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Bulgarian Economic Thought since 1989: - page 4 / 22





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the second, one could be misled into judging authors outside the concrete historical setting (Faucci, 2000).

Initially, the environment in which the Bulgarian economic scholars worked was considered. With respect to the economic and social dynamics of the Bulgarian economy after 1989, it possesses, regardless of its specifics and the “the variety of transition,” all the characteristic features that are possessed by a majority of the post-communist countries10).

Overall, we must note that neither the disintegration of the socialist bloc nor the subsequent transition period could be analyzed either within the neoclassical approach, or within the existing variants of Marxist political economy. Under the neoclassical model, a transition from one market equilibrium to another occurs as a single act, rapidly and relatively smoothly; besides, the methodological grounds were not suitable for analyzing the changes in a system, especially in case of transitions from non-market to market economies. On the other hand, the political economy of the Soviet type of socialism was completely unfit for analyzing the events for ideological (the possibility of socialist failure did not exist) as well as technical reasons (lack of availability of instruments). Essentially, it must be noted that unlike the Marxist interpretation of capitalism, which may be regarded as a consistent and generally recognized theoretical system, no other system was considered to be as consistent and generally accepted with regard to socialism; instead, there only exist countless scholastic and dogmatic verbal interpretations of socialism.

It is interesting to note that Marxist variants of transition period analyses did exist; however, these considered the transitions to communism. Moreover, it must be noted that Nikolay Bukharin’s famous book, Economics of the Transition Period, which released in 192011), possessed obvious drawbacks; however, it is the only book, when examined thoroughly, that offers a few interesting ideas that may be relevant even today. For example, it may be observed that a transition to a new state of economy or toward a new objective both in the past as well as the present (“present” refers to the market economy whereas “past” refers to the communist society) was viewed as a simple jump, i.e., a transition that was relatively short although painful. In both the cases, the Lenin-Bukharin’s version of the Marxist theory and the present neoclassical theory are identical. These theories indicate that a change from one system to another is not a slow, evolutionary open-ended process, but a jump. Bukharin’s book and a few other interesting studies from the early communist era were eventually forgotten by socialist scholars12).

Consequently, a theoretical vacuum followed, which obviously resulted in the emergence of new theories and ideas.

The transition in Bulgaria was characterized by a definite delay in the formation of a market economy, which permitted processes like forceful redistribution of wealth and ownership based on corruption, theft, and banditries (Vucheva, 2001) to creep into the system. This led the country into a serious financial crisis from 19951997, which ended with the introduction of a particularly conservative monetary regime—a currency board, thereby abolishing the monetary policy altogether (Berlemann and Nenovsky, 2004). After 1997, the economy of Bulgaria continued to follow a positive trajectory with high rates of growth, balanced public finances, growing foreign reserves, etc. The political decision for the enlargement of the European Union (EU) was quickly followed by the introduction of a currency board, which played the role of a second anchor for encouraging reforms (Ialnazov, 2003). Following the country’s accession to the EU on January 1, 2007, it was observed that the external constraints

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