News

Yavor Alexiev

The speed and quality of the administrative services and the rule of law are two of the leading elements that determine local business environment. In May 2013 IME carried out a countrywide survey among 1680 companies as part of the upcoming second edition of the study “Regional profiles: Indicators of Development”[1].

Conclusions:

• For a second consecutive year the data show a connection between the assessment of businesses about the quality of administrative services and corruption perceptions.
• According to the survey results, the interaction between businesses and local district and municipal administrations is best in Varna, Burgas and Plovdiv while the worst interaction is in Veliko Turnovo, Kurdzhali and Kyustendil.
• Corruption perceptions are highest in Veliko Turnovo, Kyustendil and Pernik and lowest is in Smolyan, Montana and Targovishte.
• The differences between the assessments of the various characteristics of administrative services from the most highly rated regions to the lowest rated ones are significantly smaller than the ones observed in corruption perceptions. In other words while the level of administrative services is more or less similar across the districts, corruption perceptions are considerably different.

Business assessment of the work of and interaction with the local administration

The assessment consists of several criteria such as staff qualification, skills and attitude, speed of the administrative services, clarity of local requirements and regulations and overall corruption perception. The overall assessment of the administration’s performance in 2013 is lower (3.3/5.0) than in 2012 (3.5/5.0).

Source: IME, „Regional profiles: Indicators of Development 2013“

Note: The spread shows the difference between the highest and the lowest ratings for every single characteristic of the administrative services. The evaluation is based on a five-point scale where 1 stands for ”very bad”, 3 means “average”, and 5 means “very good”.

The attitude of the staff and their qualification are the highest rated characteristic of local administrations in Bulgaria. . Even the lowest rated districts achieve results above 3 (average).

Meanwhile the speed of the administrative service and the clarity of local requirements of the administration remain the most problematic areas. The most considerable regional differences are also connected with these two characteristics.

Trends: Some minor structural changes in the business survey make a direct comparison between data from 2012 and 2013 improper. However, it is important to note that for a second consecutive year Burgas is one of the top 3 most highly rated districts, while Kyustendil is one of the districts that receives one of the lowest ratings. Among the five best performing districts for a second consecutive year are also Smolyan and Pazardzhik, whereas the administration services in Stara Zagora are still perceived as one of the worst.

Corruption perceptions

The survey evaluates the corruption perception of local businesses in regard to the district and municipality administrations, police and judicial authorities, as well as the local Labor Inspectorate. In 2013, the overall corruption perception in the country has deteriorated from 3.4/5.0 to 3.3/5.0.

Source: IME, „Regional profiles: Indicators of Development 2013“

Note: The spread shows the difference between the highest and lowest rated districts in regard to corruption perception in each of the listed institutions. The evaluation is based on a five-point scale, where score 1 stands for “very high level of corruption”, 3 means “average levels of corruption” and 5 means “very low level of corruption”.

In terms of corruption perceptions there are serious discrepancies. The highest levels of corruption are considered to be in the municipalities and the judiciary system. The lowest levels of corruption are in the local sub-divisions of the Labor Inspectorate. Corruption is the highest in Veliko Turnovo, Kyustendil and Pernik, and the lowest levels are in Smolyan, Montana and Targovishte.

Trends: For second consecutive year, Smolyan and Targovishte are among the three regions with the lowest perception of corruption, while Pernik and Kyustendil have some of the highest. Veliko Turnovo once again ranks among the 5 regions with the highest corruption in the country.

National data

Administrative services and corruption - For a second consecutive year the data show a connection (moderate positive correlation- 0.65) between business’ assessment for the quality of administrative services and corruption in the country.

Source: IME, „Regional profiles: Indicators of Development 2013“

Note: The assessment of the performance of local administration is based on a five-point scale, where score of 1 means “very bad”, 3 is “average” and 5 is “very good”. In evaluating corruption score 1 means “very high level of corruption”, 3 is “average” and 5 - “very low level of corruption”.

Irregular payments - nearly 15% of the respondents think that illegal payments from companies in their sector to the administration are made “often” or “very often” in order to obtain public procurement contracts. Around 12 % believe that it happens “often” or ‘very often” when it comes to getting registrations and permits from local authorities.

Source: IME, „Regional profiles: Indicators of Development 2013“

Electronic services are used by 21.7% of the companies with up to 10 employees and 34.7% of the companies employing between 11 and 50 people. Large companies are the ones that most often use e-services provided by the local administration - in the last 12 months preceding the survey 50.4 % of them did so. Small and medium businesses evaluate their quality as “rather high” (3.48/5.00). The assessment of the large companies is even higher- 3.77/5.00.

Source: IME, „Regional profiles: Indicators of Development 2013“