Structural Transformation and Post-Conflict Economic Recovery: Institutional Capacity and Innovation-Driven Growth in Transitional Economies

Abstract Post-conflict economic recovery represents one of the most complex challenges within contemporary development economics. Transitional economies emerging from armed conflict face infrastructural destruction, capital flight, institutional fragility, labor displacement, and reduced investor confidence. Yet historical experience demonstrates that periods of reconstruction may also create opportunities for structural transformation and innovation-driven growth. This study analyzes the relationship between institutional capacity and structural economic transformation in post-conflict transitional economies, with particular focus on Eastern European contexts. Emphasis is placed on innovation ecosystems, human capital mobilization, sectoral reallocation, and governance reforms supporting sustainable recovery. The objective is to conceptualize post-conflict recovery not merely as restoration of pre-crisis economic structures but as strategic reconfiguration toward diversified and innovation-oriented development trajectories.