Business consulting development in Ukraine: the problem of rent-seeking and its solution

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Business consulting development in Ukraine: the problem of rent-seeking and its solution

Journal Title: Економічна теорія та право - Year 2018, Vol 4, Issue 35

Abstract

Existence of a non-market component in the structure of competition and expansion of rent-seeking in Ukraine lead to the distortion of a competitive policy of some consulting firms and the content of some consultations provided. Recent research and publication analysis. N. K. Amelina, Yu. M. Atamanchuk, I. I. Vinnikova, B. S. Huzar, I. V. Dovba, T. H. Dudar, V. Yu. Klevianyk, O. V. Klenin, I. S. Klymenko, K. V. Kovalska, Ye. A. Kuznietsov, O. S. Marchenko, S. V. Marchuk, O. M. Taranukha, I. I. Cherleniak, O. V. Shupylo, et al. examine peculiarities of consulting in Ukraine and issues of its development. A competitive policy, tactics of some consulting firms, and some advising are distorted due to expansion of rent-seeking. Therefore, the article is aimed at researching these deformations. Paper objective. The paper objective is to characterize issues of development of business consulting in Ukraine related to expansion of rent-seeking and usage of non-market methods of competition and to propose ways for overcoming these issues. Paper main body. Over the past ten years, the market of consulting services in European countries has extremely increased. Its pace of growth is four times higher than a pace of the GDP growth. In Ukraine, the sphere of business consulting is also potentially able to show high-paced growth. Existence of non-market methods of competition as well as expansion of rent-seeking result in emergence of a set of issues. Particularly, consulting firms, which try to compete by using market methods, sometimes lose a battle to organizations applying non-market methods and competitive quasiadvantages. In addition, sometimes there is a need to take into account non-market and corruptive components in the process of preparation of recommendations. Under such conditions, considerable experience of western business consulting appears to be not always useful. Hence, some of the Ukrainian firms should waste resources to develop own methodology. To tackle rent-seeking and non-market methods of competition, the author propose: to ensure restraining activity of economic industries and functions of public administration, which generates illicit and non-market incomes; to deregulate the economy; to implement anti-corruption reforms of governmental bodies, initially law enforcement agencies; to provide real government accountability to the people of Ukraine. Conclusions. The formation of market conjuncture being inherent to developed countries is the main pre-condition for development of the Ukrainian business consulting sector along the lines of the mentioned countries. In terms of current economic conjuncture, the consulting firms should focus on those spheres and directions of activity that are least influenced by non-market methods of completion and corruption. Short abstract for an article Abstract. The author has disclosed distortions, which affect a competitive policy of some consulting firms and the content of some consultations due to expansion of nonmarket methods of competition and rent-seeking. The author has proposed a complex of measures used to tackle rent-seeking and non-market methods of competition in order to develop business consulting being able to learn from the best western experience and to adhere to standards of the law-governed economy.

Authors and Affiliations

Кирил Григорович Губін

Keywords

business consulting; rent-seeking; competitive advantages; system of revenue formation; tackle corruption.

EP ID EP468959
DOI 10.31359/2411-5584-2018-35-4-124
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