Countries of the former socialist block are very often considered, almost habitually, in a unified category. Nevertheless, during the last five years, students of international studies are paying more attention to the differences that emerge from an analysis of Eastern European countries, than to the commonalities. There are complex patterns of internal and external elements and of various conditions that interplay with different groups of actors, worth being discussed individually in each case (Sorenson, 1998:25).

This paper attempts to bring together the factors and empirical evidence of democratic transition in Bulgaria and offers a snapshot of the democratic structure of the country. The paper has three parts. The first part introduces Bulgaria, with an overview of its historic and social background projected to the present. The second section examines the democratization process and the activity of USAID in Bulgaria. The third section describes and analyzes the reform of the judicial system in Bulgaria.

Population: 7,707,495 (July 2001 est.)

Area: 111,015 square Km

Ethnic groups:

Bulgarian 83%, Turk 8.5%, Roma 2.6%, Macedonian, Armenian, Tatar, Gagauz, Circassian, others (1998)

Religions:

Bulgarian Orthodox 83.5%, Muslim 13%, Roman Catholic 1.5%, Uniate Catholic 0.2%, Jewish 0.8%, Protestant, Gregorian-Armenian, and other 1% (1998)

Historic Overview

Situated at the crossroads of Asia and Europe, Bulgaria has had a very interesting historic evolution. The territory on which Bulgaria is situated today was part of the Roman Empire until late 6^th century when the Slavs, nomad tribes from the Ural region, migrated there. The immigration of the first Bulgars overlapped that of the Slavs in the seventh century. Of mixed Turkic decent (the word Bulgar derives from an Old Turkic word meaning "one of mixed nationality"), the Bulgars were warriors who had migrated from a region between the Urals and the Volga to the steppes north of the Caspian Sea, then across the Danube into the Balkans. Besides a formidable reputation as military horsemen, the Bulgarians had a strong political organization based around their khan (prince). Later, the Slavic language came to dominate, and the Bulgarian culture was built from the 9^th century on around the Orthodox Christian religion. Bulgarian became the first written Slavic language, and the Cyrillic alphabet, inspired by the Greek alphabet, was adopted by most of the countries in the region (including by the Romanians, a non Slavic population).

From 1386 to 1878 Bulgaria was part of the Ottoman Empire. The status of the local population during the centuries of occupation was characterized by constant pressure towards assimilation. The administrative apparatus of the Empire introduced multicultural and polyglot bureaucrats, replacing the local elites. The core of Bulgarian culture resettled to the villages that became isolated and relatively ignored by the central authorities. This isolation allowed the perpetuation and preservation of the Bulgarian culture over the centuries. Political and ethnic rights were suppressed. The Greek Orthodox Church, the orthodox Christian institution recognized inside the Ottoman Empire, had only formally extended its authority over villages in Bulgaria, which were, in fact keeping the specific Bulgarian orthodox traditions. Nevertheless, the language, religion, and cultural identity of the Bulgarians, although strongly influenced by the Ottoman occupation, remained the main element of national identity.

First independence movement was launched by Georgi Rakovski in 1862. The legions were situated and trained in Romania and Serbia. The movement rose in the following years under new leaders like Vasil Levski, Liuben Karavelov, and Georgi Benkovski., viewed by the Bulgarians as national heroes.

In 1878, following wars between Russia and the Ottoman Empire, Bulgaria gained its independence (Treaty of San Stefano, Treaty of Berlin, 1878). In fact, Bulgaria remained under Ottoman tutelage and fully gained independence later in 1913. In 1878 the Christian Bulgarian population in Bulgaria was a minority. During the next 20 years, large numbers of Turks and Muslims would leave the country as the result of a campaign waged by the new Bulgarian authorities.

Between 1877 and 1911 Bulgaria’s economy grew considerably. Three hundred new industrial plants appeared and a strong banking system was built with the help of western financing. Nevertheless, in 1911 foreign debt was three times the size of the GNP and required 20% of the budget to pay only the interest.

Bulgaria entered the First World War along with the Austrian Empire and Germany and suffered losses of its territory (part of the region along the Danube River, to Romania, in south and west to Greece and Serbia). In the interwar years, the country was relatively stable and advanced economically. Between 1929 and 1939 the Bulgarian economy grew at an average of 4.8 %, well above the European average. Industry contributed in 1938 only 5.6% to the output, the majority of GDP came from agriculture.

The Second World War found Bulgaria on the side of Axis powers. After the war, Bulgaria became a satellite country of the Soviet Union. The country’s economy was not as much affected by the war as those of its neighboring countries. The Soviet Union did not ask for war reparations. The Soviet style political system was put in place and the economy followed the Soviet model. Five year plans were adopted and agriculture was remained primitive. In the following years the average real salaries and agricultural productivity rose dramatically (75%). The centralized economy made rapid industrialization possible. In 1957 Bulgaria implemented the first agricultural pension and welfare system in Eastern Europe. In 1960 the first attempt to decentralize the economy was made by Todor Zhivkov, but the project failed and was abandoned in 1963.

