Simeon Djankov at World Economic Forum, Tianjin, China, September 13, 2010
|Deputy prime minister of Bulgaria|
July 27, 2009 - March 13, 2013
|Minister of Finance|
July 27, 2009 - March 13, 2013
|Born||July 13, 1970|
|Alma mater||University of Michigan |
University of National and World Economy
Simeon Djankov (Bulgarian: , Simeon Dyankov; born July 13, 1970) is a Bulgarian economist. From 2009 to 2013, he was the Deputy Prime Minister and Minister of Finance of Bulgaria in the government of Boyko Borisov. Prior to his cabinet appointment, Simeon Djankov was a Chief economist of the finance and private sector vice-presidency of the World Bank. He was an associate editor of the Journal of Comparative Economics from 2004 to 2009. Djankov was a chairman of the board of the European Bank for Reconstruction and Development. In 2013 he was appointed rector of the New Economic School in Moscow, a title he held until July 2015. He is a Senior Fellow at the Peterson Institute for International Economics, on leave for public service. Since November 2015, Dr Djankov is research fellow of the Financial Markets Group at the London School of Economics.
Simeon Djankov is listed as the most-published Bulgarian economist. In 2017-2018, he directed the World Development Report at the World Bank. Since 2018, Simeon Djankov is Director, Development Economics at the World Bank.
Djankov was born in Lovech, Bulgaria on July 13, 1970, Djankov attended high school "Ekzarh Yosif I" in Lovech (1984-89). In 1989, he passed the entrance exam to the formerly named "Karl Marx Institute of Economics" (today University of National and World Economy) . Simeon Djankov also holds a 1997 doctorate from the University of Michigan, on the topic "Three Essays on the Economics of Transition." His main thesis advisor was Alan Deardorff. During his tenure at the University of Michigan and the World Bank, Djankov published over 70 articles in professional journals. Journals include the American Economic Review, the Quarterly Journal of Economics, the Journal of Political Economy, the Journal of Finance, the Journal of Financial Economics. His co-authors include Nobel Prize winner Oliver Hart (economist), John Bates Clark Medal winner Andrei Shleifer, and MacArthur Fellows Program winner Sendhil Mullainathan. He has also co-edited the book "The Resolution of Financial Distress" with Stijn Claessens and Ashoka Mody. The book focuses on the principles of and practical approaches to addressing the public policy trade-off involved in systemic corporate and financial sector crises and the lessons learned from the changes taking place in bankruptcy frameworks around the world. It includes research on recent public policy initiatives for distress resolution or market-based restructuring. Nobel Prize winner Joseph Stiglitz was a contributing author.
In 2016, Dr. Djankov was asked to chair the 25th Anniversary event of EBRD in London and conference in Budapest. The anniversary event involved also Vaira Vike-Freiberga, former President of Latvia and Minister Imad Najib Fakhoury, EBRD Governor for Jordan. The conference on Reinvigorating Growth featured a debate with Bulgarian President Rosen Plevneliev, EU Commissioner Valdis Dombrovskis and EBRD President Sir Suma Chakrabarti.
After leaving the government of Boyko Borisov, Simeon Djankov joined the Harvard Kennedy School as visiting faculty. His teaching is focused on the politics of development. During his time at Harvard, Dr Djankov edited a special issue of the Journal of Comparative Economics on the 25th anniversary from the start of transition in Eastern Europe. Jointly with Anders Aslund at the Atlantic Council, he also co-authored a book on the transformation from communism. The book contains chapters by Leszek Balcerowicz on Poland, Vaclav Klaus on the Czech Republic, Lajos Bokros on Hungary, Ivan Miklos on Slovakia, and Mart Laar on Estonia.
On October 2, 2013 it was announced that the board of directors of private Moscow-based university New Economic School (NES) also known as the Russian Economic School had approved Simeon Djankov as its rector. The New Economic School has Russia's premier economics graduate program, which had produced over 350 PhD economists since 1993. It is privately funded, and was established by Harvard economics professors Zvi Griliches and Nobel Prize winner Eric Maskin. During the tenure of Dr Djankov as Rector, the New Economic School was relocated to a new campus in the Skolkovo Innovation Center.
