Schizophrenic Public Administration Reform in Hungary. Tension between anti-NPM systemic and pro-NPM organizational reforms

The aim of this paper is to shed the light on the relationship between New Public Management and Hungary’s Zoltán Magyary Public Administration Development Programme. As will be shown, the Magyary Programme has a dual structure. The systemic reforms run counter to the NPM philosophy because the main goal is the centralization of public administration, while NPM clearly advocates decentralization. At the same time, reform proposals on the organizational level conform to NPM. The inconsistencies in the Magyary Programme itself and the probable political and organizational resistance towards its proposals could delay the introduction of reforms on the organizational level.

Schizophrenic public administration reform in Hungary. Tension between anti-NPM systemic and pro-NPM organizational reforms

The aim of the paper is to highlight the main characteristics of the recent Hungarian public administration reform, as well as to reveal the inconsistent nature of some of its elements and to describe the connected risks. The starting point of the article is the Magyary Zoltán public administration development programme. The reform steps are compared to the ideal type NPM approach. The Hungarian public administration reform can be characterized by strong centralization and the revitalization of Hungarian anti-liberal traditions at macro level, and by the support of the enhancement of market rules and management at micro level.

Introduction of soft budget constraint as an analyzing tool into public management. The case of the Hungarian public administration reform

Public management reforms are usually underpinned by arguments that they will make the public administration system more effective and efficient. In practice, however, it is very hard to determine whether a given reform will improve the efficiency and effectiveness of the public administration system in the long run. Here, I shall examine how the concept of the soft budget constraint (SBC) introduced by János Kornai (Kornai 1979, 1986; Kornai, Maskin & Roland 2003) can be applied to this problem. In the following, I shall describe the Hungarian public administration reforms implemented by the Orbán government from 2010 onward and analyze its reforms, focusing on which measures harden and which ones soften the budget constraint of the actors of the Hungarian public administration system. In the literature of economics, there is some evidence-based knowledge on how to harden/soften the budget constraint, which improves/reduces the effectiveness and hence the efficiency of the given system. By using the concept of SBC, I also hope to shed some light on the rationale behind the Hungarian government’s introduction of such a contradictory reform package. Previously, the concept of SBC was utilized narrowly in public management studies, mostly in the field of fiscal federalism. My goal is to apply the concept to a broader area of public management studies. My conclusion is that the concept of SBC can significantly contribute to public management studies by deepening our knowledge on the reasons behind the success and failure of public administration reforms.

Market reform and state paternalism in Hungary: a path-dependent approach

Hungary is one of the worst-hit countries of the current financial crisis in Central and Eastern Europe. The deteriorating economic performance of the country is, however, not a recent phenomenon. A relatively high ratio of redistribution, a high and persistent public deficit and accelerated indebtedness characterised the country not just in the last couple of years but also well before the transformation, which also continued in the postsocialist years. The gradualist success of the country – which dates back to at least 1968 – in the field of liberalisation, marketisation and privatisation was accompanied by a constant overspending in the general government. The paper attempts to explore the reasons behind policymakers’ impotence to reform public finances. By providing a path-dependent explanation, it argues that both communist and postcommunist governments used the general budget as a buffer to compensate losers of economic reforms, especially microeconomic restructuring. The ever-widening circle of net benefiters of welfare provisions paid from the general budget, however, has made it simply unrealistic to implement sizeable fiscal adjustment, putting the country onto a deteriorating path of economic development.

Market reform and fiscal laxity in Communist and post-Communist Hungary: A path-dependent approach

