This article critically analyses how the institutional environment influences the development of entrepreneurship in Bulgaria. Drawing on in-depth interviews with Bulgarian entrepreneurs an ‘institutional asymmetry’ between formal and informal institutions is identified which hampers the development of economically and socially productive entrepreneurship. Despite reforms to formal institutions in Bulgaria, the asymmetry persists as a result of informal institutions which serve to hamper entrepreneurship. In order to reduce this asymmetry, there is a need to develop and align formal and informal institutions, while recognising that such institutional reforms are, by their nature, long-term and may potentially be undermined by entrepreneurs engaging in informal and corrupt activities.
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