During next twenty years Bulgaria followed an economic pattern common to all former socialist countries in Eastern Europe. As a result of major industrialization processes and investments in the agricultural sector, mainly in the area of food processing, the economy experienced steady growth. In the late 80s this trend arrived at a halt due to the blockages that appeared within the very rigid market of the Council of Mutual Economic Assistance led by Soviet Union. New trade agreements with Western European countries, mainly Germany and France, brought relatively constant resources to the fading centralized Bulgarian economy.

All former socialist countries had to face the severity of structural transformation after 1990. East Germany, the Czech Republic, Hungary and Poland were visibly more advanced and the recovery from transition in these countries was faster. Since the development process before 1989 was rather uniform in all socialist countries and characterized by centralized strategies, there is little to be said about the period in between 1970 and 1990. The tares of the socialist order are now subject to historic research, and the development model as such was entirely abandoned (except in Cuba and North Korea). We will focus our attention on the changes that occurred during the last decade.

In 1990 Bulgaria changed its political regime and began building social reforms and a market oriented economy. In the first years the economy encountered a major setback. Inflation was rampant, with an average of 81.2% per year from 1990 to 1995 as opposed to an average of 1.2% per year for the period between 1980 and 1990. The economy had to be privatized and institutional framework adjusted to meet the new conditions. While political rights and civil liberties were very quickly positively changed, the institutional framework, rule of law, implementation and sanctions of the new legislation lagged behind throughout the decade. The new political class that replaced the communist rulers originated from the second echelon of the socialist political apparatus. They had the knowledge, capital and connections for building the new Bulgarian capitalist class. What has appeared to them to be a simple substitution of the variables within the equation of power was in reality more complex. The mentality of both the ruled and the rulers was the main variable entirely forgotten. Rather from an instinctual sense of conservation coming from forty-five years of communist propaganda about changing mentalities, the new political class avoided the subject. Meanwhile, the new-old elite probably realized that the process of purging mentalities, if it was to begin, it should start with them. This endeavor is still challenging most of the socialist countries even today.

Bulgaria has embarked on fundamental changes of its economy and socio-political order. Economic growth has recovered, after a sharp decline in the mid 1990’s and reached 5% of GDP in 2001. Exports represent now more than a third of GDP and the share is rising. Agriculture has become less important as GDP share and now produces less than its potential. Industry was heavily affected by the transition. After a steep decline, it now accounts for one third of GDP. The status of the country has radically changed from totalitarian to free and has economic and democratic standards close to those of western countries.

Table 1. Main indicators

The transition in Bulgaria was nevertheless a hard and bitter process for most Bulgarians. What has emerged from the political dilemma of renewing elites was soon to become a lesson that inevitably, again, has hit the population hard. Due to the perpetual "mismanagement" of the economy, the country was going directly down a dead end road. The governments that came to power from 1990 to 1997 rushed to privatize everything, at any price, often based on the advice of international financial institutions. The privatization and the deficit created by excessive spending and external borrowing led to the collapse of 1997. The state administration became an instrument of enrichment for the political class. The administration maintained its power by developing support networks, generally based on economic favors. Although this resembles patron-client relationships with the state securing power through patronage networks, it is more a reflection of corruption in the political culture. Initially, the retaining of power was similar to the situations created in Latin America, when the old elites retained a high degree of influence (Sorenson, 1998: 55). Nevertheless, in Bulgaria political class obtained more legitimacy through a series of free and democratic elections. The government also used its power to extract small bribes and gifts. In 1997 a press release from the World Bank presents the background of the request of the government official for an emergency loan: "Facing a deep economic crisis, Bulgaria’s GDP declined between 8 percent and 10 percent in 1996 with foreign currency reserves shrinking to about US$ 445 million at end-February. Furthermore, the inflation rate in February reached an unprecedented peak of 243 percent, resulting in a cumulative inflation of about 392 percent in 1997. In addition, from the beginning of 1997 until mid-March the exchange rate depreciated by 247 percent, while the level of the average salary in the public sector shrank from a US $70 1996 average to as low as US $25 in January 1997. Bulgaria also still has foreign debt payments totaling about US$1 billion in 1997."

Internal causes of the 1997 failure were related to political instability. Notably, the new government formed by the Socialist Party, which took power in 1997, paid also for the mistakes of the previous governments. The laissez-faire policy promoted ferociously in Eastern Europe after 1989 had proven its flaws. Even international financial institutions as the IMF and the World Bank strongly believed that swift economic liberalization was the solution. What external actors failed to anticipate was, again, the managerial ability of the newly formed capitalist class and its mentality.

