Rules, Regulations and Transaction Costs in Transition Bulgaria

eason why only two respondents in Sofia had resorted to intermediaries, whereas in large district centres and in
smaller towns the firms using intermediaries were respectively 6 and 7.
The average time spent to prepare and lodge the documents for the license is 20 days (without an intermediary)
or 7 days (through an intermediary). The maximum number of days indicated was 365 and the minimum number
was 1. (See Table 6).
Table 6: Costs of time (in days) for drafting and lodging documents for licenses, by sector and by town.
Total cost of time for
preparing and lodging
documents
Total Production Trade Services Sofia Large
district
centre
Smaller
town
Without intermediary
Arithmetical mean 36.40 64.78 26.96 27.8 27.2 48.35 31.83
Median 20 18.5 20 30 25 30 17.5
Minimum 1
Maximum 365
Valid cases 73 18 45 10 10 23 40
Through
intermediary
Arithmetical mean 23.17 2 28.4 15.3 45 20.83 18.86
Median 7 - 13.5 13.5 45 13.5 7
Minimum 2
Maximum 90
Valid cases 15 1 10 4 2 6 7
The big differences between median and arithmetical mean reveal the great variety of values given in the
responses. The biggest dispersion is found in respect production and in large district centres.
The dispersion in the number of days by inhabited area and by sector could hardly be surprising, given the logic
and the nature of Bulgarian licensing regulations.
The licensing procedure could be conditionally divided in two stages: applying for a license and obtaining a
license.
Applying for a license is the process of collecting and lodging the documents required to issue a license. The
time of preparing and lodging differs due to the different number of documents required in each case and, last but
not least, to the large degree of administrative discretion allowed by Bulgarian licensing arrangements and the
obscure powers of the authorities in charge of enforcing the various regulations.
A few examples could be invoked here:
• As regards the obtaining of a license for trade in tobacco and tobacco products, a statutory instrument 25 sets
out the number and type of documents required and the carrying out of the licensing procedure is entrusted to
the municipal administration. On the grounds of s. 22 of the Law on Local Self-government and Local
25 Rules Implementing the Law on Tobacco and Tobacco Products.
16