Social Security, Poverty and Economic Transition: An Analysis for Bulgaria 1992–96

The paper addresses the issues of poverty and social security in a transitional environment on the basis of recent economic developments in Bulgaria. Special emphasis is placed on the need for a new type of social safety net stemming from the radical changes in the political and economic system. The evolution of the social security system in Bulgaria during the transition is analysed focusing on such elements as the pension system, unemployment benefits, child allowances, etc. The empirical analysis is based on extensive use of data from the Bulgarian Household Budget Surveys during the period 1992–1996. Poverty in Bulgaria is measured using different poverty measurements and some quantitative results showing the changing dimensions of poverty in the transition period are presented and discussed in the paper.EES or e-mail at Corresponding author. E-mail:     

Capital accumulation during the transition from plan to market1

This paper focuses on the process of capital accumulation and the forces that drive it in the countries undergoing the transition from plan to market. The methodological framework for analyzing the determinants of aggregate business investment draws on the neoclassical accelerator model, extending it to reflect some of the specificities of the transition environment. The model is estimated on data for the economies in Central and Eastern Europe (CEE) and the Commonwealth of Independent States (CIS). The results highlight the role of some key drivers of capital accumulation in an economy in transition, in particular, the relatively significant accelerator response to output, the importance of adjustment effects and financing constraints and the relatively minor role of the cost of capital.     

The transition crisis in Bulgaria

In 1996-97, while making its way through a difficult processof economic and political transformations, Bulgaria was hitby a severe economic crisis. This paper seeks to reveal andanalyse the underlying factors and causes of this crisis. Itfocuses on empirical issues but also highlights some basic causalitiesand interrelations between economic variables during the crisisas well as the role of economic policy. The economic turmoilin Bulgaria is addressed from three different perspectives:(1) the historic roots of the crisis; (2) the actual evolutionof the fiscal, banking and currency crises, and (3) the politicaleconomy of the transition in Bulgaria.     

Monetary policy, macroeconomic adjustment and currency speculation under floating exchange rates: the case of Bulgaria

This paper deals with the Bulgarian experience with exchange rate policy and the related macroeconomic adjustment in the transition period. It is argued that in the context of the Bulgarian macroeconomic environment, the exchange rate regime and the exchange rate policy (or the lack of such) did play a crucial role in determining the patterns of macroeconomic adjustment in this period. A simple general equilibrium model is suggested that provides some insights into the stylized performance of an economy under certain assumptions, similar to those characterizing the transitional state of the Bulgarian economy. Finally, some aspects of Bulgarian macroeconomic performance in recent years are analysed on the basis of the available empirical information and using the framework of the theoretical model. The paper concludes with the policy lessons of this experience.     

Convergence in Per Capita Income Levels, Productivity Dynamics and Real Exchange Rates in the EU Acceding Countries

During a catch up process – such as the one that thecountries acceding to the EU are undergoing – there emergesa fundamental economic link between nominal and realvariables which surfaces in the dynamics of the realexchange rate (the ``Balassa–Samuelson effect'). Thisarticle analyzes some of the implications of this process forthe acceding countries addressing three main issues.First it focuses on the empirical measurement of convergencebetween acceding countries and EU-member states. Thenit analyzes the economic fundamentals of a catch up processarguing that for this process to be self-sustained, it must bebased on differential productivity growth whereby productivityin the acceding countries grows faster than that in the incumbents.Thirdly, an attempt is made to test empirically theBalassa–Samuelson effect in the EU acceding countries. Finally the article discusses some of the policy implications of thedichotomy ``real-cum-nominal convergence' on the way to EUand EMU accession.     

The Paradigm of Knowledge-Oriented Industrial Policy

The paper attempts to synthesize some of the outcomes of the evolution of thinking on industrial policy in the knowledge-based economy and the related advances in policy practice. The term “knowledge-oriented industrial policy” is used in the paper to denote a new brand of public sector interventions targeting various structural aspects of the economy through transmission channels and mechanisms that hinge on the driving forces of knowledge flows and stocks and incorporating a systemic understanding of the policy rationale. The paper outlines the theoretical background, the rationale and the operational framework as well as the design of knowledge-oriented industrial policy whose nature is highlighted by drawing attention to the distinctions between “traditional” and “knowledge-oriented” approaches and instruments. A simplified taxonomy of different categories of knowledge-oriented policy instruments is also presented in the paper. The specific features and effectiveness of these policy instruments are discussed by highlighting their knowledge functions, the policy transmission channels as well as other important characteristics.     

Social Consumer Neuroscience: Neurophysiological Measures of Advertising Effectiveness in a Social Context

The application of neurophysiological methods to study the effects of advertising on consumer purchase behavior has seen an enormous growth in recent years. However, little is known about the role social settings have on shaping the human brain during the processing of advertising stimuli. To address this issue, we first review previous key findings of neuroscience research on advertising effectiveness. Next, we discuss traditional advertising research into the effects social context has on the way consumers experience advertising messages and explain why marketers, who aim to predict advertising effectiveness, should place participants in social settings, in addition to the traditional ways of studying consumer brain responses to advertising in social isolation. This article contributes to the literature by offering advertising researchers a series of research agendas on the key indicators of advertising effectiveness (attention, emotion, memory, and preference). It aims to improve understanding of the impact social context has on consumers' neurophysiological responses to advertising messages.     

The problem of bad loans and enterprise indebtedness in Bulgaria

Conclusions The problem of bad enterprise and bank debts has developed into one of the most acute economic problems in PETs. The general delay in implementing comprehensive policy measures to combat this issue as well as mismanagement contributed to the snow-balling of bad loans. In the case of Bulgaria this led to a major financial crisis and the authorities had to undertake a large-scale rescue operation.The experience of the past three years or so indicates that there are no ideal definitive solutions to the bad-loan problem. All bad-loan management options discussed in the literature and experimented with in PETs have serious drawbacks and their inherent cost is usually quite high. So the bad-loan problem has turned into one of the many dilemmas that economic policy makers of the PETs have to face up to.The Bulgarian approach to the bad loans issue builds on ideas that have been debated in the literature and adds some new and original aspects. It is an attempt to link the process of cleaning up the bad loans to the recapitalization of commercial banks and to the process of privatizing SOEs. In this respect it can be regarded as an element of a broader policy aimed at speeding-up the process of economic transformation of the country. At the same time, the Bulgarian approach has a number of weak features that may have undesirable consequences.     

Enterprise restructuring and adjustment in the transition to market economy: lessons from the experience of Central and Eastern Europe

Some aspects of the process of enterprise restructuring and adjustment in the Central and Eastern European countries are analysed on the basis of evideance from recent empirical research on microeconomic performance in these transition economies. The paper outlines a stylized picture of some types of enterprise behaviour which occur in this period and highlights a number of issues related to the process of enterprise restructuring and adjustment such as the problem of micro budget constraints, the motivation for enterprise restructuring, the issues of corporate governance. Some of the current impediments to enterprise restructuring as well as some of the determinants of enterprise performance in the transition periód are also featured in the paper.     

Impediments to Exports in Small Transition Economies: The Case of Bulgaria

MOCT-MOST: Economic Policy in Transitional Economies -