SECTORAL MANAGEMENT PROBLEMS OF THE SUSTAINABLE DEVELOPMENT OF THE BUSINESS SYSTEM IN THE KARABAKH ECONOMIC REGION

Abstract

The article analyzes the formation of business systems and the impact of sectoral governance on economic development processes in post-conflict regions from both theoretical and practical perspectives. The main objective of the study is to evaluate the effectiveness of institutional governance models in post-conflict conditions and to identify optimal development approaches for the Karabakh Economic Region. Within the research, the post-conflict experiences of Bosnia and Herzegovina, Rwanda, and Colombia were comparatively examined, and the effects of governance models on economic recovery were assessed through cause-and-effect relationships. 
The findings reveal that the level of institutional coordination, consistency of public policy, promotion of local entrepreneurship, and integration of international support mechanisms are key determinants of economic development in post-conflict regions. The article systematically investigates the fiscal, monetary, and legal incentive mechanisms implemented in the liberated territories, as well as financial flows within the framework of the “Great Return” Program. Furthermore, infrastructure 
reconstruction, the establishment of logistics and industrial zones, the implementation of tax and customs incentives, and policies aimed at human capital development are evaluated as essential 
components of economic reintegration. The study also analyzes the impact of public investments on economic activity, the structure of financing sources, and the directions of investment flows based on statistical indicators. As a scientific contribution, the conceptual foundations of a phased and hybrid sectoral governance model for the Karabakh Economic Region are developed, proposing an approach based on the integration of 
centralized governance and local participation. The results of the study indicate that the expansion of the digital economy, the strengthening of institutional stability, and the optimization of investment incentives play a significant role in ensuring the region’s sustainable socio-economic development. The practical significance of the article lies in providing scientifically grounded recommendations for the formation of a sustainable business environment and the development of effective governance mechanisms in post-conflict regions.