The Compound Effect of Decisions
The Compound Effect of Decisions: When a Country Runs on Short-Term Mode
Public protests don’t start on a Monday. They start years earlier – in every “we’ll fix it later” decision that never got fixed.
In Bulgaria, the tension around the 2026 budget and euro adoption is just the latest symptom. Tens of thousands of people have been on the streets in Sofia, angry about tax hikes, social contributions, and a feeling that the system once again asks more from citizens while delivering too little in return. Reuters+2Reuters+2
But this isn’t only about a single budget. It’s about compound decisions over decades.
What Is a Compound Decision?
Think of compound interest in finance:
Small gains, repeated over time, become huge.
Small losses, ignored for long enough, quietly destroy value.
Governance works the same way.
A decision made today doesn’t just live in the present. It creates incentives, expectations, and habits. Those shape the next decision… and the next… and the next.
Over 5–10 years, you don’t just have individual acts. You have a trajectory.
Bulgaria as a Case Study: How Decisions Compound
Bulgaria is not a failed state. But it is a clear example of what happens when a country runs on short-term trade-offs and weak systems for too long.
A few data points:
In Transparency International’s Corruption Perceptions Index 2024, Bulgaria scores 43/100 and ranks 76th in the world – among the worst in the EU, just above Hungary. Transparency.org+2БНР+2
Reports describe “façade efforts” and legislative changes that favour kleptocratic elites rather than genuinely strengthening institutions. Transparency
Since 2020, the country has gone through repeated elections and unstable coalitions, driven largely by public anger over corruption and captured institutions. csis.org+2theloop.ecpr.eu+2
That’s the macro picture. What’s behind it?
1. Small Tolerances That Became Normal
“Just this one procurement will be done informally.”
“Just this one appointment will be political, not professional.”
“Just this reform can wait until after the election.”
Each small exception seems harmless. But repeated over years, they compound into a culture where rules are flexible for the well-connected.
2. Reforms on Paper, Not in Practice
Under pressure (EU, protests, media), reforms are often announced – new commissions, strategies, laws. But when enforcement is weak, or when key people are never touched, reforms become cosmetic.
Over time, citizens learn a painful lesson:
“Things change in words, not in reality.”
That’s a compound effect too: it erodes trust, which makes future reforms harder because nobody believes them anymore. Transparency+1
3. Short-Term Political Survival vs. Long-Term Institutional Health
Frequent elections and fragile coalitions incentivize survival politics:
Buy time.
Avoid deep structural fights.
Make budget decisions that keep things quiet until the next vote.
The protests around the 2026 budget – tax hikes, higher contributions, rising debt, fear of eurozone inflation – sit on top of years where people already felt that the state doesn’t spend in their interest. Reuters+2AP News+2
The budget is not just a spreadsheet. It is a trust test, and trust has been compounding in the wrong direction.
The Real Problem: No Clear Operating System
Underneath corruption, protests, and budgets sits a simple issue:
There is no clear, trusted system for how decisions are made, implemented, and corrected.
If you looked at the country like a company, you’d say:
Roles and accountability are blurry.
Processes for checking abuse are weak or politicized.
Feedback loops from citizens to policy are slow or ignored.
Strategy keeps changing with every government cycle.
The result is not just “bad outcomes.” It’s unpredictable outcomes.
And unpredictability is what makes people angry, scared, or numb.
What Compound Good Decisions Could Look Like
It’s important not to stop at criticism. The same way bad decisions compound, good ones can too.
Imagine a different sequence, over 5–10 years:
Transparent Rules for Public Money All major public contracts published and searchable; clear conflict-of-interest checks; easy citizen and media oversight.
Real Independence Where It Matters Regulators, anti-corruption bodies, and courts structurally insulated from political appointments and business interests.
Consistent, Not Just Convenient, Enforcement The first few high-level cases handled cleanly and transparently – not as political theatre, but as a signal that rules finally apply upward, not only downward.
Stable, Cross-Party Agreements on Key Long-Term Goals Euro adoption, tax structure, judicial reform, education, and healthcare strategy agreed as 10-year frameworks, not 1-year bargaining chips.
Each of these alone would not “fix” Bulgaria. But together, repeated and protected over time, they would start to compound trust:
Businesses invest more because rules feel predictable.
Talented people are less likely to leave.
Citizens are less reactive and more cooperative.
International partners treat the country as reliable, not just cheap.
That’s the positive snowball.
Using Bulgaria as a Mirror, Not Just a Warning
Bulgaria is not unique. Many countries – even wealthy ones – face versions of the same problem:
short-term politics, opaque decision-making, weak enforcement, and citizens who no longer believe that “the system works.”
What makes Bulgaria a powerful case study is that the gap is very visible:
EU member, but EU-low scores on corruption. Transparency.org+1
Formal democratic institutions, but repeated protests and turbulence. theloop.ecpr.eu+1
Ambitious goals like euro adoption and record spending, but low trust in how those decisions are made. Reuters+2Reuters+2
So the lesson is not “Bulgaria is broken.” The lesson is:
If you don’t design a clear system, you don’t control where your country compounds.
It will still compound – just in the wrong direction.
Final Thought: Compounding Is Inevitable. Direction Isn’t.
Every country, like every company, runs on compound decisions.
The question isn’t whether decisions compound. The question is what they compound into:
years of tolerated exceptions, soft enforcement, and cosmetic reforms → protests, mistrust, and brain drain
or years of consistent rules, boring but honest processes, and transparent trade-offs → trust, stability, and the space to grow
Bulgaria right now is a live example of the first path. It can still become an example of the second.
But that requires something deeper than changing governments: it requires changing how decisions are made, checked, and repeated over time.
That is where the real power – and responsibility – of leadership lives.
