This project seeks to identify, explain, and help dismantle institutional and policy barriers that impede free markets, individual freedom, and human flourishing, using Bulgaria as a case study. 

Led by Latchezar Bogdanov at the Institute for Market Economics (IME), an independent economic policy think tank in Bulgaria, the project will leverage IME’s decades of research and advocacy for market-oriented reforms in Bulgaria to integrate academic publication with actionable policy recommendations.

Over the past two decades, Bulgaria has achieved remarkable progress in its transition toward a robust market economy. This transformation has been guided by reforms centered on fundamental market principles: minimal state intervention, strong support for private property rights, freedom of choice, and rigorous protection of contractual agreements. A cornerstone of these reforms was the introduction of a 10% flat tax on both personal and corporate income in 2007, positioning Bulgaria among European Union member states with the lowest overall tax burden.

Despite the apparent benefits of low taxation as a catalyst for growth, its empirical impact in Bulgaria has remained largely unexamined. Significant gaps persist in understanding whether this model fosters sustainable growth and broadens the tax base, or whether it exacerbates fiscal vulnerabilities, institutional weaknesses, and inequality. Low taxes alone do not automatically generate a favorable business climate when courts or media are vulnerable to capture.

The research project from IME, focuses on three interconnected pillars: the efficacy and equity of the flat tax reform in Bulgaria; judges’ appointments as a mechanism for capturing the courts and weakening the rule of law; and the impact of media freedom on the business environment and public trust.

Using a mixed-methods approach, the project will link tax policy, judicial independence, and media freedom to economic performance, combining analysis of economic developments, policy analysis of reforms, and assessment of external shocks with institutional review.