Administrative Inefficiency and Policy Ineffectiveness as Root Cause Leading to High Transaction Cost: Example: Slovenia 1993-1996

Countries suffering from high transactions costs are often victims of administrative inefficiencies and policy ineffectiveness at central governmental level. The objective of this article is to describe such inefficiencies and ineffectiveness as they presented themselves after Slovenia reached independence from the former Yugoslavia in 1991. In particular, the author describes the multiple causes of inefficient administrative and ineffective policies as they presented themselves in the subsequent period of gradual administrative modernization during the years of 1993-1996.

Most of the material presented and discussed is based on the experiences made during a bilateral capacity building and institution development project co-organised by Swiss and Slovene experts over the period of three years. Slovenia has since become a member of the EU however the analyses made, even though country and time specific, are nevertheless instructive for other countries transiting through similar development steps and challenges.