The Effects of Rent-Seeking Behavior on the Efficiency of Fiscal Policy in Ukraine

The paper analyses the distinctive features of fiscal regulation of Ukrainian economy as a crucial factor of ensuring national security. The authors reveal the structure of fiscal policy transmission mechanism and highlight the peculiarities of its channels under macroeconomic stabilization. The theoretical and empirical analysis unveils certain obstacles that arise in the Ukrainian economy on the way to establishing macroeconomic efficiency of its fiscal impulses. The most important obstacles of such sort are formation of rentier economy and counterproductive rent-seeking behavior of economic actors. The study of this phenomenon and of their influence on the efficiency of fiscal policy instruments in national economy made it possible to suggest a number of practical recommendations. These recommendations cover bureaucracy reduction, improvement in efficiency and transparency of public administration, provision of clear specification of property rights, implementation of civilized justice system, and enhancement of possibilities for public control of budget spending and use of public property and assets. (C) 2015 The Authors. Published by Elsevier B.V.