Analyzing the Impact of Social Cohesion on Economic Development

The article is dedicated to the analysis of the dynamics of the social capital index and key macroeconomic indicators of Ukraine and the European Union countries from 2013 to 2023. The aim of the research is to identify differences in the nature of the formation of social cohesion and its relationship with economic development. The study uses the social capital indicator from the Prosperity Index (Legatum Institute), which combines assessments of interpersonal trust, civic engagement, social connections, and tolerance. Data analysis shows that in the EU countries, especially in Central and Eastern Europe, the growth of social capital has a systemic, evolutionary character, accompanied by a stable increase in GDP per capita, a decrease in unemployment, and controlled inflation. Such dynamics indicate the efficiency of long-term structural reforms and the implementation of cohesion policies that create a favorable institutional environment, reduce transaction costs, and stimulate investment. The experience of these countries confirms a bilateral causal relationship between social cohesion and economic growth. In Ukraine, the highest growth rates of social capital have been recorded among the studied countries, especially after 2020. However, this growth is predominantly reactive in nature, driven by the mobilization response of society to the COVID-19 pandemic and the full-scale war, and is not accompanied by a significant improvement in basic economic indicators. High GDP volatility, increased inflation rates, and a vulnerable labor market indicate a lack of a solid economic foundation for the sustainable development of cohesion. This highlights the necessity for institutional consolidation of mechanisms for participation, trust, and solidarity to transform social cohesion into an effective factor for long-term economic growth and increased resilience to external shocks.