FOREWORD BY THE EDITOR
This edition is a collection of аrticle from very different areas of economics and economic policies, and also some of them reflect of different periods of recent and contemporary policy making.
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This edition is a collection of аrticle from very different areas of economics and economic policies, and also some of them reflect of different periods of recent and contemporary policy making.
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Georgia attempted the most radical reconstruction during the period from 2004 to 2012. There were made several pragmatic economic decisions together with implementing of state assistance programs for the most vulnerable. The assistance and subsidies had increased together with improvement of the economic performance and raise of state budgetary revenues but also strongest push of populist agenda by political rivals of the government. Economic performance of Georgia in the period was remarkable. The country improved its macroeconomic and business conditions by major reforming of business climate and economic freedom. The Economic Liberty Act of 2011 was a mojor step for guarantying and stabilizing of this environment but the simultaneous introduction of some interventionist measures made initiated and supported by internal and foreign stakeholders limited the ability of the economy to grow faster resulted in losing of popularity and inviting to the political agenda leftist players. Majority of the politicians who supported the radical reforms in the middle of 2000s found themselves in a trap of promises abandoning little-by-little small government agenda - to have chances to keep the support they had. For them so-called libertarian fashion lost its attractiveness and resulted in the shift towards left. They found a new pragmatic vision based on the belief that maybe more economic freedoms are good for business but this does not give immediate relief to poor who expect more responsibilities of the government for their living conditions. This paper is an attempt to analyze if the policy of economic freedom was maintained in its full range in Georgia and to show that more economic freedom is the only pragmatic way to improve economic conditions in the long-run.
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Being a member of the European Union Lithuania has an obligation to join the European Monetary Union. The first attempt to meet Maastricht criteria was done on the 1st of January, 2007. However Lithuania failed to fulfill the inflation target. Recorded inflation for March of 2006 (as it was the reference period) was 2.72 percent, given that the criterion was 2.66 percent (if using the CPI data provided by the Eurostat with two digits precision). So, Lithuania had 0.06 percentage point bigger inflation that was required. It was considered as a huge failure of economic policies as the major impact to the raising inflations was made due to the rise of the regulated prices of energy and transportation. In 2009 the major economic crisis hit, followed by the increase in the public debt and raising fiscal misbalances. At present Lithuania would not meet the criterion on fiscal deficit, the inflation could also be an obstacle. The critics of the Lithuanian economic policies are strengthened by the fact that being in the worse condition in 2007 (did not meet criterions by the larger extent), the other Baltic State – Estonia - managed to meet the criterions and joined the euro zone as of the 1st of January, 2011. As Baltic States are competing for the investment, the euro in Estonia is considered as a big advantage for the investors, creating larger stability and credibility. Both countries had very strong links between national currency and the euro through the currency board arrangement, meaning the fixed exchange rate and 100 % reserves of foreign currency. That was considered as very similar starting positions. Estonia joined the euro zone probably in the worst period for the euro itself. The stability of the euro is threatened by the debt crisis in Greece, Italy, Portugal, Spain and unsustainable social security policies in all EU countries. Newcomer in the Euro zone is the most disciplined country – Estonia has balanced the budgets and demonstrates the best economic results. Being a member Estonia will have to contribute to the Financial Stability Fund to bail out economies that were performing loose fiscal policies. Tax payers of responsible countries are paying for irresponsible and that creates moral problems in addition to financial. Moral hazard is encouraged. The opaque future of the euro as a stable currency raises the question if the countries outside the euro zone should seek joining the EMU. The paper analyzes major benefits and drawbacks of the being inside and outside the euro zone, given the risks for the euro zone itself.
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Ukraine is perceived as highly corrupt country where political, grand and petty corruption has become an integral element to social interaction. Corruption causes losses to both the State and its population due to inefficient use of budget funds and low level of government services as well as piles uncertainty in the environment where economic agents and households function. Excessive regulation is one of the key contributors to corruption at enterprise level. International studies demonstrate that excessive regulation of business activity promotes corruption. The more procedures a business needs to go through and the longer these procedures take, the more likely it is that the level of corruption in the country is high. This assumption is backed by findings of the 2009 World Bank Investment Climate Research Study . The cause and effect link here works in both directions: government regulation of business generates corruption, and corruption can lead to the government introducing a regulation promoting one company or sector at the expense of others or at the expense of the population in general . That is why deregulation is an important tool in the anti-corruption framework, as it reduces the possibilities for abuse. Developing instrument for monitoring and evaluating the business climate, regulatory environment identification of barriers to business development to compile a list of top-priority economic, legal, and regulatory reforms based on feedback from business as main stakeholder of reform is among key priorities of public policy agenda in the country. In the article, we describe of our experience in construction of corruption perceptions’ indicators, present the indicators based on results of last decades BTS survey. In addition, we try to compare the indicators of regulatory climate and corruption perceptions (Annual Indicator of Business Environment Burdens and Annual Corruption Perception Indicators) with IER Industrial Confidence Indicator and IER Index of Business Condition that based on BTS data. It is important to check the hypothesis that in complicated regulatory climate the corruption perceived by enterprises as way to solve a problem of excessive, unclear and complicated regulations, and not as single problem. It is important message that should be taken into account when anti-corruption measures are developed in the country. In terms of real policymaking process in Ukraine such message means that measure aimed at deregulation of economy should be successfully completed.
