As in the other East European countries, the expectations for speedy privatization of a significant portion of the state-owned property proved unjustified in Bulgaria. The more essential reasons for this are the following:
- weakly developed private sector in the economy prior to the start of reforms. In 1989 the high share of the public sector in Bulgaria's economy was paralleled only in the former DDR and USSR;
- the strong centralization of the privatization process and the lack of adequate economic interests on the part of the participants in that process. Bulgarian legislation does not allow managers of state-owned enterprises to freely set up joint enterprises with Bulgarian or foreign companies or to participate in what has come to be known in Hungary as "spontaneous privatization";
- lack of experience on the part of both the Privatization Agency and the other state authorities involved in the privatization process;
- weakly developed domestic capital market and lack of legislation on stock exchanges and securities;
- lack of consensus among the political forces on the goals and techniques of the privatization of state-owned property.
The process of privatization only started in 1993, with the conclusion of the first privatization transactions. This took place nearly a year following the adoption of the Transformation and Privatization of State-Owned and Municipal Enterprises Law.