The Financial Markets Group was founded by Charles Goodhart and Mervyn King in 1986 to study the development of banking and non-bank financial institutions. Dr Djankov's appointment as director serves to expand the focus of research to emerging markets. His latest research is on the effects of Brexit on the City of London, as presented in "EU Attitudes towards Brexit" and written up in "The City of London after Brexit". His views on Brexit are that a soft exit of Great Britain from the European Union will be in the interest of all Europeans. The point of these statistics is to state the obvious: politicians in the UK and the rest of the EU should be constructive about Brexit. If financial service companies move out of London, it is unlikely that many would relocate to another EU city. Financial centers outside of the EU would be more likely to attract the business because other EU financial centers rank so much lower.
Dr Djankov argues that London will not lose its crown as Europe's financial capital. There are three reasons for this continued dominance over European financial services: The pre-eminence of the British court system in upholding the rule of law, including the protection of creditor and shareholder rights; The superiority of the UK's university education in economics and finance over its continental counterparts ; and the UK's tax and employment regulation that is conducive to the industry's health and profits. Still, Brexit's Effect on the City will be noticeable, reducing revenues by 12-18% and employment by 7-8%. Dr Djankov has proposed a Brexit readiness index to gauge progress towards eventual separation from the European Union. The Brexit Readiness Score is updated quarterly.
In June 2008, Djankov established the think-tank Ideas42, jointly with Antoinette Schoar (MIT Sloan), Eldar Shafir (Princeton) and Sendhil Mullainathan (Harvard), a Harvard University-International Finance Corporation venture. The think tank applies the latest analysis to studying the economic lives of the poor, the development of small businesses, and access to finance. Several projects are co-sponsored with the Gates Foundation and the Institute for Financial Management and Research in India. A December 2007 paper studies corruption in obtaining driving licenses in Delhi. On the average, individuals pay about twice the official amount to obtain a license and very few take the legally required driving test, resulting in many unqualified but licensed drivers. The magnitude of distortions in the allocation of licenses increases with citizens' willing to pay for licenses. The results support the view that corruption does not only transfer from citizens to bureaucrats but also distorts allocation. The paper also shows that partial anti-corruption measures have only a limited impact because players in this system adapt to the new environment. Specifically, a ban on agents at one regional transport office is associated with a high percentage of unqualified drivers overcoming the residency requirement and obtaining licenses at other license offices.
Dr Djankov joined the Peterson Institute for International Economics in 2013 and has written extensively on Brexit, Russia, Viktor Orbán, postcommunist economies, public procurement, and economic growth. His book on Inside the Euro Crisis details his days in office. Dr Djankov's views on whether Brexit Will Hurt the City of London have been extensively covered in the media. He also edited a book on China's New Silk Road Initiative. In 2017, Dr Djankov wrote a study on Trump's Corporate Tax Cut Proposal that casts doubt on the likelihood of such reform. Another study looks at The United States Unique Tax Structure.Greece's Eurozone woes have also been the subject of various editorials and media events.
Simeon Djankov has had a long and distinguished career at the World Bank, starting in 1995. He has worked in over 100 countries, including Afghanistan, Azerbaijan, Brazil, Colombia, Egypt, Georgia, Kazakhstan, the Kyrgyz Republic, Macedonia, Moldova, Paraguay, Slovakia, Slovenia and Yemen.
In 1997, Simeon Djankov participated in a World Bank enterprise restructuring project in Georgia. For the next year, the project surveyed most of the manufacturing enterprises in Georgia, identifying those with good export opportunities. Since 2004, after the Rose Revolution, Simeon Djankov has visited Georgia frequently and worked with the government on reforming the business environment. Zurab Nogaideli, prime minister between 2005 and 2007, won a Reformer of the Year award in 2007. Djankov worked closely with Kakha Bendukidze, the main architect of Georgia's economic reforms.
Simeon Djankov is the creator of the annual Doing Business report, the top-selling publication of the World Bank Group. The report came out of joint research work with Professor Andrei Shleifer at Harvard University, and was inspired by Djankov's experience in overly-regulated socialist economies. The Regulation of Entry paper is one of the most-cited papers in all of economics, with 913 references in academic journals and 3,400 citations in working papers and official reports. Since its initial publication in November 2003, Doing Business has generated 9,750,000 media citations, and over 7 million copies sold or downloaded. The Doing Business report recently had its 17th annual book published. In a 2016 article for the Journal of Economic Perspectives Dr Djankov explains how Doing Business started. An example of his empirical research supporting the Doing Business project is a paper on business regulation and poverty, published in Economics Letters.
