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Bulgaria’s position in the world oldest and most comprehensive annual report on the competitiveness the World Competitiveness Yearbook 2006 of IMD (International Institute for Management Development) was presented several days before the European Commission report on Bulgaria’s readiness for accession. With the partnership of the Center for the Study of Democracy this year Bulgaria was included for the first time in the report, issued since 1989. The report ranks and analyzes how 61 selected economies creates and sustain the competitiveness of their enterprises. It stands out among reputed international ratings with the predominance of more reliable statistical data over the qualitative (survey) data. The rating uses 312 indicators covering a broad spectrum of competitiveness, classified in four major groups: economic performance, business efficiency, infrastructure and government efficiency. The policy brief makes an overview of the report's main findings and recommendations with focus on the Bulgarian economic performance.
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In recent years, curbing corruption is a top priority of most international institutions. The European Union attaches paramount importance to the problem of corruption in the two successive waves of accession in 2004 and 2007. The pre-accession process has prompted the European Commission to develop its own mechanism to assess the progress of anti-corruption reforms. Like many other key areas for the functioning of the internal European market, the development of EU anti-corruption policy has logically led to the creation of a single European methodology for defining standards for measuring corruption.
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With the partnership of CSD this year Bulgaria was included for the second time in the World's oldest and most comprehensive annual report on competitiveness, the IMD World Competitiveness Yearbook 2007. It has been published without interruption since 1989 by IMD (International Institute for Management Development). Bulgaria’s competitiveness was covered and ranked together with 54 other leading world economies. This year Bulgaria came 41st on the scoreboard, surpassing Italy, Romania, Ukraine, Turkey, Poland, and Croatia among others. The position is an achievement in its own right, considering that the country is measured up against the champion nations setting the trends in the world economic competition. In 2007 Bulgaria has largely kept its position compared to the previous year, but its business efficiency has declined. Meanwhile, the country’s overall economic performance has improved.
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Duty-free trade-related smuggling of excise goods has been one of the most potent and sustainable sources of political corruption in Bulgaria for the last fifteen years. The operation of land border area outlets has been a major channel for flooding the Bulgarian market with tons of illegal cigarettes and alcohol and the sale of millions of gallons of excise-free petrol. The resulting profit, running into hundreds of millions each year, has been funding many a Bulgarian party and has become the foundation of untouchable political oligarchies. The policy brief examines duty-free trade in Bulgaria in regard to turnover and tax revenue losses from the operation of the duty-free outlets. It also analyses the regulation of duty-free trade in Bulgaria which bears all the marks of a state capture. The brief presents possible courses of action towards reducing the negative effects of duty-free trade.
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Enhanced criminal justice and improved cross-border cooperation between judicial and law enforcement authorities are essential for the EU and its Member States in order to effectively respond to the increasing threat of cross-border criminality. The last two EU enlargements resulted in significant changes in the Union’s external borders. Some of the countries that used to have such borders are now neighbors to other EU Member States. Their responsibilities regarding the security at the external borders are gradually transferred to new Member States which have become the outermost countries of the Union. The duties of these countries on protecting the external borders are yet to increase substantially. Further to Bulgaria's accession to the European Union, the country's frontiers with Turkey, Macedonia and Serbia, as well as its Black Sea border, have become external borders of the EU. Hence, border crossing-related criminal offences and customs violations no longer represent a problem of Bulgarian national security alone: they have turned into a problem of EU security. This policy brief is a follow up to the 2007 CSD report Reinforcing Criminal Justice in Border Districts and examines the attitude of and measures undertaken by the relevant stakeholders as regards the policy recommendations formulated by the report.
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This policy brief outlines the result of the consultations, which the Center for the Study of Democracy held with representatives of business and government on the feasibility of public-private partnerships in promoting a level paying field in Bulgaria. Its findings seek to inform further discussions with Bulgarian and international stakeholders on the modalities of possible future initiatives in this area on the example of public policy on the grey economy. If the efforts of the Bulgarian government and the business community to reduce the adverse impact of grey economy on the nation’s welfare are to succeed they need to bring on board the experience from successful coalition building for good governance from the non-government sector, based on best international practices. International experience has revealed that there are no easy fixes to pervasive grey economy and corruption. This brief proposes an overview of measures undertaken thus far to tackle the grey economy in Bulgaria and outlines a possible platform for engagement of the business, NGO and government sectors for long-term partnership for leveling the paying field in the country.