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The problem of nuclear proliferation is an old one dating back to the first offensive nuclear detonation in 1945 when the United States used nuclear weapons on Japan . The problem resurfaces each time a new nation develops nuclear weapons: the Soviet Union in 1949, the UK in 1952, France in 1962, China in 1964 and India in 1974. Israel claims to have nuclear weapons. Brazil, South Africa, Egypt, Argentina could but have stopped development; and Iran, Iraq, Libya, North Korea, Syria and probably others have express the desire to have them. The development of a nuclear black market is well known over the past four decades. Iran and to a lesser degree India remain active customers by using procurement networks to supply its nuclear programmes via the private sector notes the International Institute for Strategic Studies
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This Study gives a macroeconomic, socioeconomic and fiscal evaluation of the potential liberalization of the food voucher system in Bulgaria. It takes into account the developments in the country after 2012, notably the dynamics of the household income, wages and labor market and updates the justification for liberalization of the system. It assesses and analyses the direct and indirect benefits and costs of the system’s operation in its present form, from the perspective of both government budget as well as the economy and household budgets. For better accuracy and comprehensiveness of the analysis, it also takes into consideration the impact of food vouchers on the informal economy, the value added generated in the domestic economy and intra-family redistribution. The study outlines three sets of reasons – economic, fiscal and social-political - why we can expect positive developments if monthly voucher allowance is increased and the quota principle is replaced by market-based use of the system.
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When towards the end of 2008 the leading world economies found themselves in the grips of a severe global financial and economic crisis, their governments felt compelled to react. Most of them, especially in North America and Europe, did so by dramatic increases in government spending with two main goals: to bail our failing financial systems and to substitute dropping private demand with pumped-up public demand as a general support for the aggregate. At the same time central banks made large injections of liquidity to pump up the monetary base and thus counteract the severely contracting money multipliers – at the cost of putting on their balances assets of less than prime quality and thus in effect debasing the currencies of the respective economies.
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Marek Tatala, Vice President and Economist at the Civil Development Forum (FOR), a think tank from Poland founded by Professor Leszek Balcerowicz. Graduate of the University of Bristol, Warsaw School of Economics and Atlas Leadership Academy. His research interests include law and economics, rule of law, justice system reforms, populism and economic freedom.
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The main point of this paper is that foreign aid fails because the structure of its incentives resembles that of central planning. Aid is not only ineffective, it is arguably counterproductive. Contrary to business firms that are paid by those they are supposed to serve (customers), aid agencies are paid by tax payers of developed countries and not by those they serve. This inverse structure of incentives breaks the stream of pressure that exists on the commercial market. It also creates larger loopholes in the principle-agent relationship on each point along the chain of aid delivery. Both factors enhance corruption, moral hazard and negative selection. Instead of promoting development, aid extends the life of bad institutions and those in power. Proposals to reform foreign aid – like aid privatization and aid conditionality – do not change the existing structure of the incentives in aid delivery, and their implementation may just slightly improve aid efficacy. Larger improvement is not possible. For that reason, foreign aid will continue to be a waste of resources, probably serving some objectives different to those that are usually mentioned, like recipient’s development, poverty reduction and pain relief.
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The article raises the question of the dependence of the choice of a policy evaluation method on values. There is a need to combine economic and technical assessments with a social impact assessment. Such a combining approach allows to manage the social impacts of all policies regardless of the specific subject of intervention. This in turn leads to more sustainable results, possible benefits rising and public consensus on policies.
