Viktor Koziuk,

Ternopil National Economic University, Ternopil, Ukraine

E-mail: viktorkoziuk@tneu.edu.ua

Crony sectors as a barrier to economic well-being and ecologization (case of Ukraine)

Oleksandr Dluhopolskyi,

Ternopil National Economic University, Ternopil, Ukraine

E-mail: dlugopolsky77@gmail.com

Antonina Farion,

Ternopil National Economic University, Ternopil, Ukraine

E-mail: a.farion@tneu.edu.ua

Tetiana Dluhopolska,

Ternopil National Economic University, Ternopil, Ukraine

E-mail: tetianadluhopolska@gmail.com

Abstract. This paper investigates the relationship between oligarchic economies and the crony sector development, which includes industries with the dominating rent-seeking behavior. In order to analyze the period from 2006 till 2016, cross-countries’ data on the Power Distance Index, Crony Capitalism Index, Sustainable Society Index, among with the environmentally related taxes are referenced. Regression analysis for the distance to power and dependence on crony capitalism is carried out with a focus on the relation between crony capitalism and ecologization. Existence of a vicious cycle associated with hierarchical tolerance and barriers towards ecologization in modern welfare economics, is debated. Conclusions are made concerning the cultural and social factors having their direct impact on the existence of crony sectors and functioning of weak institutions.

Received: October, 2017

1st Revision: Febraury, 2018

Accepted: May, 2018

DOI: 10.14254/2071-789X.2018/11-3/7

JEL Classification: A13, H14, I31, P50

Keywords: oligarchy, crony-sectors, ecologization, institutions, well-being, environmental taxes