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The Policy Brief focuses on the Bulgarian energy sector, which has historically been and will remain of strategic importance for the country’s economic development and national security, especially in the context of growing EU and Balkan markets. However, recent shifts in the world’s economy, policy, regional dynamics, and geo-political situation are the driving factors necessitating the need to introduce major reforms focused on a transparent, diversified, efficient, and market based energy sector in Bulgaria. Bulgaria needs to actively participate in the European and international energy debate and to address the whole complex of energy related policies.
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Energy is a key sector for Bulgarian economy, both because of its size and because of its importance to national competitiveness. This requires decisions to be made on the basis of reliable and accessible data, broad based discussions and clearly identified strategic priorities, which rely on established practices and mechanisms for good governance. The latest strategic document at national level is the Bulgarian Energy Strategy from 2002. Without updating it, the Bulgarian government has committed in the years following its EU accession to substantial investments with long-term impact on the energy sector, which is a vivid example of failure in good governance. Bulgaria’s membership in the European Union (EU), climate change negotiations, the financial and economic crisis and Bulgaria’s inclusion in several international investment projects have changed the conditions for the development of Bulgaria’s energy sector. These latest developments require updating of the national energy strategy and providing for better and transparent governance in the sector.
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The policy brief focuses on the impact of the governemnt measures put forward to counter the economic crisis and their effect on the hidden economy. The hidden economy has been a central topic for discussion in the public space upon each amendment to the economic legislation and particularly before elections or the passing of the national budget. Nevertheless, aside from the Annual Hidden Economy Index released by the Center for the Study of Democracy and a few sporadic analyses by other non-governmental, academic and business organizations, there is a lack of an adequate government system of ex ante and ex post impact assessment of the proposed measures to fight hidden activities of the wider economy. The adjustments of GDP done by the National Statistical Institute aiming to include hidden economy in the system of national accounts are not made public and do not serve as a basis for decision-making. Thus, public debates on hidden economy become little more than displays of rhetorical skills or actually serve completely different agendas rather than the implementation of measures to curb its negative impact.
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Organized crime in Bulgaria is quick to adapt to the new realities and by and large enters the legal economy by legalizing capital accrued from criminal activities. This process poses a significant threat to the country: while in developed democracies money-laundering is carried out through the complex financial operations or investments in the legal economy (for instance through the purchasing of real estate and movables), in Bulgaria money-laundering takes on a specific form – political investment. The policy brief makes an overview of the organized crime, corruption and money-laundering in Bulgaria. According to the authors, in spite of several legislative initiatives and a growing amount of prosecutorial decrees for money-laundering in the last decade, the prosecution for this type of crime in Bulgaria remains insignificant. The complexity of the crime, the objective difficulties for its investigation, as well as the necessary inter-institutional approach on an international level to combat such activities explain the relatively small number of prosecutions.
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The brief "The Energy Sector of Bulgaria" is elaborated jointly by the Center for the Study of Democracy and the Atlantic Council of US. It presents the main challenges that the energy sector in Bulgaria faces. By virtue of its geography, Bulgaria finds itself in a difficult nexus, drawn into Eurasia’s contentious energy geopolitics and as a European Union member, involved in the Union’s fragmented energy policy and complex regulatory, energy efficiency and climate change objectives. That position is challenging, but it also presents decision-makers in Sofia with opportunities.
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Measured by using market currency exchange rates, Bulgaria has consistently ranked as the most energy intensive economy in the EU: in 2007, it used over a ton of oil equivalent to produce 1,000 Euro worth of gross product. Measured by using purchasing power parity, Bulgaria’s energy intensity is still dismal, around 600 kg of oil equivalent per 1,000 Euro of product. Even though still negligible by any standard, Bulgaria’s energy efficiency has actually improved by about 50% since 1996 and has been on an uninterrupted path to a change for the better by about 5% per year. Overall, the Bulgarian economy seems to have completed the transition from heavy industry to less energy intensive light industry and thus already picked the low hanging fruit of natural gains in efficiency. The country is probably at a point, as some experts argue, from which onwards any additional gain in efficiency will have to be attained through advances in technologies of energy production, conversion, transportation, and use which will call for cost-effective approach and a strong incentive system.