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Impact assessment is a relatively new topic in both the scientific and public debate. It can be said that its popularity is primarily in its narrow sense, namely as a necessary pre-action with the intentions of new regulations that form the environment and especially as a specific methodology for analyzing forthcoming regulations. In this sense, the practice has overtaken the theory. In searching for theoretical reflections based on certain cases, this article focuses on understanding the effects of the impact assessment (especially as performance assessment) as a potential for the development of social environment in relation to the action of a variety of factors. The paper links the topic of impact assessment to categories of sociological analysis such as social capital. The main conclusion concerns the impact of a regulation (staff attestation) not only and not primarily in its formal application, but in the flexible, continuous improvement of the toolbox in the case of a consistent application of the measure, thus achieving a cumulative effect and, as a result, contribute to the development of social capital. The success of a measure, however, is a function of the skills of the instrument's adaptability to the specifics of the environment.
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In the light of the comprehensive standards, elaborated both at the level of Council of Europe (Venice Commission, CEPEJ) and the European Union (European Framework for strengthening the Rule of law, EU Justice Scoreboard, CVM), the article will provide impact assessment of the latest judicial reforms (constitutional and legislative), taking place since 2015. The analysis will focus on both achievements and deficiencies in reforming the Bulgarian judicial system. Among the former will be outlined the structural division of the Supreme Judicial Council in two chambers (of judges and of prosecutors), increasing the safe-governing of the courts, direct election of the SJC members from the professional quota; among the latter, will be highlighted the improper balance in the chambers between the professional judiciary quota and the parliamentary quota, still preserved omnipotence and lack of accountability of the chief prosecutor, jurisdiction changes with respect to the criminal justice system.
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The reform of the implementation of the regulatory impact assessment is currently ongoing in Bulgaria. Impact assessment is broadly applied – ex-ante and ex-post evaluation of projects for all regulatory acts is mandatory. The main purpose of this article is to make a pilot evaluation of the results of the reform carried out in the first year of its implementation. The evaluation is done through expert analysis using the scorecard method. The main point of view of the analysis is the extent to which regulatory projects contribute to enhancing the quality of public policies implemented.
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Impact assessment of policies aiming prevention of use and dependency on psychoactive substances (PAS) all over the world include a wide range of approaches and policy instruments, but their implementation in Bulgaria is limited and underestimated. The report suggests some conclusions about the impact of antidrug prevention policies in Bulgaria, developed on statistics and in-deep interviews. The idea is to outline some steps toward improvement of drug prevention policies and institutions.
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The main task of local authorities is to care for and guarantee the quality of life and well-being of their citizens. In the last years, the local authorities are faced in front of unprecedented challenges related to new requirements and constraints. Inter-municipal cooperation is a well-known mechanism for dealing with some of them. Being complex and multifaceted, the IMC requires to be foreseen number of political and socio-economic factors. This, in turn, requires the implementation of an appropriate impact assessment mechanism to track and evaluate good ones from bad decisions. The subject of the report is the scope and the problems (issues) that the impact assessment has on the municipal cooperation.
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The article critically explores the theory of “the Parental Alienation Syndrome”, which has been gaining in popularity for the past several years and whose incorporation into Bulgarian legislation has been advocated by various organizations, groups and circles. The author summarizes the available literature on the topic and concludes that according to the majority of researchers, in its current form the theory does not come up to scientific standards and is inappropriate to embody in regulation.
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This paper analyses the effects of the process of deindustrialization immediately expressed in processes of urban shrinkage in border mountainous municipalities of the Rhodopes and Strandzha-Sakar in South Bulgaria. These are areas defined as regions for targeted impact on a variety of geographical, social, industrial and economic indicators. Included is the assessment of urban shrinkage and identification of the trends in the development of the southern border mountainous municipalities caused by the deindustrialization.
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The inequalities in economic development have increased in recent years – both at a national level and at the regional and local levels in the EU Member States. Reducing disparities between regions is widely seen as a goal of regional policy. The purpose of the article is to analyse the dynamics of cohesion among the regions in Bulgaria for a period of 10 years (2007 to 2016). The multidimensional scaling method is used as a method for defining possible groupings across regions. The analysis is done at district level that correspond to a NUTS III level of the EU classification, In the particular case of Bulgaria, at the NUTS II level, there is no equivalent administrative territorial unit, but only statistical regions. On the other hand, the district level in Bulgaria is the traditional regional level of government. In addition, a specific emphasis is placed on the analysis of developmental disparities between the capital and the other districts.
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In recent years, impact assessment has proven to be a useful tool for handling of bills and regulations that would be hard to enact after adoption, as well as a crucial part of the public policy cycle for unification of the regulatory systems in the countries of Eastern Europe that are part of the EU. Impact assessment is a tool used for studying various economical, ecological and social effects of legislation. Its use enables solutions to be offered and laws to be adopted based on a clearly defined correlation between the set goals and expected outcomes as the decisions made are based on the objective evaluation of concrete data and indicators.
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