Bulgarian snapshots: An economist on holiday

It's been 20 years since the Soviet Union collapsed, taking the Bulgarian economy with it. Twenty years of transition and rebuilding. Bulgaria has (mostly) abandoned communism, (mostly) embraced capitalism and, in 2007, joined the European Union. 

All of which makes it a great place for an economist's holiday...

Ayn Rand's The Fountainhead tells the story of an idealistic young architect who fights to build the kind of modernistic masterpiece he wants, to flaunt convention.  

But the truth is, when people can build whatever kind of building they want, some people choose to build giant snails.

Actually I kind of like the snail.

Bulgarian capitalism seems to lack some of the restraints of Canadian capitalism. And it's not just the giant snail. The McDonalds here sell beer - now that's a real McHappy meal. (I tried to take a picture, but was stopped from doing so.) I don't know how many play areas in Canada are sponsored by Nesquik. To be fair, though, this playground is in Sofia's Grand Hotel, not a public space. 

I took the photo of Winnie the Pooh to illustrate a blog post on the "Disney Index." The Disney corporation actively protects its copyrights. The number of obviously unlicensed Disney reproductions available in a country could, I thought, be used as a measure of the strength of copyright protection in that country. Unfortunately there are problems with this Disney Index idea. Licensed and unlicensed materials aren't easily distinguished. The absence of pirated Mickey Mouse products might merely indicate an absence of demand for such goods. And when I looked at the photo on the computer I noticed a swastika on Pooh's stomach (you can see it if you click on the photo). It's not a common-place sight in Bulgaria, but it's not rare either - the far right party Ataka has won about 10 percent of the popular vote in recent elections. 

This final picture is here partly to wipe that previous ugly image from your mind. But there's economic content here also: the bee is of vital importance to the Bulgarian economy, both for fertilizing sunflowers and other crops, and for producing honey. And the bee is the symbol of the Royal Economic Society, an image taken from Mandeville's Fable of the Bees. 

Comments

[Linda Welling]

I like the snail, too, but am not sure exactly what it is...?

[Frances Woolley]

Linda, I'm told it's a kindergarten. Children in Bulgaria don't go to school until they're 7.

[Determinant]

Carry on then! How about a shoe next? Old Lady in a Shoe?

[Lars Christensen]

Frances, the country also had massive imbalances, a huge housing bubble prior to the global crisis broke out in 2008 – and then a massive collapse in economic activity and the recovery in the Bulgarian economy is clearly among the weakest in Europe.And not to mention and currency board arrangement, which has not exactly done much to ensure stability. And right now of course the countries is hit by yet another round political violence. Yesterday, two bombs exploded in front of the offices of two opposition parties. Corruption is rampant and so is organised crime. But yes, I also love the country, but it is hardly paradise. The crisis in neighbouring Greece hardly helps the economy, where close to a third of the banking sector is Greek owned.

On the positive side - most Bulgarians are nice, friendly and welcoming people and fiscal conservatism has been a rule in the country since 1997. And the country has a great Finance Minister in Simeon Djankov.

[Tim Worstall]

The McDonalds here sell beer - now that's a real McHappy meal.

True, but not sure that the Bulgarian version of capitalism is to blame:

"Not to spoil your fun, but yes, McDonald's in France -- and the Netherlands, Germany and Austria -- serve beer. "

[Frances Woolley]

Lars http://www.bloomberg.com/news/2011-07-19/bulgaria-faces-eu-crime-test-after-bombs-rock-party-offices.html I'm glad I didn't know that there had been a bomb blast the day before when I was walking around downtown Sofia.

Almost everything is cash-only. My host tells me that houses are used as a store of value, that is, people use their cash/crime earnings to build houses (no planning permission) in the mountains, but I have no way of substantiating that. Unfortunately we didn't get around to finding one and taking a picture.

Tim "McDonalds in France....serve beer"

I wonder if that's a product of laxer licensing laws or different social values or McDonalds targeting a different demographic, i.e. because Bulgaria is poorer McDonalds is a mid-market brand rather than a low-market brand.

[sglover]

If you'd gone to the Black Sea coast you could've seen miles of bubblicious resort construction, my particular favorite being the "Rich Daddy" condo complex. I met a couple of French expats in Varna, who told me that every legit sector of the economy was thoroughly penetrated by mafia guys. But then there's no truer capitalist than a mafia guy, so -- progress!

[Jacques René Giguère]

Frances: In the end, laws reflect social values.
As for the branding, it follows income level. I remember almost fifty years ago after finishing first at my school , my parents brought me to a Howard Johnson's ( shows how old I am...) for a hot chicken sandwich. Not because it was fun for a child but because even for my white-collar-professional-during-the-postwar-social-ascension parents, it was almost a luxury. In percapita income,early 60's Québec was about where Bulgaria is now , minus the mafia.

[Econometron]

Frances - You are one of the insightful and deep thinking economists in the blogosphere. I rarely agree with your policy recommendations but do appreciate your sharp analysis. You clearly understand incentives and the role of the unseen. You also write in sharp prose -- something others lack sorely -- and maintain a respectful tone in debates on highly contentious issues. For what it's worth (probably not much), this post just garnered you a fan.

[Frances Woolley]

Econometron - thanks so much! Frances