I think a country like Hungary is an outlier.

Look at the results at youth levels for your U19 and U21. Bulgaria were very competitive in the 60’s,70’s and 80’s. Then you started tapering off and now your youth team results are lacklustre.

Regarding the drop in talent in Bulgaria: IMO demograpics has a lot to do with the rise and fall of a countries football fortunes. Bulgaria’s fertility rate is super low and has been trending down for decades. So less children means less youth players to choose from, less talent available at pro level.