Issue 7, 2003

The article discusses the fundamental principles of macroeconomic policy. It traces the development of macroeconomic policy ideas, and, particularly, the transition cycle from adhering to strictly defined rules to free discretion and vice versa - back to restricting the freedom of implementation of macroeconomic policy instruments. The article analyses the advantages and disadvantages of discretion as compared to the management that follows strictly defined rules. The special focus is on Bulgarian practice and tradition. The article proves that throughout history Bulgaria's governing elite has failed to take advantage of discretionary management and it has been rather the norm for the government to abuse (deliberately or not) the right to a greater management freedom. On the contrary, when macroeconomic management has had to adhere to specific imperative restrictions, positive results have prevailed. Bulgarian practice has confirmed the theoretical statement that the losses resulting from poor discretionary national macroeconomic policy are much greater than the benefits resulting from a well-defined policy, carried out consistently. The nature of and changes in monetary policy during the 1990s and the introduction of the currency board arrangement are a telling contemporary example of this statement. The recent policies of the governing elite have been focussed on fiscal policy, bringing about continuing attempts for large-scale economic experiments, in spite of the lack of clear estimation of the possible consequences. The article's analysis outlines some suggestions and recommendations, which are based on the adherence to clearly defined rules in fiscal policies and focuses the efforts of the state on establishing and developing adequate market institutions.

JEL: E6; E61; E66

This article addresses problems in the field of scientific research, faced by Bulgaria in its process of accession to the European Union. On a comparative analysis basis, it evaluates the state of existing financial and human resources support to science in the country. It points out a series of weaknesses in the research process, incurred in the past decade. It also suggests ways of overcoming them, focusing the attention on achieving standards that would provide science in Bulgaria with adequate means of development and integration in the European research area.

JEL: H5; 032

In a theoretical and practicо-applicable aspect this paper has clarified the interaction between innovations and economic development. It has been proven that the positive influence of innovations on the economic development of open small-scale economies is determined by the specific public impact (governance) on the conversion of the new knowledge into a market product or service. A generalized analytical scheme of the main participants in this process has been suggested, the same being grouped in five basic interacting sectors: research and development, education, business, non-commercial and state, each of them having its international equivalents. It has been taken into account that the environment - legal, institutional and financial, renders substantial impact upon the efficiency of their interaction. The scheme has been proven by the practice of the European Union innovation policy. It is applied at the characteristics of the interaction between the innovations and the economic development of Bulgaria. It is used also in the analysis of the results of an inquiry carried out with 50 innovative organizations, the result of which allowed defining priorities for the national innovation policy.

JEL: О10, О31, О32, О33

The budget policy is comparatively the strongest form of economic influence of the state over socioeconomic development. An attempt is made to distinguish between the major theoretic achievements and open problems of the influence as a basis first for the vindication of some already rejected ideas by the theoretic community; second to mark the lines for a more productive methodological approach to clarification of open problems, and further to a more effective state influence on the qualitatively new economic and political realities of the Twenty First Century.*

JEL: B10; E10; E62

The situation of labour market in Bulgaria has been analyzed in the light of the basic criteria for EU accession and the requirements for equal position of the countries. Problem areas like sustainable disequilibrium between labour demand and supply, low labour activity, ineffective employment restructuring, significant delay in the development of high-tech employment and retarded development in the human potential's quality have been outlined. There has been described the need for re-orientation of the labour market regulations in order to approximate the EU membership criteria for reduction of hidden employment, increase the labour forces adaptation and orientation of the active labour market policies towards targeted selection of risk groups.

JEL: J21; F15

Two major concepts related to the role, place and development of the small and medium scale business sector (SME) are most popular among the public. According to the first concept, the immanent advantages of this sector are an ample economic factor for SME to perform well. The other concept studies and recommends a number of necessary measures at government level, that are a compulsory prerequisite for the efficient SME sector performance in the market economies.
At government level, some countries in transition such as Bulgaria, for example, attempt to synthesize elements from both concepts. On the one hand, the serious challenges of the transition engage the management capacity and resources and force the government to give priority to mainly the "automatically acting market forces" in the process of development of the emerging national small business sector. On the other hand, however, the lack of entrepreneurial experience and traditions, of suitable financing schemes and unavailability of support business infrastructure considerably obstructs the emergence and development of small companies.
This paper discusses the achievements and shortcomings of government policy in this field. Based on official statistics and analysis of business practice data a conclusion is made namely in countries with an average level of industrial development only targeted and long-term government policy for small business and entrepreneurship, promotion and support could be of considerable significance.

JEL: E60; E69

The paper observed the role that plays the macro-geographical factor for the economic development of the South East European countries. The possibilities for developing mutual beneficial cross-border relations have been analyzed, based on information obtained from different surveys for South East European Countries.*
The main goal of the project can be summarized as follows: to outline the reasons why the regional policy of Cross--border cooperation be accepted as an "optimal" policy for the border areas of South East European countries; to define the economic and social after-effects of this policy on the region and the countries, taking into account the problems of EU accession and the open Pan European market; to analyze the institutional degree of the readiness to provide regional and Cross-border cooperation within South East European countries.
Finally, the main advantages from cross-border cooperation have been outlined as a general policy and for the region specifically.

JEL: R1; F15

The paper presents the actual ownership structure of public companies in Bulgaria on the basis of a survey of 104 companies traded on the Bulgarian Stock Exchange. It also discusses the problems of disclosure of ownership information, focussing on the transposition of the EC Large Holdings Directives. The paper finds out an inconsistent enforcement of the disclosure procedures and very concentrated ownership; for more than half of the companies the largest shareholders stakes' exceed more than 50%. That provides incentives and opportunities for violation of the rights of minority shareholders, though this is far not the only reason.

JEL: G32, G34, G38, K22

The paper studies the genesis and basic factors influencing the development of the entrepreneurship in Bulgaria. It presents an outline of the history of the Bulgarian business and entrepreneurship and examines the characteristic features of the different periods, as well as the factors underlying these features. Some generalized evaluations are made concerning the influence of the economic freedoms, the degree of state intervention, the influence of the European culture and the "capital-labour" relations. The thesis developed in the paper is that the future of the Bulgarian entrepreneurship depends on the difficult process of adoption and general acceptance by all participants in the market of new social values concerning the economy of time, thriftiness, contract obligations, job discipline, tax payment, etc.

JEL: N01; N80