Articles

• Rumen Brusarski — University of National and World Economy

  THE DYNAMICS OF PUBLIC EXPENDITURE IN BULGARIA (2014–2023)

  Abstract ▾ PDF

  стр. 7-20

  The modern state provides public goods, redistributes income and wealth, and ensures macroeconomic stability. It incurs expenses for this purpose which are financed (mainly) through taxation. In this sense, the scale and structure of public expenditures are key indicators of the state's participation in the economic life of its society. This article is devoted to the dynamics of public expenditure in Bulgaria over the last ten years (2014–2023): its total amount, current and capital expenditures, and expenditure by function.

• Giovanni Paiela — independent researcher in the field of Marxian economics with no current affiliation

  A MARXIAN MATHEMATICAL MODEL OF CAPITAL ACCUMULATION IN A TWO-SECTOR ECONOMY

  Abstract ▾ PDF

  стр. 21-38

  The purpose of this paper is to construct a macroeconomic model of capital accumulation of a two-sector economy, building upon the Marxian model of expanded reproduction with which the factors of economic crises can be derived. Its methodology involved the simple generalization and formalization of the relations between the two economic sectors laid out by Marx in Capital, Vol. 2. On top of that, a time variable was added to make the system dynamic and so that it would evolve over time. The model has succeeded in covering some of the gaps in both Goodwin’s and Foley’s models by accounting for various parameters which Foley and Goodwin assumed to be constant. After the model was developed mathematically, a sensitivity analysis was run on it in which technical changes, wage fluctuations and other variables were introduced. Not only was the model found to be consistent with Marxist theory, but four causes of crises were also found following a sensitivity analysis. The model has its limitations, which are discussed in the conclusion, yet it can certainly be built upon in the future.

• Albena Vatralova — Climate, Atmosphere and Water Research Institute, Bulgarian Academy of Sciences

  PUBLIC–PRIVATE PARTNERSHIP IN INFRASTRUCTURE SECTORS: A REDISCOVERED OPTION

  Abstract ▾ PDF

  стр. 39-54

  Governments around the world turned to public-private partnerships (PPPs) to design, finance, build and operate infrastructure projects in the 1980s and particularly the 1990s. This increased cooperation between the public and private sectors for the development and operation of infrastructure in a wide range of economic activities was provoked primarily by the limitations of public funds to cover investment needs but also by efforts to increase the quality and efficiency of public services. During the global financial crisis of 2008–2010, interest in PPP models for delivering public services significantly decreased worldwide. Still, there has been sustained attention towards this form of cooperation for the implementation of projects benefitting society on the part of international institutions. Public–private partnership as a management tool entails a paradigm shift from paying for public services to focusing on delivering better services. The present study examines and analyses the essence of PPP. The need for PPP in infrastructure sectors is justified, while its characteristics and main models are also examined. The mechanism of its implementation is described, and the role of the various stakeholders is discussed. Finally, the necessary business environment conditions are formulated, and conclusions regarding the successful implementation of PPPs are drawn.
• Nadezhda Ivanova — Economic Research Institute аt BAS

  HOW DID EU MEMBERSHIP AFFECT BULGARIA'S COMPETITIVENESS?

  Abstract ▾ PDF

  стр. 55-71

  When Bulgaria joined the EU, given the membership-related liberalization of trade both within the Community and towards third countries, competitiveness was defined as the main challenge for our country. In this regard, it is of particular interest to trace whether or not Bulgaria's membership in the EU has led to higher competitiveness. The main aim of the research paper is to present, in absolute and relative terms (compared to the other EU member states and countries in the process of accession) the state and the change in competitiveness level of our country at the macro level after the accession to the EU. This is achieved by examining the state and change of macroeconomic competitiveness in absolute and relative terms through the results in the most extensive comparative study on competitiveness in which Bulgaria is periodically present throughout the period of European membership, namely: the World Competitiveness Yearbook of the International Institute for Management Development. Among the key research findings, our country’s lagging position in the main international rankings and unsatisfactory performance in terms of competitiveness compared to the other EU member states and the countries in the process of accession stand out; Bulgaria has failed to benefit from EU membership and competitiveness remains a major challenge for the development of the Bulgarian economy.

• Sevgi Osman — PhD, Chief Assistant Professor at Varna Free University “Chernorizets Hrabar”. ORCID 0000-0002-5108-5476

  Nedyalko Valkanov — PhD, Associate Professor at University of Economics – Varna,

  SHARI’AH COMPLIANCE IN A EUROPEAN BANKING CONTEXT

  Abstract ▾ PDF

  стр. 72-96

  Compliance rules existed even before the earliest modern financial and banking regulations. This paper aims to compare compliance systems in terms of the principles of Islamic finance with those of conventional finance and to determine whether they can exist “under one roof”. It focuses on the importance of Shari’ah compliance in Islamic corporate governance and the main body for its assurance – the Shari’ah Supervisory board, which takes various shapes in different legal and regulatory systems. Using the content analysis method, Shari’ah compliance among European Islamic banks (or Islamic windows) was investigated and on this basis the conclusion was drawn that, with the help of internal and external efforts, an effective framework for Shari’ah compliance can be ensured even in traditional financial institutions. Such a framework is needed mostly for the clarification of Shari’ah rules and norms in societies with a vested interest in Islamic financial markets and products.

• Yonko Yotov — UNWE, National Revenue Agency, Bulgaria

  EXCISE TAX COMPLIANCE RISK MANAGEMENT IN BULGARIA: LIMITATIONS AND GUIDELINES FOR OVERCOMING THEM

  Abstract ▾ PDF

  стр. 97-127

  Risk management regarding excise duties is essential to achieving the goals of the revenue administrations under the Ministry of Finance in Bulgaria, namely the Customs Agency and the National Revenue Agency (NRA). It is crucial for the fiscal stability of the country. The article examines the current state of the excise tax compliance risk management framework in the context of the Bulgarian Customs Agency, which is responsible for its administration, as well as opportunities for its improvement in accordance with best practices from national and European tax and customs administrations. It presents the essence of the excise risk arising from non-compliance with legislation by taxpayers and how to manage this risk. The results of a survey conducted in December 2024 and January 2025 among a total of 238 experts in the fields of financial control in Bulgaria, working at the NRA and the Customs Agency, as well as lecturers at the University of National and World Economy in Sofia, the Dimitar A. Tsenov Academy of Economics in Svishtov, the University of Economics in Varna and other universities, mainly from finance and accounting faculties, are also presented. The results of the survey show that the risk management framework for excise tax compliance in Bulgaria has conceptual weaknesses when compared with best practices elsewhere. The need to rethink some basic components, elements and activities of risk management are outlined in the formulated recommendations.