the level of economic development in Ukraine and Poland. It examines the course of events and evaluates the effectiveness of the system transformations, both in the context of the economy, as a whole, and in individual regions (Polish ‘voivodeships’ (provinces) and Ukrainian ‘oblasts’). It also analyzes the con- sequences of the 2008–2009 Ukrainian-Russian gas conflict and 2013–2014 Euromaidan events for the Ukrainian economy. Additionally, the authors offer an insight into the migration movements, which have recently been observed in Poland and Ukraine. This is the first comprehensive, comparative analysis concerning the spa- tial diversification of economic development in these two countries, and the authors highlight the ways in which these reforms have proved effective in Poland and hardly effective in Ukraine. This analysis helps to identify the basic interrelations between the core macroeconomic variables at the regional level and the impact of political events from both a national and regional perspective. The book will appeal to academics, researchers and policy makers in- terested in the economic and political changes in these two countries, in a comparative setting and on national and regional levels, as well as those working on issues of EU integration. Rafał Wisła is Professor at the Department of Economics and Innovation of the Jagiellonian University, Krakow, Poland. Andrzej Nowosad is Assistant Professor at the Institute of Journalism, Media and Social Communication of the Jagiellonian University, Krakow, Poland. Routledge Studies in the European Economy 52 Digital Transformation and Public Services Societal Impacts in Sweden and Beyond Edited by Anthony Larsson and Robin Teigland 53 Economic Policy, Crisis and Innovation Beyond Austerity in Europe Edited by Maria Cristina Marcuzzo, Antonella Palumbo and Paola Villa 54 The Economics of Monetary Unions Past Experiences and the Eurozone Edited by Juan E. Castañeda, Alessandro Roselli and Geoffrey E. Wood 55 Economic History of a Divided Europe Four Diverse Regions in an Integrating Continent Ivan T. Berend 56 The Political Economy of Independence in Europe Hana Lipovská 57 The European Monetary Union After the Crisis From a Fiscal Union to a Fiscal Capacity Nazaré da Costa Cabral 58 Empirical Macroeconomics and Statistical Uncertainty Spatial and Temporal Disaggregation of Regional Economic Indicators Mateusz Pipień and Sylwia Roszkowska 59 Economic Transformation in Poland and Ukraine National and Regional Perspectives Edited by Rafał Wisła and Andrzej Nowosad For more information about this series, please visit www.routledge.com/ series/SE0431 Economic Transformation in Poland and Ukraine National and Regional Perspectives Edited by Rafał Wisła and Andrzej Nowosad LONDON AND NEW YORK First published 2020 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 52 Vanderbilt Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2020 selection and editorial matter, Rafał Wisła and Andrzej Nowosad; individual chapters, the contributors The right Rafał Wisła and Andrzej Nowosad to be identified as the authors of the editorial material, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. The Open Access version of this book, available at www.taylorfrancis.com, has been made available under a Creative Commons Attribution-Non Commercial-No Derivatives 4.0 license. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Names: Wisła, Rafał, editor. | Nowosad, Andrzej, editor. Title: Economic transformation in Poland and the Ukraine / edited by Rafał Wisła and Andrzej Nowosad. Description: 1 Edition. | New York : Routledge, 2020. | Series: Routledge studies in the European economy | Includes bibliographical references and index. Subjects: LCSH: Economic development—Poland. | Economic development—Ukraine. | Poland—Economic policy—1990– | Ukraine—Economic policy—1991- | Labor mobility—Poland. | Labor mobility—Ukraine. Classification: LCC HC340.3 .E3236 2020 (print) | LCC HC340.3 (ebook) | DDC 338.9438—dc23 LC record available at https://lccn.loc.gov/2020026874 LC ebook record available at https://lccn.loc.gov/2020026875 ISBN: 978-0-367-48493-4 (hbk) ISBN: 978-1-003-04137-5 (ebk) Typeset in Times New Roman by codeMantra The publication was funded by the Priority Research Area Society of the Future under