The article highlights the problem of Ukraine's competitiveness as a derivative of low-quality higher education, which represents a wide range of students and graduates of domestic higher education institutions. It is noted that without the solution of the actualized problem, the successful civilized development of Ukraine is impossible. It is proposed to assess the quality of higher education in the context of global, regional and social challenges to be overcome by Ukraine based on sustainable development provided by the competitive human capital. The paradoxical tendency is emphasized: the quality of domestic higher education is declining against the background of institutional reform of higher education, carried out with a focus on best practices, and standards of Western European universities following the Bologna Process. It has been proved that it is impossible to raise the quality of domestic higher education to the level of world requirements through the internal reforms alone without a proper change in the Ukrainian social context, such as Western European countries. The basic features of the societies of the Western countries are determined, using which they radically differ from Ukraine and thanks to which their quality of higher education meets modern world requirements and makes them leaders of the world community. The indicators testifying to the low competitiveness of Ukraine and its lag in the development of civilization are given. It is substantiated that the determining reason for Ukraine's lag in the world race is the neglect of human capital as a basic factor in ensuring the competitiveness of the state. It is pointed out that this is caused by the destructive action of the mechanism of negative social selection, one of the manifestations of which is the protectionism of incompetence, which is systematically cultivated in modern Ukrainian society and does not encourage the general public to acquire competitive competence in civilized labour markets. The protectionism of incompetence is interpreted not only as facilitating the employment of less competent persons in comparison with other applicants for a certain position but also as unjustified removal from positions of persons who correspond to the position and retaining incapable students. Alternatively, they do not seek to obtain quality higher education, as well as tolerance for all kinds of academic dishonesty, falsification of learning outcomes. The causal chain is defined, the conceptual essence of which is that the mechanism of negative social selection in Ukraine is caused by the lack of a civilized competitive environment, the formation of which is blocked by the monopolization of political and economic spheres of social activity. This situation in its turn was caused by the hybrid regime of oligarchic power and the absence of a real democratic state governed by the rule of law in in Ukraine. The comparative analysis of economic growth in Poland and Ukraine confirmed significantly higher productivity of the pluralistic economy, produced by numerous medium and small businesses, than the monopolized economy of several oligarchs, which paralyzed Ukraine's socio-economic development and doomed it to backwardness and stagnation. The mechanism of rapid stratification of Ukrainian society, which created social inequality and contributed to the capture of its state by oligarchic-clan groups for its use for private purposes against the interests of the people, is highlighted. It is pointed out that oligarchs-controlled regimes of power by the iron law of oligarchy, defined by R. Michels, are not subject to improvement, but only lead society to decline and degradation. It is explained that after the oligarchs took control of the state as a public institution of power, Ukraine fell into a vicious circle formed by extractive political and economic institutions. In contrast, inclusive institutions form a virtuous circle that contributes to the successful civilized development and prosperity of the nation. It is possible to break the vicious circle and include mechanisms of healthy social selection, which would block the protectionism of incompetence in its territory and promote the vigorous development of competitive human capital and raise the quality of domestic higher education to the level of world requirements in Ukraine. To fulfil that, it is necessary: to close the lack of effective systemic control by the people, in particular civil society, over the current activities of government entities at all its hierarchical levels and mechanisms for their inevitable prosecution for incompetent use of power and its abuse. For this, in Ukrainian society, it is necessary to separate business from politics, to demonopolize the political and economic spheres of activity, to form a civilized competitive environment, to create the most favourable conditions for the accelerated development of medium and small business. World experience eloquently demonstrates that all this becomes achievable in a democracy and the rule of law. Only under such conditions will a competitive competence be demanded in Ukrainian society, for the provision of which Ukrainian universities will be forced to compete and thus develop to the level of world requirements.
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