Economic inequality grew constantly, compared to 1990 when inequality was theoretically inexistent.

Table 2. Income distribution inequality

Despite all obstacles, in real terms the economy grew constantly but has not yet reached its peak from 1989. It is the so called "0 growth" long awaited by the most of the former socialist countries. In 2000, the Bulgarian GDP was at 81% of its 1990 size. Bulgaria’s human development indicators, discussed in the second section of this paper, show an increase in the rate of literacy, life expectancy and lower infant mortality compared with 1990. The progress can be explained through the simple argument that Bulgaria benefited from its openness and the infrastructure already in place. Once the borders were opened for foreign investments, the technology and information made their way to the local industry and services. Despite the lack of institutional and legal framework, progress was possible because of the extraordinary forces of globalization, expressed in Bulgaria’s case within the context of EU enlargement. It should be also noticed that the country came from the era of Soviet patronage with a large educated segment of the population. If we follow the model of structural transformations adopted in other countries, an educated population is the key towards economic growth (if there are no natural resources or capital). As the capital and the institutional framework have improved in quality and quantity, the only conclusion is that there is no alternative than growth. Theoretically, at least… What in fact the indicators fall short of describing is the amount of frustration and deprivation the poorest part of population has endured. The average salary fluctuated over the last 12 years, and was constantly affected by inflation. In 1997 it reached the lowest level, about 25 USD. Today, it is stabilized at around 125 USD. The unemployment rate for 2002 is almost 19%. Also, for a country with such human potential, the expectations of the local population were considerably high. The social cohesion that characterizes democratic countries was almost wiped out by the communist regime. The mass privatization and emerging capitalist class have added to the almost now endemic lack of confidence of the population in the path the country is pursuing. In its initial stage privatization was similar to asset stripping, enrichment of political cronies and nonfunctioning justice. The evidence for the population’s disappointment can be found by the growing gap between rich and poor and the distribution of income discussed earlier.

Table 3. Private sector evolution

As we can see, apparently there are not significant external factors that negatively affected the development process in Bulgaria in the last 12 years. The country started accession negotiations with EU in 2000, and despite the fact that it might not be invited to join EU in 2004, the course of integration is irreversible. For the next decade, countries in the region will be subject to a new developmental approach that appears to become an increasingly EU responsibility.

I. Indicators and their Interpretation. The UNDP Human Development Report is a comprehensive reference for an efficient assessment of the extent of democratic governance in Bulgaria. In the following table are laid out the objective and subjective indicators of governance. Each of these indicators will be interpreted in the context of democracy building in Bulgaria.

Table1. Subjective and objective indicators of governance according to Human Development Report 2002

Bulgaria’s progress in the field of democratic governance has proceeded at an uneven pace. From 1990 to 1997, the country went through a process of profound transformation. The main democratic institutions necessary to the healthy functioning of a democracy were created from scratch. Therefore, there was no institutional continuity and the indicators presented above have to be interpreted in this light.

Our attention should be concentrated on few core indicators and from there on we shall move to the outer layers of democratic governance construction. The most recent parliamentary election in Bulgaria, in 2001, brought to power a new coalition of political parties and the former king Simeon II Saxe Coburg Gotha became the new prime minister. It should be noted that the outgoing government was the first since 1989 to serve a full 4 year term in power. The turnout was quite high, for western standards (67%), while the previous 1997 elections turnout was 58.7%. Nevertheless the overall trend suggests, as demonstrated by the presidential elections in 2001, that the voter participation is decreasing. Only 41.5 percent participated in the first round, while 54.92 percent voted in the second round.

Women’s participation is relatively strong compared to other countries in the region. Women have 26.2 percent of the total number of seats in the parliament. The increasing rate of women’s participation in political life is not a necessary consequence of the democratic transformation of the last decade. The communist regime promoted in all countries of Eastern Europe a strong policy of women’s empowerment. This policy was nevertheless aimed at increasing the output from industrial sector and having more people working, rather than improving gender equality. As to women’s right to vote introduced in 1944, relatively late compared to other countries in the region, it should be noted that today no political force is considering its campaign strategy without relying on this segment of their constituency.

Civil society is also going through an intensive process of consolidation. The non-governmental organizations were numbered in 2000 at 1,277. This is an astounding achievement for a country that had none of these organizations twelve years ago. The effectiveness of the NGO sector and its impact on democratization is still weak, but after the economic crises of 1997, the country has received a substantial infusion of funds and expertise in the field of NGO management. As a component of civil society, trade union membership has 51 percent of non-agricultural labor force enrolled. This is a very important segment, where often the political parties and major political actors seek support and test their brewing political decisions.

