BETTER REGULATION FOR HIGHER GROWTH 23/11/2010 John Daniel Pollner The World Bank Sofia, Bulgaria

BETTER REGULATION FOR HIGHER GROWTH 23/11/2010 Sofia, Bulgaria OUTLINE  Achievements  Challenges  Recommendations  Benefits

ACHIEVEMENTS POLICY REFORMER TRACK RECORD LEGISLATIONINSTITUTIONS LARACEA RIA DB: Taxes, Start-ups Tax Payments Better Regulation Program

Doing Business 2011

Time to deal with regulations … Source: Bulgaria ARC Survey (2009). Note: In 2007, average time = 17% (WB Enterprise Survey, 2007).

…and uncertainty about the rules… Source: Bulgaria ARC Survey (2009); World Bank Enterprise Survey (2007); BEEPS (2005).

Doing Business in Municipalities Law Enforcement Time to deal with Rules and Informal Practices State Fees Higher Regulatory Burden Compared to EU Peers CHALLENGES

 Additional requirements and duplication  Sitting on information  Lack of public registers  Lack of electronic submission of documents  Duplicate registration regimes  High local fees and taxes Putting more on business’ plate: MUNICIPALITIES

Still, a lot of time by firm’s senior managers lost in dealing with regulations…

Still, firms reporting unfair competition from informal business practices Source: BEEPS ( ).

LARACEA Act HAND OF THE STATE IN ECONOMIC ACTIVITY Lack of control unit No admin. register Sanctions Limited scope of the Act Limited use of “silent consent” Unfinished institutional frame Lack of RIA for new regimes

State fees: not fair nor transparent Lack of policy for state fees Based on old legal framework Weak Institutional framework for control Wrong incentives and lack of transparency Administrative burden for business

RECOMMENDATIONS Policy  Improve business conditions in Municipalities  Develop a policy on state fees and empower an “authority”  Develop a cost calculation methodology for fees Legislative  Amend the LARACEA Act  Expand the use of RIA  Revise legal framework for local administrative charges and state fees Institutional  Re-establish Better Regulation Unit authority within CoM  Set-up an on-line Administrative Register

BENEFITS Of time Of time LOWER COSTS FAVORABLE BUSINESS CLIMATE BETTER TRANSPARENCY LOWER INFORMALITY Of money Improved competi- tiveness Increased revenues Less red tape Trust