Role of natural resource potential in economic growth of ukrainian economy: institutional dimension

Natural resource use gives rise to public and private goods and services in national economy. Decision making in large corporations involved in the extraction and processing of natural resources in Ukraine, based on generation of profit, is the legitimate possibility of transferring responsibility and payment for environmental pollution and depletion of natural resources to the state. And the lack of «fair» money value of natural resources and ecological damage results in excessive production of private welfare with a minimum production of public welfare. As a result the disproportions accumulate that endanger a possibility of long-term economic growth. In the present work the characteristics of natural resources as welfare are presented, namely, physical, social, and economic ones. Twotrajectories form the theoretical framework of the model of economic development in Ukraine. The first trajectory is oriented to the law of propertythat can be established in the market of externalities. The second trajectory of ecological economy is the approach of balance materials, which characterize the limits of development by entropy. At the same time, peculiarities of failures of environmental management in Ukraine are substantiated. Failures of the market and failures of the government are identified. The choice of the method for transformation of a natural resource into welfare depends on a number of factors. These factors are: scientific and technological advance, the existing technologies of production, the access to required investment, institutional standards (legislations, traditions, culture, religion, etc.), the knowledge of methods of resource consumption and the amount of resource used in the course of production and consumption. Requirements and desires of resource consumers can vary with time and space and are of particular importance in choice. It is necessary to consider the transformation of a natural resource into welfare from the viewpoint of economic, social, and ecological components. Their correlation depends on the potential of the natural resource, applicable technologies, and acting institutions (formal and informal ones). The model for estimation of the effect of natural resources on economic growth is presented. The model includes the level of satisfaction of consumer needs and used fuel and energy resources. By the extension method, we present a multi-factor model accounting of economic, environmental, and social components of economic growth. The results of the assessment of economic, social, and ecological components of economic growth demonstrate a uniform increase in size of the economic component.