Transformations  in
Business & Economics

Is Privatization enough to Create a Market Economy? The Bulgarian Experience
Raúl de Arriba Bueno

ABSTRACT. The transition from a planned economy to a market economy means a systemic transformation process in which the privatization of state assets plays a central role. Fifteen years after the beginning of the Bulgarian transition the privatization process has almost come to an end. This article attempts an overview of the privatization of the whole economy, that is to say the transformation of the state assets as a whole, including financial and non-financial enterprises as well as land privatization. Privatization in Bulgaria does not guarantee the development of a market economy. In the case of land, privatization has generated the development toward farms for exclusive self-consumption. The financial system is concentrated in banking, with little credit activity and a very underdeveloped stock market. In the industrial sector, restructuring of companies is very limited and, although many are unprofitable, there are very few bankruptcy cases.

KEYWORDS: privatization, economic transition, economic policy, structural reforms, Bulgaria.

JEL classification: E6, L33, P48, P2.