Bulgaria has signed and ratified all major instruments of human rights. Although this has happened also before the regime change in 1989, there are still major issues to be solved. Among them the rights of ethnic minorities and particular the situation of Roma and Turkish population needs prioritized attention.

As mentioned earlier, we reviewed the core of functioning Bulgarian democracy. The subjective indicators advanced by the UNDP Human Development Report mirror the situation derived from the institutional setup in Bulgaria. Civil liberties and political rights have not suffered fluctuation since the regime change. While Bulgarians have more opportunities to participate in the political life, through affiliation to a political party or in the non-governmental sector, the overall trend reflects apathy towards political involvement. One cause of this phenomenon may be the growing frustration of Bulgarians with the ever deteriorating standard of living and ineffectiveness of government policies.

Freedom of the press is one of the major achievements of the last decade of democratization. After censorship of the media was abolished in 1990, Bulgaria saw a boom in media. Unofficial statistics show that more than 2,000 dailies and periodicals started to come out following 1990. There were some 500 newspapers and 300 magazines published in late 1995. Cable TV and new local and national channels appeared almost everywhere. A process of consolidation followed, with the major players in the industry expanding, but the bottom line of this phenomenon is that Bulgarians have unrestricted access to information. About 7.6 percent of the Bulgarian population goes on-line.

The comprehensive measurement of the rule of law leads to other consequent indicators as corruption perception and graft. The country had generally weak political stability for most of the last 12 years, but after 1997 the situation has improved. The current government, although it is facing growing unpopularity due to the toughness of the economic reforms, has good chances to end its mandate in 2005. It can be noticed also that all the political and social changes in Bulgaria were brought about without the use of violence. Even during the 1997 crisis the country was not threatened to fall into anarchy, although the financial system collapsed. While the lack of violence during contestation of political power is viewed as an asset by the Bulgarians, some scholars viewed this fact as a mere ability of the elite (former communist "nomenklatura") to preserve its influence and engage in negotiations with the masses in order to protect its interests (Sorenson, 1998: 29).

Democratic governance was affected from the beginning by the absence of a strong legal framework that would ensure the proper function of the government and society, in general. Vested interests were behind the systematic opposition to introduce viable reforms in judiciary system. Rigidity, corruption and rapid economic decay contributed decisively to the emergence of economic and political crises in 1997. Even after four years of sustained reforms, government effectiveness is still extremely low and corruption and graft are high. Nevertheless, Bulgaria’s corruption index has improved for 2002 to 4.0, as opposed to 3.9 last year. One of the main causes of corruption in transitional Eastern European democracies was that economic resources were controlled by the state. As almost 70 percent of the Bulgarian economy is now owned by the private sector, a due decrease of corruption followed. Certainly the legal framework and the pressure exercised by European Union and other international partners contributed to this course of action. Despite the improvements, 57 percent of Bulgarians believe that the politicians are primarily interested in protecting their personal interests or those of their cronies.

II. Discussion. Once we acknowledged current stage of democratic governance in Bulgaria, we shall see what lies beneath those achievements. Primarily we should see whether the pre-conditions of the democratic governance were present and how that affected later development. According to Sorenson, there are four major preconditions necessary for a democracy to be built successfully.

Bulgaria was in 1989 if not modern, at the western standards, at least among the most modern in the former socialist bloc. If modernity is interpreted in terms of literacy, women’s participation and infrastructure, then we can consider Bulgaria on the right track. The wealth accumulated during the communist regime was mainly invested in infrastructure, since the industrial sector almost collapsed under the pressure of western competition. In Bulgaria’s case a trade off between democracy and economic development can be spotted. Up to now, those two objectives could not be pursued concomitantly. The establishment of democratic institutions led to drastic deterioration of economic base. As was also the case in other Eastern European countries, the gap between institutional framework and democratization objectives led to chaotic economic transition. Only in last few years economic growth became a major goal, while the consolidation of democratic institutions is also pursued.

The existence of political culture and its role towards democracy, it is a bit problematic in our case. Bulgaria’s transition to democracy was not a result of a long term, internal process. As it was the case of other socialist countries except Hungary and Poland, in Bulgaria the decision was made by the elites under the pressure of external factors (USSR, regime change in all Eastern European countries, western financial assistance). Therefore, the political culture is just emerging, or at least was replacing the old political culture. The democratization process was visibly slowed down for several years and the shape and spirit of reforms were very much adapted to the needs of the elite. Democracy is now more identified with private ownership, individual responsibilities and political engagement, but unfortunately also corruption, frustration and incertitude. Bulgarians proved through elections that can distinguish the options democracy offers, regardless of political affiliation (currently Bulgaria has a former king as prime-minister and the leader of former communist party as head of state).

