Issue 6, 2002

This paper debates the foundations of the principles of macroeconomic policy. It traces through the development of the ideas forming the macroconomic policy and especially the cyclical transition from observance of firmly established rules to discretion and vice versa, to curbing freedom at formation of macroecnomic influences. Reasons are brought forward backing the advantages and disadvantages of discretion in comparison with the government based on strictly formulated rules. A special attention is given to the Bulgarian practices and tradition. A conclusion is drawn that the Bulgarian governing elite has not historically succeeded in taking advantage of the opportunities offered by the discretional government and as a rule has abused (consciously or unconsciously) the right of a greater governing freedom. On the contrary, when the macroeconomic government has had to observe concrete imperative restrictions the results have been predominantly positive. The Bulgarian practice confirms the theoretical result that the losses from badly conducted discretional macroeconomic policy on a national scale are much greater than the benefits from a possible well formulated and carried out policy. Resulting from the analysis, concrete suggestions are formulated, carrying the basic idea of abiding by clearly defined rules of fiscal policy and concentrating the efforts of the state on setting up and running relevant market institutions.

The state of the labour market in Bulgaria is analyzed from the viewpoint of the basic criteria for integration with the EU and the requirements for equality in positioning of the countries. Areas of problems are drawn such as sustained unequilibrium between supply and demand of labour, low labour activity, ineffective restructuring of employment, considerable lagging in the development high technology type of employment and lagging development in the quality of the human potential. The necessity is pointed out of reorientation of the regulations of the labour market in view of getting nearer to the criteria for membership in the EU and cutting hidden employment, improving the adaptability of labour and orientation of the active policies of the labour market to purposeful selection of the risk groups.

Two important problems are investigated - how is the information for corporate control revealed and what is its model in the Bulgarian public enterprises. Analyzed are the introduction and implementation of the EU Directive of revealing of information, as well as statistical investigation of the corporate control in 104 public enterprises, traded on the Sofia Stock Exchange by means of their shareholder structure. Among the most important conclusions of the investigation are: First, the adoption of the strict requirements of the European Directive 88/627 is an indisputable success for the further development of the legal base governing public companies and the trading of their stock. In the same time its practical implementation is not sufficiently consistent, which is not in the interest of investors, mainly the minority and individual investors. Second, the property of the public companies at present is strictly concentrated in the hands of a small number of shareholders. They hold over 50% of voting shares, which enables them to benefit more from managing the companies than to rely on the classical investment aims for capital return and dividends.

The development of the municipalities in Bulgaria during the 1998-2000 period is evaluated by means of an integral measurer, built on integrating measurers of: state of the economy; income condition of the population, financial status of the municipality; its investment activity, availability of the technical infrastructure and indicators of the unemployment level and the dynamics of the population of the municipalities. The differences in their development are estimated and comparisons are made with preceding periods. It is proved by empirical way that these differences grow with the stabilization of the macroeconomic environment. Every single municipality is evaluated by means of an adopted working hypothesis and developed theoretical models for sustained growth. The interaction between level of socioeconomic development and level of human development is investigated.