The project aims at studying patterns of extra-legal dispute settlement in post-Communist Bulgaria. It analyses the way disputes between economic agents were settled in the period 1992-1993, and what legal and extralegal mechanism were adopted in the process. Evidence suggests that the role of mafia-like organisations in the protection of property rights and dispute settlement diminished towards the end of the 1990s. Hence, the research project builds upon the hypothesis that by the end of the 1990s, informal business practices and mechanism had emerged to secure property rights, and various strategies had been employed to protect entrepreneurial businesses against disloyal partners, predation, and crime. This might be because state institutions designed to protect property rights and enforce contracts had been strengthened by the end of the period under consideration.

It is the project's goal to test these hypotheses against the available empirical evidence, create an additional, independent data-pool by collecting case-studies on different industries, survey statistical data on the various aspects of doing business in Bulgaria in the period 1992-1993, and bolster the quantitative data with semi-structured interviews with entrepreneurs.

The proposed research falls into an area, which has been under-explored so far. It hopes to contribute to the analysis of extra-legal institutions interpreted as a response to low trust in formal institutions, and hence shed additional knowledge on the relationship between institutions and social trust. While the study does not aim to challenge the relative importance of formal and informal institutions for the protection of property rights in Bulgaria, it hopes to elucidate the context in which informal institutions emerged, and deal with the types of dispute settlement practices that prevailed in the early 1990s.