A new study by economists with the Institute for Market Economics (IME) in Sofia, Bulgaria, using the latest OECD data, finds that the government sectors in OECD (developed countries) are too large relative to their private sectors to maximize economic growth. Economists have long known that the government sector can be too small or too large to maximize economic growth, job creation, and the social welfare of its citizens. Governments that do not adequately protect the people and their property and the rule of law may be too small, while governments whose size and inefficiencies cause a misallocation of resources are too large.
The Optimum Size of Government
Budget Heritage of the New Government
European and national elections have finished and the new government has been formed. Because there is rarely vacuum in the executive on such a level (the recent crisis in Belgium was yet such an example), the next government, as all preceding ones, will have to take over the government of the country from where it has been left. Or in other words, it is important not only which political party has actually won the elections, but also what economic and institutional conditions it has inherited from the previous one/ones.
10 Facts about the Unneeded Bank
There are a lot of talks about the role of Bulgarian Development Bank (BDB) in the national economy. Many great hopes rely on it about "supporting" the awkward business in a period of crisis. IME had already made some publications about the effect of existence of the previous "Encouragement bank" and today's Bulgarian Development Bank (BDB), but the public debate provokes the need of systematizing and pointing the facts for the essence of the existence of a bank like BDB...
IME - "Bulgaria in International Rankings - 70 Reccomendations for Prosperity"
The main goals of this analysis "BULGARIA IN INTERNATIONAL RANKINGS - 70 Recommendations for Prosperity" are to show where Bulgaria stands, to offer an overview of her advancement through the years, of the opportunities for reform, and to suggest recommendations which, if applied in practice, would bring about higher prosperity and standard of living, and would ease up the country's efforts to handle the crisis.
The Balance of Payments until May: Conclusions for the New Government
This week was published the data for the balance of payments for the first 5 months of the year. They confirm the tendency, which emerged at the beginning of the year, for decrease of the current account deficit (the good news), but in the same time a significant decrease of the direct foreign investments and capital outflow from the country (the bad news).
Expenditures of the Triple Coalition in Bulgaria
...Data give a good reason to look back in time and see what happened with public finance throughout the whole mandate of this government (starting from the elections in June 2005). For this purpose, we will use data on the fiscal reserve of Bulgaria at the end of each month during the mandate of the triple coalition. Simply said, when there is a rise in the fiscal reserve, then the government has collected more than it has spent, whereas when there is a decline in the fiscal reserve, then the government has spent more than it has collected.
Bulgarian Tourism's Failed Advertising Campaign
...In the last week the outgoing chairman of the National Tourist Agency confirmed that there was no increase of the number of Bulgarian tourists at the native resorts - a fact that makes this campaign a failure. Despite the millions invested in advertising, the product remains at the well-known low quality and Bulgarians in large numbers prefer to spend their vacation abroad. It is highly probable that the result of similar series of ads for non-Bulgarian tourists would be the same as the whole market relies on many other beyond of influence of whosoever.
IME - "Local Business Environment Index"
For the first time in Bulgaria we have researched the local business environment. IME has developed a methodology, conducted a survey and after reviewing pertinent conditions has ranked regional cities.