The social classes were simply not existent in 1989 in Bulgaria. The essence of the communist regime was based on total abolition of the previous social structure. Therefore, we cannot identify a "middle class" or lower class at that point in time. It is also, to some extent difficult to identify the elite class as a clearly distinctive body, except the party apparatus. But for the purpose of our analysis we can spot a faction within communist party that was eager to adopt the path towards democracy. Petar Mladenov, the minister of foreign affairs at the time, later to become Bulgaria’s President, and Defense Minister Dobri Dzhurov has headed that faction and called for democratic elections. As Thomas Weiss remarks about the old-new communist elite: "they understood that the form, if not always the spirit and content, of elections were prerequisites to legitimize their rule and to attract Western financing".

The fourth precondition was in fact the determining one: external factors, or as Timothy Garton Ash cited by Sorenson, the three basic factors, "Gorbachev", "Helsinki" and "Tocqueville". After the first wave of regime changes across Eastern Europe and clear signs from Mikhail Gorbachev that Soviet Union will no longer intervene to "prop-up" the regimes in Eastern European countries, there was no other choice for Bulgaria. The need for financial aid from the West, the anticipated expansion of NATO and EU and the turmoil that was to erupt in neighboring Yugoslavia raised the awareness of the Bulgarian political elite about the must of democratization. This leads us to the type of transitions defined by Sorenson.

Like most transitional democracies in Eastern Europe, Bulgaria can be identified within the description of democracies plagued by acute social and economic problems. The reasons that led to this evolution are not hard to find. First of all, back in 1989 there was no private sector at all, and the society was supposed to become centered on the idea of private ownership. The hastily promoted privatization of state assets, fully backed by the IMF and World Bank among others, while there was no legal or institutional framework for such an action, was certainly a decisive blow to the social cohesion. The export sector that was supposed to bring the necessary stability in country’s economy was instead literally looted by the new-old elite. Designed to bring additional resources to the budget, privatization depleted it even more. The new-old elite were on their way to become the most fervent supporters of the capitalist order. Communism for them was just a bad dream; the bright future was opening like a flower, with them in the center. It is known that the population was caught in a web of aspirations, hope, excitement and expectations. That lasted for no more few years. Disappointed and disillusioned Bulgarians gradually lost faith in the rules of the game and, today, after 12 years of experimenting with democracy, they see the political scene as a mere instrument for becoming rich and influential. The type of transitions towards democracy in Bulgaria resembles also the characteristics of a restrictive democracy. Although there is not such a clear cut gap between the elite and "the others" like in Brazil, the consequences of transition show that the results tend to become similar. The elite in Bulgaria have been already purged from having exclusive political power, but they still control most of the economic activity in the country.

Bulgaria, as most of the countries in Eastern Europe had to cope with a trade-off between democracy and economic and social development. While in some Asian or Latin American countries the transition required a consolidation of State’s power, in order to achieve rapid economic growth, in Bulgaria the situation was reversed. The state purposely became weak and the economic and social development was sacrificed for the sake of restructuring the entire society. With the state devolution came the rise of non-governmental sector, which is largely sponsored by Western institutions and that was considered to be a victory of democracy. Indeed, Bulgaria, together with most of the former socialist countries needed to create a new citizen, with new values and aspirations. The results of that endeavor are still very bleak. What the Bulgarians can see today is their deteriorating standard of living, fear of tomorrow and absence of hope closely related to desperation. The freedom of speech, all political and civil liberties are now assumed to be intrinsic part of the values Bulgarian society is built upon. Contestation of power has been adopted as the main principle of governing the country and there is no political actor that sees alternative to this. People’s participation is slightly improving, at least according to the number of new NGO’s registered. As a scholar recently identified, there are 3 main reasons for which the participation rate is not increasing in post-communist countries. Legacy of mistrust of communist organizations is one of them, the persistence of friendship networks and lastly, the post communist disappointment. With the devolution of the state, while the non-governmental sector was still emerging and shaping itself, the non-formal structures filled the vacuum. People rely more on their relatives, friends and bribes than in institutions. The recent economic improvement praised by many Western countries is not viewed as a great success in Bulgaria. Thousands of people have lost their jobs and the government needs to get rid of many other rusting factories. There is no replacement though and today Bulgaria struggles with high unemployment.

