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In the planned Soviet economy, agricultural enterprises in Ukraine played a significant role inmaintaining social infrastructure in rural areas. The state insisted that these enterprisesprovide medical care, transport infrastructure, kindergartens, schools and housing, as well asfood supplies.Over the course of transition, the economic and political conditions of agricultural enterpriseshas drastically changed. The state greatly reduced financing for rural social infrastructure.Additionally, agricultural production significantly fell. As a result, the agricultural enterprisespartially cut their support of social infrastructure in the rural areas, and in some cases, evencompletely depleted it.At the same time, the living conditions of the rural population deteriorated. Food prices roseso dramatically that food demand started to be increasingly covered from private householdplots. Further, the quality of medical services could not satisfy the needs of the ruralpopulation, and the lack of financing made it impossible to maintain the transportinfrastructure. A legal, compulsory transfer of the social infrastructure from the agriculturalenterprises to the respective communities resulted in the infrastructure's dilapidation. Inaddition, the rural population faced new social risks such as unemployment.As a result of this tense situation in the rural areas of Ukraine, the goal of this dissertation isto discuss the changes of social and economic functions of the agricultural enterprises in thecourse of transition by surveying 72 successors of the former kolkhozes and sowchoses inSumy Oblast. Based on this case study, and a historical analysis of agricultural structures andthe social security system, the following phenomena were identified:(1) In spite of the positive expectations of western experts, even after ten years of transitionthe agricultural enterprises in Ukraine demonstrate constancy in terms of their sizemeasured in hectares, livestock herd and employment, and in terms of using farm assetscollectively.(2) Despite economic difficulties, the agricultural enterprises continue providing socialservices. Moreover, the profitable enterprises provide more social financing per worker.(3) The number of workers was reduced, but in comparison to the new German federalstates, which have a similar agrarian structure, and in comparison to other transitioneconomies like Czech Republic and Hungary, for instance, the agricultural enterprises inUkraine still employ a high number of labour per hectare.A theoretical analysis of this phenomenon was conducted from both an economic andsociological perspective. In the economic literature, the methods of institutional economictheory are especially suited to explain the above mentioned phenomena since informalinstitutions prevail over formal ones. The institutional economic theories also suit thesociological analysis. Here, the focus lies on the decision-making behaviour of actors dependent on the interplay of individual actions. In this respect, historically-developednetworks play a very important role, especially under difficult general economic conditions.To ensure the improvement of agricultural enterprises' competitiveness, and to provide fairliving conditions in the rural areas, the social security system in Ukraine should be reformedin order to address these new risks. In this way, agricultural enterprises could partially pass ontheir social responsibility. It is also necessary to fundamentally re-orient the communityadministrations to fulfil their responsibilities not only formal. Finally, the managers of theagricultural enterprises in Ukraine should realise that only after operating profitably wouldthey be able to fulfil their social goals, whereas the rural population has to realise that it is notlonger possible to provide social services without payments.
