In 2002 the main objective of the Economic Program
was to contribute to the economic development and good governance
in Bulgaria. The efforts focused primarily on understanding the
nature of informal economy, formulating strategies to minimize its
negative social effect and promoting the concept and values of good
corporate governance in the country.
2002 Highlights
The Economic Program initiated a process of building
a network of experts, policy makers and think-tanks in Europe
actively involved in studying and drafting policies to counter
informal economy. Two international conferences were held in April
and November 2002 to strengthen the network and discuss results of
academic and policy research.
Parallel to the networking process, the Economic Program
institutionalized its efforts through the creation of a Working
Group on Informal Economy of experts from governmental agencies,
NGOs, academia and investigating journalists within the Coalition
2000 institutional structure. The Economic Program developed a new
methodology for informal economy assessment based on synthetic
indicators. The methodology was tested with two pilot surveys of
population and business, and a draft assessment of informal economy
based on representative survey of population was prepared.
Discussion Topics on the Economy of Crime were drafted. The
Economic Program continued to promote good corporate governance
values and standards through series of publications and conference
participation.
A reader entitled In Search for Better Corporate Governance
Mechanisms was published targeted at policy makers, high
executives, students and university professors. ь The Economic
Program fellows participated in the OECD set of conferences aiming
to create a White Paper on Corporate Governance in Southeast
Europe. ь An article on Corporate Governance as Anti-Dote to
Corruption, prepared by two fellows of the Economic Program was
published by CIPE in March 2002. The Corporate Governance
Dictionary published in 2001 was widely disseminated. The Economic
Program was actively involved in the creation of regional
partnerships against corruption and organized crime by holding
international conferences and building networks of experts.
I. Exploring the nature, scope and impact of the
informal economy
Multiple definitions of the term informal economy
exist, referring to grey, underground, criminal, shadow or
unrecorded economy, etc. Being informal could be a market "exit"
option or a symptom of its non-existence. Despite the variety of
reasons that may lead to informal economic activities, the real
challenge lies in its impact on growth, social welfare, democracy
and intentional trade.
The Economic Program undertook a number of
activities to build an international network of experts, policy
makers and think-tanks in Europe actively involved in studying and
drafting policies to counter informal economy in order to propose
effective governance strategy for informal economy in Bulgaria and
the region. The activities of this network were institutionalized
through the creation of a Working Group on Informal Economy
coordinated by Petkan Iliev from CSD.
The Working Group consists of experts from General
Tax Directorate, National Statistical Institute, National
Investigation Office, Ministry of Labor and Social Policy,
Bulgarian Presidency, National Assembly Administration, Bulgarian
National Bank, NGOs, academia and investigating journalists within
the Coalition 2000 institutional structure. The Economic Program
organized two international conferences in 2002 aimed to strengthen
the network of experts and to discuss the Working Group draft
assessments of informal economy.
Round table: "The
Informal Economy in the EU Accession Countries: Size, Scope, Trends
and Challenges to the Process of EU Enlargement"
The round table was organized by the Center for the
Study of Democracy, the World Bank and the Bertelsmann Foundation
on April 18-19, 2002. The round table brought together experts
involved in policy and research coming from EU member states
(Austria, Germany, Italy, the United Kingdom), accession countries
(Bulgaria, the Czech Republic, Hungary, Lithuania, Poland, Romania
and Slovenia), states participating in the Stability Pact for
Southeast Europe (Albania, Bosnia, Croatia, Moldova and Serbia) and
other countries (Canada and Russia) as well as representatives of
international organizations, multilateral and bilateral aid
agencies.
The discussion at the round table focused on the
following topics: size and scope of the informal economy, methods
of assessment, general views and cross-country comparisons, and
case studies from Central Europe, the Baltic republics and the
Balkans. A special panel was devoted to a related issue - risk
reporting and early warning for good governance and against
corruption. About 100 experts and policy makers attended the round
table. The papers presented by the speakers as well as the written
comments submitted by the discussants will be published as
proceedings of the round table.
Informal Economy Assessment
On 29 November, 2002, the second International Conference: "Informal
Economy in the EU Accession Countries: Size, Scope, and the Trends
in Trafficking and Corruption" was held bringing
together leading experts in the field - academics, policy makers,
representatives of relevant NGOs and others from Bulgaria, EU
members states and candidate countries, other SEE countries and the
US to discuss the institutional response to the grey economy and
the transnational crime.
The presentations and discussions during the first
day provided an adequate picture of the size and the scope of the
informal economy in the EU accession countries, explored the nature
of the informal economy through application of the available
methods of assessment, suggested recommendations on the
applicability of specific approaches depending on a dynamic set of
variables and contributed to consensus building on the role of the
informal economy in Europe and its possible implications in the
process of EU enlargement.
Dissemination activities
CSD activities received broad coverage in the
specialized economic and financial press as well as national
dailies. Articles on Economic Program outputs were published in
Ikonomicheski Zhivot Weekly, Capital Weekly, Pari and 24 Chasa.
II. Building public awareness for corporate
governance reform
Throughout 2002 the Center for the Study of
Democracy continued to raise awareness on corporate governance
issues by bringing out and providing relevant publications to
interested parties, and participating in public discussions on
relevant legislation changes and in international conferences.
The Economic Program organized the publication of a
comprehensive reader on Corporate Governance "In Search for Better Corporate Governance
Mechanisms"(Available in Bulgarian only) . The reader
consists of original studies of recent corporate governance
policies, e.g. those of the World Bank, and basic documents on good
corporate governance of international organizations like OECD. The
papers are written by well known authors like Marek Hessel. The
reader is organized in four chapters - the first summarizes the
fundamentals of corporate governance; the second is devoted to the
reforms in corporate governance systems; the third presents an
overview of regional and national strategies for better corporate
governance; the fourth provides original documents of leading
organizations in corporate governance as well as a detailed
reference guide for further reading as appendices.
Copies of the Corporate Governance Dictionary
published in 2001 were distributed to journalists from economic
sections or specialized economic newspapers and magazines, policy
makers and business associations, university professors and
graduate students, including participants of the Corporate
Governance Summer School organized by Bourov Foundation and
others.
Participation in the regional debate on Corporate
Governance
Two CSD senior fellows - Plamen Tchipev and Boyan
Belev participated in the Second and Third Southeast Europe
Corporate Governance Round Tables in 2002. The series of round
tables in Southeast Europe were initiated by OECD in 2001 aiming to
foster regional debate on corporate governance and draft policy
measures. The first round table was held in September 2001. The
second round table took place in May 2002 in Istanbul and focused
on transparency and disclosure, while the third round table was
held in November in Zagreb and identified key areas for improvement
of corporate governance practices. Based on papers and discussions
at these round tables participants drafted a White Paper including
a set of practical recommendations and designed to serve as a means
for setting priorities and implementing reform at national or
corporate level.
A paper entitled "Corporate Governance as
Anti-Dote for Corruption: Examples/lessons learned in Bulgaria and
transition countries" written by two fellows of the Economic
Program - Todor Yalamov and Boyan Belev - was published in
Corporate Governance: An Antidote to Corruption, March 2002, CIPE,
Washington DC.
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