the program “Excellence Initiative – Research University” at the Jagiellonian University in Krakow. Contents List of figures vii List of tables xiii List of maps xv List of contributors xix Introductory remarks xxiii RAFAŁ WISŁA AND ANDRZEJ NOWOSAD Acknowledgements xxix 1 Institutional conditions for the functioning of the Polish and Ukrainian economies 1 ANDRZEJ NOWOSAD, UMIT TURANLI AND RAFAŁ WISŁA 2 Ownership transformations in Poland and Ukraine 25 SVITLANA CHUGAIEVSKA, RAFAŁ WISŁA AND ANDRZEJ NOWOSAD 3 Structural changes in the Polish and Ukrainian economies against the background of other Central and Eastern European countries 41 RAFAŁ WISŁA, SVITLANA CHUGAIEVSKA, ANDRZEJ NOWOSAD AND UMIT TURANLI 4 The demographic potential of Polish voivodeships and Ukrainian oblasts 57 NATALIIA CHUGAIEVSKA, OLEKSII KELEBAJ AND TOMASZ TOKARSKI 5 The economic potential of Polish voivodeships and Ukrainian oblasts 86 NATALIIA CHUGAIEVSKA, OLEKSII KELEBAJ AND TOMASZ TOKARSKI vi Contents 6 Product market structures 100 KATARZYNA FILIPOWICZ, TOMASZ TOKARSKI AND TITUS FERENC 7 Determinants of the spatial differentiation of labor markets in Poland and Ukraine 127 PAWEŁ DYKAS, TOMASZ MISIAK AND TOMASZ TOKARSKI 8 Simulations of voivodeship and oblast development trajectories. An analysis based on the gravity growth model 155 SVITLANA CHUGAIEVSKA, KATARZYNA FILIPOWICZ, TOMASZ TOKARSKI AND RAFAŁ WISŁA 9 The spatial differentiation of migration in Poland and Ukraine 199 NATALIIA CHUGAIEVSKA AND DANIELA SZCZEPANIAK 10 Spatial differentiation of the economic development of Polish voivodeships and Ukrainian oblasts 223 MONIKA BOLIŃSKA AND OLESIA CHORNENKA Poland – Ukraine: key findings 246 RAFAŁ WISŁA AND ANDRZEJ NOWOSAD Bibliography 253 Index 263 Figures 3.1 GDP per capita in Poland and Ukraine between 1990 and 2018 (USD, PPPs, in 2011 prices) 42 3.2 Consumer price index (2010 = 100), Poland and Ukraine, 2010–2017 43 3.3 Changes in the gross added value of the industrial sector (ISIC: 10–45) in GDP (in %), Poland and Ukraine 44 3.4 Changes in the gross value added of the industrial sector (ISIC: 10–45) in GDP (in %), 1995–2017, The Baltic states and Ukraine 44 3.5 Changes in the gross value added of the industrial sector (ISIC: 10–45) in GDP (in %), 1995–2017, The Visegrád group and Ukraine 45 3.6 Changes in the gross value added of the industrial sector (ISIC: 10–45) in GDP (in %), 1990–2017, Bulgaria, Romania, Russia and Ukraine 45 3.7 Changes in the gross value added of the agricultural sector (ISIC: 1–5) in GDP (in %), 1995–2017 46 3.8 Changes in the gross value added of the agricultural sector (ISIC: 1–5) in GDP (in %), 1995–2017, the Baltic states 47 3.9 Changes in the gross value added of the agricultural sector (ISIC: 1–5) in GDP (in %), 1995–2017, the Visegrád Group 48 3.10 Changes in the gross value added of the agricultural sector (ISIC: 1–5) in GDP (on %), 1990–2017, Bulgaria, Romania, Russia and Ukraine 48 3.11 Investment rates of Ukraine, Poland and the Baltic states, 1995–2018 (%) 50 3.12 Investment rates of Ukraine and Visegrad group countries, 1995–2018 (%) 51 3.13 Investment rates of Ukraine, Poland, Bulgaria, Russia and Romania, 1995–2018 (%) 52 viii Figures 3.14 Changes in the share of R&D expenditures in GDP (in %), 1996–2017, Poland and Ukraine 53 3.15 Changes in the share of defense spending in GDP (in %), 1993–2017, Poland and Ukraine 54 4.1 Population in groups of voivodeships, between 2004 and 2017 (million people) 62 4.2 Urbanization rates in 2005–2017 (%) 70 4.3 Population in groups of oblasts, between 2004 and 2017 (million people) 76 4.4 Population in groups of oblasts, between 2004 and 2017 (million people) 79 4.5 Village population in oblast groups in 2004–2017 (million people) 80 4.6 Urbanization rates in oblast groups in 2004–2017 (%) 83 5.1 GDP in voivodeship groups in 2004–2016 (PLN billion, according to 2015 prices) 88 5.2 GDP per capita in voivodeship groups in 2004–2016 (PLN, in thousands, according to 2015 prices) 90 5.3 GDP in oblast groups in 2004–2017 (UAH billion, according to 2016 prices) 93 5.4 GDP per capita in oblast groups in 2004–2017 (UAH, in thousands, according to 2016 prices) 97 6.1 Gross value added in agriculture in voivodeship groups in 2004–2015 (PLN billion, according to 2015 prices) 101 6.2 Share of gross value