In the equation of the trade-off between democracy and economic growth, a few new variables should be introduced, in order to acquire a better understanding of the current situation in Bulgaria. External factors helped the transition to be viewed as still attractive by Bulgarians. First of all, European Union through its unprecedented plans for expansion gave the Bulgarians hope that their long and painful transition will bring them a place in the EU. The visa regime was lifted by EU in April 2000 and Bulgarians were able to travel and work within European Union. That brought confidence and money to the impoverished country. Bulgaria has just been reassured that the country will join EU in 2007 and more funds for accelerating the reform were promised. Moreover, NATO, a strategic alliance for Eastern European countries will include Bulgaria among its members beginning next year. United States, as a key actor that stood behind the decision to include Bulgaria in the next round of NATO enlargement has provided substantial funds and assistance through USAID. But these entire external mantles guiding Bulgaria’s navigating course can be rejected by population if the pace of the reform places the burden only on the population. As Jacques Rupnik notes:" history moves faster than politics, which moves faster than institutions".

III. Donors Activities. USAID is one of the major donor organizations in Bulgaria. It is surpassed only by World Bank and IMF and is managing the largest technical assistance program in the country. USAID is assisting Bulgaria to increase its democratic capabilities and consolidate its institutions. As a bilateral aid organization, USAID is promoting also the US interests. In Bulgaria USAID is directly interested in promoting US national security issues, regional stability, market oriented reforms and improving the rule of law and democratic institutions. With respect to the nature of USAID programs in Bulgaria, it should be noted that there are no major conceptual differences regarding the goals of its activities compared to other donor organizations. USAID is cooperating closely with organizations like European Union, World Band, European Bank for Reconstruction, UNDP. Bulgaria’s deficit in the field of rule of law and corruption is in the center of programs developed and financed by USAID. The strengthening of civil society through increased participation is also addressed by the organization’s activity. An important element in USAID strategy is supporting the small and medium enterprises and micro credit initiatives across the country. In this respect it should be mentioned that USAID is providing major financial and know-how assistance for the development and consolidation of market institutions, like stock exchange markets, financial services, economic information sharing. The organization has announced that its strategy for development assistance for Bulgaria will change towards greater emphasizes on the social dimension. More poverty reduction, reducing unemployment initiatives and educational and health improving activities will be the center piece of this new strategy. USAID affirms that Bulgaria, after 5 years of successful reforms needs to prioritize the problems that today affect the society at large, like poverty, unemployment and health care.

As mentioned earlier, USAID covers a wide range of development and programs. Accelerated development and growth of private enterprises in a competitive environment is a major category. The main target of this program is the creation of small and medium enterprises (SME) and the consolidation of the existing once. The program has to date positive results and it is currently expanding. The level of financing reached 5,675,000 USD in 2001. USAID has completed more than USAID completed 310 advisory assignments for SME and a total of 15 million dollars were allocated. As a result of the initiatives taken to boost the private sector, in 2000 Bulgaria’s GDP grew by 5 percent. Nevertheless, is to be noted that the massive inflow of foreign aid (more than 1.5 billion US dollars in 2001) is aiding to the GDP growth.

Another major category of USAID programs is the creation of a more competitive and market-responsive private financial sector. In 2001 USAID committed 9,123,000 USD for this sector. The programs address the banking sector, capital market, reform of pension fund, social security in general. The main objective is to develop adequate responsiveness in case that major economic or financial crises appear, like in 1997. The main beneficiaries of these programs are Central Bank, the Securities Regulator, the National Health Insurance Fund, and the National Social Security Institute. The large public will be also the indirect beneficiary of these initiatives, through the overall improvement of the economic and business climate. World Bank and European Union are co-donors involved in this category of projects.

Special categories of the USAID activity are programs that develop an increased, better informed citizens' participation in public policy decision-making. The programs include a wide range of targets like civil society, NGO, independent media, political process support, conflict resolution and reconciliation, and anti-corruption activities. More than 5,230,000 USD were committed by USAID in 2001 for this category of programs. In 2000, USAID launched the Conflict Resolution and Ethnic Integration Program, aiming to improve the situation of minorities by providing training in conflict resolution and cooperative planning skills, and by making small grants.

Judicial System is also one area that concerns the USAID programs in Bulgaria. The improvement of the judicial system is a key requirement for the functioning of the all other programs in Bulgaria, therefore USAID accords high priority to this type of projects. Also forthcoming accession to EU requires extensive reform of judicial system and adoption of a large number of laws and regulation (acquis communautaire). About 2,315,000 million USD were allocated by USAID to these projects in 2001. The program helps train the personnel of judiciary system, public administration and relevant sectors of governmental administration. To date the success of the program is appreciated as being positive and it is now run in conjunction with the programs relating the strengthening the rule of law.

USAID programs are dealing, within another category, with the local government and the decision-making process at that level, as well as accountability. The programs envisage the fiscal and administrative decentralization, local government management capacity and local government support organizations. In 2001 USAID dedicated 4,255,000 USD to this category of projects.

