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Bulgaria: Industrial Recentralization
Country Study > Chapter 3 > The Economy > Economic Policy and Performance > The Era of Experimentation and Reform > Industrial Recentralization

INDUSTRIAL RECENTRALIZATION


Before the end of the 1960s, however, Bulgarian economic planning moved back toward the conventional CPE approach. Many Western analysts attributed the Bulgarian retreat from the reforms of the 1960s to tension caused by the Soviet invasion of Czechoslovakia in 1968. International events may well have played a role, but the timing of the retreat and the invasion suggest another component: dissatisfaction among the BCP elite with the results and ideological implications of the reform. For example, in July 1968, one month before the invasion of Czechoslovakia, Bulgaria's unorthodox, three-tiered pricing system was eliminated. The party leadership had never accepted the concept of free and flexible pricing for some products, which was an important Bulgarian departure from centralized planning in the 1960s. Resistance to reform was further encouraged by a series of cases in which major enterprise directors used newly decentralized financial resources to line their own pockets.

Despite the general retreat from reform, two important measures remained intact, one each in agriculture and industry. The first involved new operating procedures introduced on the larger collective farms in the early 1960s. To better exploit the new equipment introduced during the consolidation of the late 1950s, farms were assigned more agronomists and labor was specialized by establishing fixed brigades. Production target negotiations between the Ministry of State Planning and the agricultural collectives also were simplified.

The industrial reform that survived retrenchment in 1968 gave associations, not ministries, responsibility to supervise the new system of supply contracts between enterprises. This system continued to grow, with prices determined on the basis of enterprise bargaining rather than ministerial fiat. Interenterprise allocations clearly functioned more efficiently with this arrangement.

Data as of June 1992




Last Updated: June 1992


Editor's Note: Country Studies included here were published between 1988 and 1998. The Country study for Bulgaria was first published in 1992. Where available, the data has been updated through 2008. The date at the bottom of each section will indicate the time period of the data. Information on some countries may no longer be up to date. See the "Research Completed" date at the beginning of each study on the Title Page or the "Data as of" date at the end of each section of text. This information is included due to its comprehensiveness and for historical purposes.

Note that current information from the CIA World Factbook, U.S. Department of State Background Notes, Australia's Department of Foreign Affairs and Trade Country Briefs, the UK's Foreign and Commonwealth Office's Country Profiles, and the World Bank can be found on Factba.se.

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