Rules, Regulations and Transaction Costs in Transition Bulgaria

obtained before proceeding to the next body. At the same time, there is an ubiquitous failure to comply
with the statutory time limits for issuing certificates, permits, licenses and approvals by the public
administration which is caused by a variety of reasons - starting from those envisaged in the legislation
(requesting additional documents or requiring rectification in submitted documents) and ending with the
absence of the official in charge, the lack of time to write the document or even the lack of paper to put
the text on. If we add the fact that most institutions involved do not have computer equipment, the delays
in the whole process become easy to explain and even logical;
2. The data from poll shows that, in order to obtain a license, one must submit 10 documents on average,
with 7 being the statistical median. The largest number of documents is required in the sectors of services
and trade and the smallest number is required for production. The surveys of the Institute for Market
Economics have shown that, for example, to issue only licenses for trade in cigarettes and alcoholic
beverages, some municipalities require a total of 28 documents to be submitted (while 11 documents are
required by the legislation). Another example is the practice of the State Commission for Gambling which
requires the submission of 29 documents before it issues a permit for organising gambling machine games.
In this sense, the maximum number of documents indicated in the answers - 47 - is not exaggerated, but
the minimum number - 1 - is completely unrealistic.
3. To obtain all these documents, one should visit 5 institutions on average (maximum 30 and minimum 1).
80 entrepreneurs had to visit those institutions 7 times on average, with the largest number of visits being
30 and the smallest number being 1. As regards the number of institutions visited and the number of visits,
there are no explicit differences by town or by sector. The main reason for these numerous visits lies in
the unclear rules and the restricted access to information as to what exactly should be done and how. For
57.5% of the entrepreneurs interviewed, the main source of information had been "the colleagues having
trodden the same path", while 41.7% had to ask questions personally to an official of the respective
institution. These facts suggest that: the procedures are not clear, nor are they easily accessible to
potential licenses applicants. Only 32.2% of those interviewed relied on the sample documents affixed on
the wall in the building of the respective institution. This is easy to believe, given the appearance and
contents of such requirements and samples seen during the field work. As a matter of fact, the samples
often contain instructions that can only be complied with after further explanation, e.g. "and other
documents depending on the type of site" or "etceteras" and so on, and so forth. (See Table 9).
Table 9: Responses to the question Where did you get information about the necessary documents to
be submitted for carrying on your business, such as permits, licenses, certificates and the like? (more
than one response allowed)
Valid percentage YES
Sources of information on documents
required
Total Production Trade Services
State Gazette 42.5 63.2 34.5 46.2
Samples shown in the building of municipal
administration or another public authority
32.2 21.1 36.4 30.8
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