project - Slavina Kiprova ID#100025647 ECO203 a 21.04.2008...

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Slavina Kiprova ECO203 a ID#100025647 21.04.2008 Economic Crime and Corruption in Bulgaria during  Transition This paper examines the crucial factors, schemes, negative impacts, and  preventive measures of economic crime and corruption in Bulgaria during the so-called  ‘decade of transition’ (1990-2000). It is important to focus our attention on transition  economies because many institutions in these new market economies were in their  infancy. The major problems that Bulgaria had at the start of the reforms were the  undeveloped market, lack of competition, macroeconomic insecurity, unlimited power  and influence of the public officials, and muddled and not well-enforced property rights. Bulgaria chose an inappropriate approach of reforms at the beginning of the  transitional period. It adopted the “shock” without the “therapy”. All of the macro  stabilization policies had shortcomings that led to numerous economic crimes and  corruption. These illegal activities were widely spread in almost each area of the  Bulgarian public life. The most problematic areas included the public procurement,  customs administration, police, military, judiciary, political party finance, and even the  health system. According to the report by the Bulgarian Working Group for the Partners  in Transition II Conference, 2001 – “CORRUPTION IN TRANSITION: THE BULGARIAN  EXPERIENCE” 1   -  the main disadvantages of the public administration that stimulated  economic crime and corruption were: Weak democracy in Bulgaria Instable, inefficient, non-transparent and bureaucratic administrative structures Delayed adoption and slow enforcement of appropriate legislative measures  “Lack of clear distinction between the role of the public and private sector” “Excessive preservation of discretionary powers at all levels of the state  administration” Primarily corruption was a result of the society’s dependence on public officials.  Instead of being eliminated, this dependence became stronger during transition. A  national survey conducted in 1991 showed the bribery was spread among one third of  the population. It was stimulated mostly by deficits, nepotism and the privileges granted  1  
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to all party members.  The economic crimes and corruption in Bulgaria were facilitated  by the flaws in the reform system.  The price liberalization reform, for example, led to unequal distribution of 
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This note was uploaded on 04/30/2009 for the course ECONOMICS 203 taught by Professor Todorova during the Spring '09 term at American University in Bulgaria.

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project - Slavina Kiprova ID#100025647 ECO203 a 21.04.2008...

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