A November 2017 EconTalk explains the origins and influence of the Doing Business report. A summary of reforms during the 15-year anniversary lists the main achievements. The methodology in the Doing Business report has been used by teams managed by Simeon Djankov to develop other World Bank indices, for example the Human Capital Index.
As Chief Economist, Dr Djankov initiated the work on subnational Doing Business analyses, gave the start of Women, Business and the Law series, and managed the Enterprise Surveys.
Together with Amanda Ellis, Dr Djankov established the Women, Business and the Law series in 2008, which published its sixth edition in January 2020. His research on gendered laws shows that equal opportunity laws increase labor force participation by women.
In 2018, Dr Djankov ran the World Development Report 2019, which became the most downloaded World Bank publication within a week of its launch. The study is the first World Bank product downloaded more than 1.5 million times, in six languages.
On July 27, 2009, Simeon Djankov became Minister of Finance of Bulgaria. Minister Djankov reduced budget spending and managed to cut the budget deficit for 2009 to 4.4%. In 2010 it met the Maastricht criteria - 3%, falling to 2% in 2011 and 0.45% in 2012. On December 1, 2009, Standard&Poors upgraded Bulgaria's investment outlook from "negative" to "stable," the only country in the European Union to receive an upgrade that year. In January 2010 Moody's followed with an upgrade of its rating perspective from "stable" to "positive," and a year later upgraded it one notch - Bulgaria being the only European Union member with an upgrade during 2008-2012.
On numerous occasions, Minister Djankov stated that two successive terms are needed to complete the reforms that would lead Bulgaria from poorest to middle-income country by Central European standards. Soon after, Parliament adopted the so-called Golden Rules in the organic budget law: the government cannot surpass a deficit of 2% of GDP and a debt-to-GDP ratio of 40% in any given year. While Djankov a member of the GERB cabinet, Simeon Djankov was not a party member.
At the second GERB party congress Djankov urged delegates to lead such policies that the party wins a second term with full majority in parliament. This is needed, he said, to complete the reforms that would lead Bulgaria from poorest to middle-income country by Central European standards. Soon after, Parliament adopted the so-called Golden Rules in the organic budget law: the government cannot surpass a deficit of 2% of GDP and a debt-to-GDP ratio of 40% in any given year. Djankov believes in his role as an expert rather than a politician and even though he is a member of the GERB cabinet, he is not a member of the GERB party.
Djankov was the second-youngest finance minister in the European Union, after the UK's George Osborne. He champions low taxes as a way to come out of the global economic crisis. In May 2012, he became Chair of the Supervisory Board of the European Bank for Reconstruction and Development (EBRD). This is the first time the Chair is held by a finance minister from the former socialist bloc. In June 2012 Simeon Djankov has been invited to join the World Bank Knowledge Advisory Council.
Djankov championed low taxes as a way to come out of the global economic crisis. In May 2012, he became Chair of the Supervisory Board of the EBRD. This is the first time the Chair is held by a finance minister from the former socialist bloc. In June 2012 Simeon Djankov has been invited to join the World Bank Knowledge Advisory Council.
On February 18, 2013 Djankov resigned in protest of the decision by Prime Minister Boyko Borisov to advance subsidies to farmers. On February 20, 2013, PM Borisov announced the resignation of the government due to increasing levels of violence in the protests due to high electricity prices. Djankov continued to serve as finance minister until a caretaker government was formed a month later.
As Deputy Prime Minister, Dr Djankov was responsible for the reforms in the public administration, healthcare, higher education, and pensions.
