Rules, Regulations and Transaction Costs in Transition Bulgaria

information network linking the bodies of public administration. This would ensure a rapid and easy
access to public registers and would make unnecessary the visits to any other institutions after the court;
2. The administrative delays in starting up and the transaction costs involved could be significantly lowered
by streamlining the licensing procedure as follows:
reducing to a minimum the number of licenses and replacing the transfer regimes with declaratory
regimes for all types of business, except those bearing on the health of citizens, public policy and
national security;
if licensing is deemed to be the proper approach, at least four principles should be observed:
a) licensing regimes should only be introduced by a law which stipulates all necessary and sufficient
requirements to obtain the license in question. The legislative instruments should not contain
provisions enabling the administration to impose other requirements in addition to those laid down
by law;
b) the State institutions must be prohibited from requesting information already provided to another
public authority or to a public register. In other words, the cost of exchanging information among
the different bodies of public administration should not be incurred by the business;
c) the time limits for issuing a license must be set out in the law and the licensing authorities should
not have a chance to modify them;
d) the licenses should be termless and not issued for a limited period of time. They should only be
revoked on the grounds of violations.
3. In order to reduce the transaction costs in the course of firms' operations, the existing Draft Law on
Legislative Instruments should be modified so as to insert in it a preliminary impact assessment
requirement for all legislative instruments. In other words, preliminary debates and analyses must always
be carried to make clear the expected positive or negative implications and who would suffer what. The
wide public involvement in such debates would make it possible:
to assess the upsides and downsides for various social circles;
to avoid needless costs for the implementation, explanation of and compliance with the legislative
instruments; and
to compare the costs and advantages of introducing a rule with the benefits lost as a result of not
opting for other solutions.
4. The transaction costs of time and money in finding and supplying raw materials and goods could be
seriously reduced by improving the exchange of information on the market. The business associations and the
chambers of commerce could help a great deal in that respect by facilitating the access of entrepreneurs to
business information. 39 In addition, entrepreneurs themselves should realise how important the up-to-date
information on their operations and whereabouts is, and should accordingly notify any change.
5. The efforts of NGOs in training representatives of SMEs are particularly relevant, especially in the field of
financial management and corporate governance.
39 An appropriate example is the following web site: www.major-companies.ro/.
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