Purpose – The purpose of this paper is to present a conceptual framework in order to analyse and understand the twin developments of successful microeconomic reform on the one hand and failed macroeconomic stabilisation attempts on the other hand in Hungary. The case study also attempts to explore the reasons why Hungarian policymakers were willing to initiate reforms in the micro sphere, but were reluctant to initiate major changes in public finances both before and after the regime change of 1989/1990. Design/methodology/approach – The paper applies a path-dependent approach by carefully analysing Hungary's Communist and post-Communist economic development. The study restricts itself to a positive analysis but normative statements can also be drawn accordingly. Findings – The study demonstrates that the recent deteriorating economic performance of Hungary is not a recent phenomenon. By providing a path-dependent explanation, it argues that both Communist and post-Communist governments used the general budget as a buffer to compensate the losers of economic reforms, especially microeconomic restructuring. The gradualist success of the country – which dates back to at least 1968 – in the field of liberalisation, marketisation and privatisation was accompanied by a constant overspending in the general government. Practical implications – Hungary has been one of the worst-hit countries of the 2008/2009 financial crisis, not just in Central and Eastern Europe but in the whole world. The capacity and opportunity for strengthening international investors' confidence is, however, not without doubts. The current deterioration is deeply rooted in failed past macroeconomic management. The dissolution of fiscal laxity and state paternalism in a broader context requires, therefore, an all-encompassing reform of the general government, which may trigger serious challenges to the political regime as well. Originality/value – The study aims to show that a relatively high ratio of redistribution, a high and persistent public deficit and an accelerated indebtedness are not recent phenomena in Hungary. In fact, these trends characterised the country well before the transformation of 1989/1990, and have continued in the post-socialist years, too. To explain such a phenomenon, the study argues that in the last couple of decades the hardening of the budget constraint of firms have come at the cost of maintaining the soft budget constraint of the state.

Kormányzati koordináció Magyarországon. Esettanulmány az egyablakos ügyfélszolgálati reformról (Governmental coordination in Hungary: Case study on the one-stopgovernment service reform)

A tanulmány a központi kormányzat koordinációs politikájának jellemző mintázatait vizsgálja. A vizsgálat fókuszában a magyar kormányzati szférában újonnan bevezetett koordinációs eszköz, a kormányablak, mint egyablakos ügyfélszolgálati modell tanulmányozása áll. A kutatás empirikus bázisát a kormányzati és közigazgatási kulcsszereplőkkel készített kvalitatív interjúkból és a dokumentumelemzésből származó adatok analitikus vizsgálata adja. A szerző a tanulmányban szemügyre veszi a kormányzati koordináció gyakorlatát Magyarországon, elemzi, hogy ez mennyire tér el más országokétól. ____ The paper examines, on the basis of qualitative interviews and documentary analysis, the emerging patterns of government policy coordination in Hungary. The focus of the paper is on a recent case of innovative policy coordination measure introduced by the Hungarian government: the newly established “Government Windows”, the one-stop-government initiative. The paper investigates such questions as what the main characteristics of the coordination traditions in Hungary are, what are the specific structural features of the newly established governmental coordination instruments, and how do they differ from of other countries’ similar experiences.

Content and drivers of performance management in agency-type organizations of the hungarian public administration

The improving performance of public administration and the reform of public financing system have been on agenda in Hungary for many years, in accordance with the international trends. However, governments have not expected and supported creating of a performance-oriented public administration in a comprehensive and explicit way. Nevertheless, there are bottom-up initiatives at organizational level, which target performance-oriented organizational function. The research focuses on organizations of central public administration where the successful application of performance management methods is most likely based on the international literature. These are the so called agency-type organizations, which are in Hungary called autonomous state-administration organizations independent of the Government (e.g. Hungarian Competition Authority), government bureaus (e.g. Hungarian Central Statistical Office), and central offices subordinated to the government (either the cabinet or a ministry) (e.g. Hungarian Meteorological Service). The studied agencies are legally independent organizations with managerial autonomy based on public law. The purpose of this study is to get an overview on organizational level performance management tools applied by Hungarian agencies, and to reveal the reasons and drivers of the application of these tools. The empirical research is based on a mixed methods approach which combines both quantitative methods and qualitative procedures. The first – quantitative – phase of the author’s research was content analysis of homepages of the studied organizations. As a results she got information about all agencies and their practice related to some performance management tools. The second – qualitative – phase was based on semi-structured face-to-face interviews with some senior managers of agencies. The author selected the interviewees based on the results of the first phase, the relatively strong performance orientation was an important selection criteria.