In July 2010, the results of the first year of administrative reform were reported. The number of public officials was reduced by 11%, and the number of government institutions by 8%. This is the first time since the fall of communism that administrative reform has resulted in an actual optimization in government. In 2012 since the beginning of his term the number of public officials was reduced by 15%, and the number of government institutions by 9%. Also, the new Law on Public Officials (adopted by Parliament in April 2012) introduced a unified pay scale for all public servants, annulled 72 special laws that previously gave special treatment to some categories of public servants, and eliminated the annual bonus for seniority. Under the new law pay depends fully on merit. The latter change met stiff opposition by the labor unions who have repeatedly called for Dr Djankov's resignation. In 2012, another part of the administrative reform started: moving some government agencies from the capital city to other regional hubs. The first two government decrees moved the headquarters of the tourism directorates to Plovdiv, and the Agency for Fisheries to Burgas. The rationale for this decentralization is to spread the administrative capacity in Bulgaria more evenly, and to link university education with the needs of the administration.
Simeon Djankov's main body of work is on post-communist transition. His 2014 book The Great Rebirth analyzes the experience of Eastern Europe and Russia in the quarter century since the fall of communism. Djankov is put alongside Leszek Balcerowicz, Vaclav Klaus and Mart Laar as one of the architects of post-communist economic restructuring.
Djankov's views on the Eurozone crisis are presented in a number of publications, and summarized in a recent article. He also published a book on the subject titled Inside the Euro Crisis. The main argument is that Europe needs a frank discussion about competitiveness.
A third book, Europe's Growth Challenge, suggests ways in which the continent can compete with the United States and Asia. European society benefits from equality in income, excellent healthcare and basic education, good infrastructure, and developed institutions for the rule of law. But Europe has entered a period of economic stagnation and is distracted by multiple challenges. Economic and political strains have stalled vital reforms, while the threat of disunion is evident. By focusing on what works in Europe and the great variations within Europe, Djankov shows how Europe can develop a strategy for higher economic growth. These steps a reduction of the fiscal role of the state, an opening up of services and digital trade, an easing of the regulatory and tax burdens on labor, an improved environment for startups and innovation, pension reform, and the development of Europe's energy union. Europe's Growth Challenge is finalist for The Hayek Prize for 2018.
His attitude and wording concerning Russia has become famous for his firmness. On September 27, 2012 he stated that if needed Russian nuclear-power companies would be slammed in the talks about future possible building of nuclear plant at Belene if their conditions were not satisfactory for Bulgaria. As deputy prime minister, Simeon Djankov was also responsible for canceling the oil-pipeline project connecting the ports of Burgas and Alexandroupolis. At the same time, as minister Djankov was supportive of easing Russian tourism into Bulgaria and increasing cultural ties. For example, on January 23, 2013, during a visit to Moscow he stated that in fact "Bulgaria bets on Russian investment". The visa regime was in fact eased after Djankov's intervention, so that Russian tourists who already have Schengen visas were no longer required to obtain Bulgarian visas. The same new rule applies for citizens of Turkey and Ukraine.
Corporate income tax rates in advanced economies have fallen from an average of 46 percent in 1987 to 23 percent in 2017. Professor Djankov's research suggests that tax convergence will take place by 2020, with the United States, France and Germany also lowering their tax rate to below 25 percent. This trend reduces tax competition across jurisdictions.
The study conducted by Dr Djankov World Development Report 2019 finds that the fears of mass unemployment due to technology are unfounded.
Djankov has a passion for antique and old historic and finance books, history of Bulgarian finance, etc.
While in the Bulgarian government, Dr Djankov started an ambitious program for restoring cultural heritage sites from the Thracian, Roman and early Bulgarian history. Together with Bozhidar Dimitrov, director of the National Historical Museum (Bulgaria), the state invested in over 80 archaeological sites. Simeon Djankov was called once "Bulgaria's Top Archaeologist" by a fellow minister. In 2012, he received the title of Honorary Citizen of Sozopol.
Djankov is married to the Columbia University economist Caroline Freund, and has two children. In 2016 Dr. Freund published Rich People, Poor Countries, a widely acclaimed book on superstar global companies.
His father-in-law is the theoretical physicist Peter Freund of the University of Chicago. Freund was one of the originators of two-component duality which gave the original impetus to what then developed into string theory. He pioneered the modern unification of physics through the introduction of extra dimensions of space and found mechanisms by which the extra dimensions curl up. Professor Freund made significant contributions, to the theory of magnetic monopoles, to supersymmetry and supergravity, to number-theoretic aspects of string theory, as well as to the phenomenology of hadrons.