Analysis of the role of state institutions in shaping the legal framework for the transition to a circular economy in the context of global challenges

Abstract

The transition to a circular economy is a key response to global challenges related to resource depletion and environmental pollution; however, its success directly depends on the effectiveness of the legal frameworks established by state institutions. National legislation often suffers from fragmentation, internal contradictions and insufficient alignment with international standards, which creates barriers to the adoption of innovative business models. The aim of this study is to analyze the role of state institutions in shaping the legal environment for the transition to a circular economy and to assess the impact of different regulatory approaches on practical outcomes. A comprehensive methodology was applied, based on comparative legal studies, content analysis of statutes and strategic documents from several countries, and statistical analysis of empirical data. Expert interviews with government officials were conducted, and corporate reports were analyzed to evaluate real-world practices. Key metrics for quantitative analysis included the waste recycling rate, volume of secondary material use, share of green investments and the environmental law stringency index, each compared against the level of interagency coordination. The study’s findings demonstrate a direct correlation between the quality of legal regulation and success in achieving circularity. For example, a country with a higher environmental law stringency index (0.86) shows significantly better waste recycling rates (58,4%) compared to a country with an index of 0.68 (42,7%). Similarly, a high level of interagency coordination (coefficient 0.79) correlates with a larger share of green investments in the economy (19,2%), versus 11,5% at a coordination coefficient of 0.52. This confirms that isolated legal provisions without systemic support and coherence are largely ineffective. The analysis proves that state institutions play a decisive role as catalysts for the transition to a circular economy. The effectiveness of legal regulation is determined not so much by the strictness of individual rules as by their systemic coherence, transparency and complementary economic incentives. To achieve sustainable results, a comprehensive approach is needed in which the state not only creates the legislative foundation but also ensures interagency coordination, supports innovation and fosters stable conditions for long-term investment in green technologies.