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Main purpose of this study is to review and discuss the development of regulation at EU level to guide corresponding national legislation and policies designed to address the challenges of sustainable development, notably those on the environment dimension and as regards to the most relevant economic sector – energy. The paper will briefly examine the development of the idea and strategy for sustainable development in Europe over time, the concrete EU legislation and instruments to facilitate national policies to support such development.
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During the past decade organised crime threats have taken on an increasing importance and have become central to the national and EU policy debates on domestic security and citizen safety. The dynamics of globalisation combined with the dismantlement of the Iron Curtain in the heart of Europe led to growing cross-border flows of people, goods, money and information. On the other hand East European transition was marked from its start by a fast rise of criminality, which soon translated into unprecedented levels of transnational organised crime across Europe. Further to that the growing complexity of financial markets created opportunities for white collar criminals, adding some hitherto unknown criminal phenomena.
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The European Commission (EC) contracted the Center for the Study of Democracy (CSD) to analyse the links between organised crime and corruption. The main objectives of the study were to identify: • causes and factors that engender corruption by organised crime (including white-collar criminals); • the scope and the impact of that corruption on society and institutions; • organised crime’s main corruption schemes, the areas or risks they create, and the related differences amongst European Union (EU) Member States (MS); • best practices in prevention and countering corruption linked to organized crime; framework for a future assessment of trends in the link between organized crime and corruption, as well as corresponding counter measures.
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Thе policy brief presents the dynamics and the components of the Hidden Economy Index 2010. It also examines the recent trends in the Bulgarian economic development and expected effects on the informal sector. The dynamics of the hidden economy is an important indicator of the state of a country’s institutions as well as of its competitive potential. The hidden economy has a serious impact on private sector activities, the productivity and competitiveness of the workforce, on economic development and growth, as well as the social security and support systems of the country. According to different estimates about a third of the world’s GDP is within the “shadow turnover”. It is argued that the current financial and economic crisis will result in an increase in the hidden economy in most European countries. The recent debt crisis in Greece has exposed drastically the need to better account for and to grasp the implications of the existence on large hidden economy on economic performance. This is even more pressing in the light of achieving Europe 2020 results and calculating each country’s contribution to the European Stability Mechanism and the Euro Plus Pact.
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The policy brief presents the results of a survey of the public trust in the police and the courts in Bulgaria, the public perceptions of the level of corruption in these institutions and the fear of crime in the Bulgarian society. Of all the EU member states, Bulgaria is the country whose citizens are the least satisfied with the performance of the main government institutions. Trust in the main institutions concerned with criminal justice – the police and courts, is low and has remained practically unchanged over the last decade. At the end of 2010, a positive evaluation of police performance was given by less than half of the country’s adult population and barely one in five gave a favorable opinion of the courts. The low public trust in the courts and police can also be accounted for by the high level of corruption in these institutions. It is also conducive to public attitudes of insecurity and the society begins to perceive crime as an inherent part of reality rather than a problem that can actually be addressed. A state’s penal policy can only produce results if sufficient attention is paid to trust, legitimacy, and security. It is therefore recommended to adopt a system of indicators for the assessment of public trust in criminal justice.
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The economic crisis and the increased threats from terrorism, organised crime and illegal migration have brought to light the issue of efficient and effective management of the external borders of the European Union. For Bulgaria it has become even more important with regard to its upcoming accession to the Schengen area.
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Trafficking in persons is a lucrative crime and a gross human rights violation, which affects all EU Member States. Trafficking in children merits special attention of anti-trafficking efforts as children are especially vulnerable to trafficking, re-trafficking and victimisation and the number of children trafficked throughout the EU is on the rise. Investigation, protection and prevention measures for child trafficking are especially needed as the exploitation of children and violation of their rights have dramatic negative effects on children and society as a whole. While there is some empirical evidence on trafficking in human beings for the purpose of sexual exploitation of women, other forms of trafficking have not drawn attention of researchers, academics and policy makers. This means that victims of exploitation fall outside the radar of identification and thus cannot access the available assistance. Having this in mind, a consortium of seven partner organisations3 sough to explore three specific under-researched forms of child trafficking in order to contribute to the knowledge on how and why children fall prey to exploitation. The three forms studied are child trafficking for the purpose of begging exploitation, child trafficking for the purpose of pick-pocketing and child trafficking for the purpose of sexual exploitation of boys.
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