There are a number of special initiatives that have limited scope and duration, or respond particular opportunity that received funding from USAID. Support for Bulgarian-American Enterprise Fund, the humanitarian relief program, the Kosovo Educational Project, Biodiversity Conservation and Economic Growth Program, the Bulgaria Crisis Recovery Program, Internet Initiative for Economic Development, Peace Corps Small Project Assistance, and the Labor Force Restructuring Program are among these programs that were receiving funds amounted 1,950,000 USD, in 2001.

The results of the projects financed or managed by USAID in Bulgaria are not yet fully acknowledged, since most of them are still running and transition process is only approaching its final stage. The implementation of the projects is producing results that are noticeable in every day’s life. The banking system and financial market, which benefited from direct USAID involvement, is today the engine of the economic reforms of the country. The continuing training of specialized personnel in various sector of economy is also well known. Networks of NGOs, stimulated by USAID projects are expanding and consolidating, although slowly. Nevertheless, the overall assessment of current activities suggests that USAID assistance is a key factor for the country’s efforts towards consolidated democracy.

For Bulgaria’s transition, a clear delimitation of the public sector reform, rule of law and judicial reform, as components of democratic governance, is a bit problematic. Institution building was a process that evolved in very short time after 1989. Mistakes and difficulties regarding the functions of the newly created institutions impede not only the natural course of social life, but the deepening of democratic process. Rule of law is in this respect intertwined with the reform of public sector. A brief definition of the two components is necessary. Under public sector we find government administration, education, health and justice as well as the process of privatization of public assets. The rule of law presupposes the functioning and accountability of judiciary system, governmental structures, reform of legal system and access to justice. For the purpose of this paper we will focus our attention on reform of judicial system. Experience accumulated during 12 years of transition of former communist countries proved that a sound and well functioning judicial system is a prerequisite for successful implementation of other reforms. Economic growth, accountability, corruption, democratic governance are terms vitally related to the role of judicial system. Without an independent judiciary, governments and individuals would have no incentive to conduct in accordance to the laws and social norms. If the judiciary system is not free, then the sanctions for breaking laws would become selective and the concept of justice would lose its substance. A brief description and assessment of key evolutions of the court system, constitutional law and efficiency of these institutions will follow.

1989 meant for Bulgaria, as for other countries in the region, a new start of the judicial system. The popular tribunals that functioned during communist regime were entirely abolished and the vacuum was gradually, but fairly quick, filled with new court system. The reform of judicial system is an ongoing process. In 2002 a new Judicial Systems Act was passed by National Assembly. The Act is tackling issues regarding the overall efficacy of the judicial system, credibility and accountability of the magistrates. The results of the reforms are not immediate and more time and resources are needed for a fair evaluation. Nevertheless, currently the Bulgarians have limited trust in judicial system and often associate it with corruption. This is due to many corruption scandals made public and widespread conviction that bribes are always "greasing the wheels".

Despite the fact that Bulgaria is enlisted among the countries with a sound democracy and solid democratic institutions, the judiciary remains behind other sectors. Poor funding and frail overall administration is contributing to the weak performance of judiciary.

Bulgaria’s judicial system consists of a hierarchical structure of courts and the Constitutional Court. The French model civil system of laws applies. There are regional, district, and appellation courts. The Supreme Court of Cassation has the role to amend, overrule or confirm decisions made by courts hierarchically lower. There are also administrative courts, which have the functions of verifying the legality of administrative decisions made by the government or to demand the government to act when laws stipulate so. The constitutionality of different laws and government regulation are assured by Constitutional Court. The Supreme Judicial Council is a supervising body that formally oversees the entire activity of the judicial system, composed of judges, prosecutors, investigators and political appointees.

One of the reasons that the judicial system is lagging behind is linked to criteria of recruiting and quality of training for magistrates. Magistrates have a law school degree, obtained usually in five years. Subsequently they are supposed to attend a one year internship with the court. After that they are appointed as junior judges. After 3 years they are guaranteed a position for life (immovability). There are not precise guidelines as to how the vacancies are filled. The presidents of higher courts make the nominations for appointment to their courts.The Supreme Judicial Council then appoint judges. In reality this is a mere formality, since the nominations are made rather by belonging or knowing the right persons. Most of the young judges lack any judicial experience, since the law schools in Bulgaria do not offer training in practical skills. Nevertheless, the latest years brought also highly motivated, bright, young judges who are willing to serve for far less pay than they would receive in the private sector.

Another aspect that casts shadow on the judges’ activity is the lack of a code of ethics or a minimum training either in law schools or continuing professional education. There are numerous rules and regulations and specific provisions were recently introduced through the 2002 Judicial Act. Among them is forbidding the judges to hold appointive or elected office in national or local government, giving legal advice to any private corporations or engaging in any commercial activities.

Transparency of the activities performed within the judicial system is sometimes lacking, despite the strong presence of media communications. The public has unfettered access to the court rooms, but judges have the discretion over to whom and when access can be restricted. Nevertheless, the complaints regarding this aspect of courts’ activity is rarely criticized.

