Institutional capital of a region in a circular economy


The formation and development of the Russian economy and, accordingly, the economies of regions with a digital focus on a circular economy is determined by many factors, among which the most important is how institutional capital functions, personified by various institutions - scientific institutions and organizations representing fundamental and industrial science, educational structures , the institution of intellectual property, venture capital firms, technology parks, innovatively active enterprises, financial institutions, among which the basic ones are banks, government agencies that develop the foundations of innovation policy at the macro level, at the level of regions and industries.

As Russian practice shows, the existence of these institutions in itself does not provide institutional capital, which is determined not so much by what is in statics, but by how it functions in dynamics.

Therefore, the main thing should be the formation of an integral mechanism of a closed-cycle economy, which makes it possible to create effective interconnections of these institutions, reducing their potential into significant results of the development of the region..

Development economics trajectory.
Figure 1. Development economics trajectory. 


Circular economy, institutional capital, regional institutional capital, regional institutional capital matrix

Research question

  • The influence of the circular economy on the formation of the institutional capital of the region.
  • The effective functioning and development of the region should be considered not only from the standpoint of the economic system with all its immanent properties, but also as an institutional system, since these systems are coherent.

Main method

It was previously noted that current production and consumption practices are unsustainable, and cities have an important role to play in rethinking how they handle waste and rethinking their supply chains. Cities are characterized by density of population and the proximity of all participants - individuals, business and civil society. It provides an ideal environment for testing and implementing innovative closed-economy models that are changing the way citizens and city leaders think about the use and production of city services and resource consumption [2].

The research was carried out on the basis of a neo-institutional approach, statistical analysis and synthesis.

Figure 2. Levels of abstraction
Figure 2. Levels of abstraction

Figure 2

Main results

The author's definitions of the institutional capital and institutional capital of the region are given, the matrix of the institutional capital of the region is developed, the position on the influence of the circulation economy on the institutional capital of the region is substantiated.

Figure 3. Circular economy in cities. Source- (Circle Economy, TNO and Fabric, 2016).
Figure 3. Circular economy in cities. Source- (Circle Economy, TNO and Fabric, 2016).

Main conclusion

With the rapid growth of urbanization in regions, the need for additional resources will only increase, which means an unreasonable increase in waste. Therefore, the current linear model "produce, use, dispose" is wasteful in its meaning, while the emerging offices of the circular economy are already making it possible to launch this conceptual model, both in individual industries and in the economy as a whole, in order to preserve value and resource optimization. According to the authors of the article, this is the new institutional capital of the region, which presents a new alternative in opposition to the accumulation and growth of waste in the world.

In this regard, the formation of a closed-cycle economy mechanism makes it possible to create effective relationships between various kinds of institutions with high potential. Thus, increasing the institutional capital of the region, as a result of the functioning and development of the institutional system of the circulation cycle economy.


  1. Françoise Bonnet. Advancing local circular economies by moving to zero waste, Retrieved September 18, 2021
  2. Circular Economy in Cities: Evolving the Model for a Sustainable Urban Future. World Economic Forum, Retrieved September 18, 2021


Tatyana Stepanova, Doctor of Economics, Professor, Head of the Department of Agricultural Economics and Fisheries, Kaliningrad State Technical University, RUSSIA.

Ruslan Polyakov, Ph.D.  Assoc. Professor, Docent, Department of Economics and Finance, Kaliningrad State Technical University Kaliningrad, RUSSIA.  

Pavel Kovalishin. Ph.D.  Assoc. Professor, International Relations Department, Kaliningrad State Technical University, Baltic Fishing Fleet State Academy, RUSSIA.

Last modified: 2021-10-19