Content

SEND US FEEDBACK


We're always looking for ways to make Geoba.se better. Have an idea? See something that needs fixing? Let us know!

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

LARGER ECONOMIC UNITS


Just as most reforms were being rescinded, the BCP began the last phase of postwar agricultural restructuring. Prompted by the labor shortage, the new streamlining of collective farms that began in 1969 introduced the so-called agricultural-industrial complex (agrompromishlen kompleks -- APK). The new structure was to industrialize agricultural production, boost the value-added component in Bulgarian exports by processing more agricultural goods, and raise the food supply to cities without diverting labor back from industry. In the late 1960s, relatively poor agricultural performance under the existing structure had prevented those goals from being reached.

The idea of combining existing enterprises into a smaller, presumably more manageable number of units spread quickly from agriculture to industry. By the end of the 1970s, the number of associations into which industrial enterprises were grouped was reduced by half. The sixty-four new, larger associations were granted the authority to make decisions for their enterprises about new investments, bank credits, and budget subsidies. Within an association, the larger enterprises (called subsidiaries) still could sign their own supply contracts and maintain their own bank accounts, but they ceased to be legal entities. Smaller enterprises (called subdivisions) became fully dependent on their association.

The main advantage of this streamlined organization was seen as economy of scale through increased specialization and a simplified flow of information. Associations also were assumed to be better able to make investment decisions and oversee material and labor distribution than either a small number of ministries or a large number of enterprises. The new structure would link specific industrial enterprises with scientific institutes in the same way as the agricultural complexes had linked them.

These reforms proved disappointing. Reformed planning techniques continued to leave unused industrial capacity, and quality control failed to improve. Both Western and domestic customers remained dissatisfied with the quality of many Bulgarian manufactures. New planning indicators that set norms for cost reduction actually reduced quality in a number of cases. Individual members of institutes could not convey their ideas to associations or ministries, where decisions to import or to invest in new technology were made. Thus the new framework only accentuated the dangers of socialist monopoly. Party meetings and the press criticized monopolistic abuses resulting from irrational decisions at the top and poor implementation of rational policies at the enterprise level. By the end of the 1970s, a new set of reforms was prescribed.

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.

Bulgaria Main Page Country Studies Main Page




Section 127 of 256






IMAGES


Click any image to enlarge.


National Flag



(лв) Bulgarian Lev (BGN)
Convert to Any Currency



Map



Locator Map