Judicial decisions are usually not published and public scrutiny is therefore almost inexistent. Yet, the most important appellate decisions of the higher level courts and the decisions of the Constitutional Court are published.

Among the magistrates, the prosecutors represent a category that has come often under criticism. There is a widespread perception that judges are in many cases under the pressure from the procuracy. This is a consequence of the communist organization of judicial system when prosecutors were de facto the ones that controlled the trials. Although today the role of prosecutors is strictly limited by Constitution and other specific laws, the reality is slightly different. There is a feeling that the prosecutors are independent figures inside the judiciary, often times using their influence to induce the judges to rule in their favor. Rumen Yankov, former president of the Supreme Court of Cassation was victimized by the Chief prosecutor who sought to control the judiciary. Yankov was forced to resign over allegations of being homosexual, assaulting a female colleague, beating a disabled women and being a former agent of secret police, although the evidence was never presented.

Salaries in the Judicial System have been seen as a factor that contributes to the spreading corruption and hampers the efforts to implement reforms. The pay scale used is related to other positions within the administrative structure of the government. For that matter, the President of the state, Chair of the National Assembly, and the president of the Constitutional court have the same salary. Adjusted proportionally are remunerated other levels of judiciary. Below are shown the salaries received by judges at different hierarchical level:

Junior Judge 520 leva US $260

Regional Court Judge 570 285

District Court Judge 630 315

Appellate Court Judge 740 370

Judge on Supreme

Administrative Court or

Supreme Court of Cassation 1000-1300 500-650

National average salary is in Bulgaria is currently 242 leva or approximated 120 US dollars. Below are listed also few other budgetary categories of personnel:

Minister 1.150 545

Member of National Assembly 921 436

Senior Expert in a Ministry 450 213

Minimum Teacher’s Salary 247 117

Under these circumstances many young magistrates are opting for working in private sector were they can earn as ten fold more than in the public sector. Many of the young judges are pursuing a short carrier of maximum 10 years and then, after they acquired the skills, knowledge and adequate networking they switch to advocacy. The same applies to state prosecutors.

Assignment of cases to the judges suffers from a lack of transparency and clear rules. Currently, the cases are assigned through lottery or based on based on areas of expertise. Theoretically, conflicts of interests or unevenly distributed workload could be reasons for removing a judge from the assigned case. There are reports of manipulation. World Bank Report cites: "private attorneys suggested that such abuse of the system may be happening". The Supreme Justice Council has adopted recently a software system designed to reduce the possibility of cases manipulation.

Beside the categories of judicial institutions briefly described above, the Constitutional Court stands out as a model of successful reform of the judicial system. The 12 member body had a constant and influential role in shaping the new democratic institutions in Bulgaria during the last decade. Formally, it has no jurisdiction over the legality of administrative acts of the government, but can decide over the legality of presidential and legislative measures. Citizens cannot appear before the Constitutional Court, only organizations or institutions. During the socialist governments, before 1997, the Court became a target of government efforts to damage its authority. The government first tried to cut the salaries of the judges and to abolish their pension entitlements, later tried to remove the Court from its building by cutting the power and forcing the judges to walkup the stairs. Despite all the pressure the Constitutional Court emerged as a real champion of democracy.

Reform of Judicial System in Bulgaria is advancing with an alert pace, yet with no distinctive or groundbreaking achievements. Corruption is still a widespread phenomenon and the public lacks the trust in judicial system. Accountability and transparency are gaining momentum. New generations of magistrates with different worldview and attitudes are enforcing the system. The process is slow and requires time, since the sole institutional capacity of the Bulgarian democracy is still consolidating.

Conclusion

Bulgaria has made important progress towards establishing a true democracy. What distinguishes the country from other countries in the region is the elite taken decision to make the transition from socialism and exclusive state ownership to market economy and democracy. The multitude of factors and unstable environment that characterizes transitional countries has made Bulgaria’s efforts even more difficult. The 1997 economic crisis has contributed to a substantial reinforcement of democratic institutions. The economy greatly benefited from the macroeconomic stability and the new image of a true reformer Bulgaria gained in international arena. On domestic level, profound reforms of judiciary system are implemented, creating new prospective for further democratization efforts. Constitutional court had a remarkably positive role, while keeping its unbiased status. International donors were very active and played a major role in the process of democratization. USAID was especially involved in projects that are at the core of a functioning democratic society. The process of transition appears to be irreversible. The focus of future analyses should be on the consequences of implementation of democratic institutions at the individual level. The people of Bulgaria are ultimately the beneficiaries of transition efforts. The question that rises is when that will be fully acknowledged by the people, and elites, with the same measure.

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