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Bulgaria: Investment Policy
Country Study > Chapter 3 > The Economy > Banking and Finance > Investment Policy

INVESTMENT POLICY


In choosing among alternative investment projects, Bulgarian planners in the Zhivkov era faced greater difficulties than investment decision makers in Western economies. True relative costs of labor and materials were masked by state assignment of prices, meaning that funding allocations among projects often were arbitrary. In most cases, investments were not based on efficiency criteria, but rather on plan goals. Artificially low interest rates also discouraged enterprises from efficient investment fund allocation.

The state budget also guided party economic policy under the old regime. Until the reforms of the 1970s, the budget was the primary source of funds for enterprise investment. Budget revenues were originally derived mainly from the turnover tax, a retail sales tax that was also used to regulate demand for various products. Beginning in the mid-1960s, budget revenues were derived progressively less from the turnover tax and more from taxes on net enterprise income.

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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