"Economic Policy Review" Bulletin ISSN 1313 - 0544


In October 2016 the IME and the Friedrich Naumann Foundation for Freedom launched "My taxes" - a specialized online which can be accessed on the kolkodavam.bg website. Now we are happy to announce that the webpage is already available in English!

Why Does the Fight Against Corruption in Bulgaria not Give Results

Lubomir Avdjiiski / 18.07.2016
It wouldn’t be exaggerated to say that corruption is the Number 1 problem of Bulgaria in a political, economic and social aspect. According to a recent study of the European Parliament, Bulgaria loses between 14 and 22 percent of its GDP every year due to corruption practices. Taking into consideration the scale of the problem in Bulgaria and its sustainability in time, the Institute for Market Economics (IME) has decided to analyze the anticorruption policies in the country, as well as the institutions dedicated to fighting and preventing corruption.

Analysis by IME: Management and Budget of the Judiciary

Between the years 2000 and 2016 the budget of the judiciary has increased 5.5 times compared with a threefold increase of the state budget for the same period. At the same time Bulgaria ranks second in terms of the number of magistrates per capita among all EU member states. These statistics have provoked the Institute for Market Economics to produce an analysis of the budget and overall resource management of the judiciary. The aim of this analysis is to determine the effectiveness of resource management in the judiciary and also the transparency and rationality of the budgeting process.

Migration to Sofia is Comparable to External Migration

Yavor Aleksiev, Bozhidar Radev* / 15.06.2016
On the background of the frequently discussed data about the external migration of the population, the migration processes in the country itself are often left aside from the public interest. The examination of the data from NSI (National Statistical Institute) for the period between 2007 and 2015 shows, that 79% of the migration is actually internal for the country and migration toward the capital is 2.7 times lower than the total migration toward the other 27 districts.

Exploring the Financial State of Bulgarian SOEs

The financial position of SOEs as a whole has remained bad in recent years - profits are falling, returns are low and even negative in the top ten enterprises and the indebtedness of major players is growing rapidly.

The Successes and Failures of Bulgarian Municipalities

Close to 70% of the expenses of Bulgarian municipalities can be classified as „failures”, while only 5% can be considered successful. The rest, about a quarter of the activities, the execution of which doesn’t allow for a classification for either category, are considered as “unclassified”. This is shown by an in-depth IME review of the audit reports of the Bulgarian National Audit Office. The reports contain data for 83 municipalities and their expenses for over 6 billion BGN for the 2011-2014 period.

Which Municipalities Absorb the Most EU Funds

Yavor Aleksiev, Bozhidar Radev* / 15.06.2016
The current inability of Bulgarian municipalities to carry out independent fiscal policy leaves EU funds as the only option for financing local projects. The prior statement is especially true for undertakings, which require significant capital investment, such as building a sewage-treatment plant. It goes without saying that the efficiency of the use of EU funds depends highly on how and for what purpose they are spent. This means that 1 million BGN spent in one municipality may lead to greater benefits than 10 million BGN spent in another. Therefore, the actual amount of operational program funds, provided for municipalities as beneficiaries, is one of the main indicators of the success or failure of municipal administrations – if nothing else, at least it is a signal of activity and administrative capacity.

Economic Populism in Bulgaria and Its Consequences

What if I told you that the poorest EU member state is a country in which economic populism is more often the rule of a thumb, rather than an exception? Would that surprise you, or would you think it is a fate just deserved by both the Bulgarian public and its government? Sure, when it comes to populism within the EU, Bulgaria seems like an OK place to be when compared to countries such as Greece and (arguably) Hungary. However, some recent developments have brought forward the question whether Bulgaria (the country which back in 2011-2012 was viewed as an example of fiscal responsibility in the heat of the European debt crisis), is going the right way, or has reversed course back to the well-charted, yet strangely endearing seas of cheap economic populism.