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.

Az elektronikus kereskedelem alkalmazása a hazai vállalatok körében - a piacorientáció és a marketingkörnyezet szerepe (E-commerce practises of the Hungarian companies – Role of market orientation and marketing environment)

A szerzők tanulmányának célja, hogy bemutassa, milyen célokra alkalmazzák az internetet a hazai vállalatok, milyen várakozásaik vannak az e-kereskedelem versenyben betöltött szerepével kapcsolatban, és hogyan észlelik annak előnyeit. Vizsgálják azt is, hogy az elmúlt öt évben milyen változások tapasztalhatók a vállalatok gyakorlatában e téren. Elemzik továbbá, hogy a piacorientáció és a vállalat külső marketingkörnyezete hogyan befolyásolja az e-kereskedelem megítélését és alkalmazását. Elemzésük a "Versenyben a világgal" kutatási program 2009-ben készült felmérésének eredményeire támaszkodik, amelyben 300 vállalat szakembereit kérdezték meg. Kutatásukban megerősítést nyert, hogy Magyarországon az elektronikus kereskedelem jelentősége nő. A vállalatoknak kedvezőek az elektronikus kereskedelem jövőjével kapcsolatos várakozásaik, és úgy vélik, hogy ez versenyelőny forrása lehet. A vállalat piacorientációja erőteljesen befolyásolja azt, hogy egy vállalat milyen mértékben alkalmazza az internetet, és hogyan viszonyul az elektronikus kereskedelemhez / === / The objective of the authors’ research is to show how internet is used among Hungarian companies, to analyse their expectations with regard of the role e-commerce plays in competition, and the benefits resulting from e-commerce. They also focus on the changes that have taken place the past five years in the practice of Hungarian companies. The authors investigate how market orientation and the external marketing environment of firms influence evaluations of e-commerce and its implementation. Their analysis is based on the results of the research program „Competing with the world” , which includes the answers of 300 companies. Their research results confirm that the importance of e-commerce is growing in Hungary and overall Hungarian firms have positive expectations with regard of the future of e-commerce and consider it a source of competitive advantage. Market orientation of the firm strongly influences the extent of internet applications and attitudes toward ecommerce.

A hatalmi viszonyok a világgazdaság és a katonai szektor a XXI. században = Power relations in the world economy and the military sector in 21st century

A bipoláris világrendszer megszűnése a XX. század utolsó évtizedében új helyzetet teremtett a globális politikai és gazdasági viszonyokban, ugyanakkor nem mellékesen a hadiiparban is. A szerző, szem előtt tartva a hatalmi viszonyok jövőbeli elkerülhetetlen átrendeződését, elsősorban a katonai szektor előtt álló, a XXI. századra előrevetíthető kihívásokat, lehetőségeket, a szektor jövőbeli pályáját tekinti át. A hadiiparral kapcsolatban indokolt a hidegháború utáni világ fegyverkezési helyzetének, fegyveres erőinek számbavétele csakúgy, mint a releváns elméleti keretek ismertetése, továbbá a fontos globális szereplők biztonságpolitikájának vizsgálata. A katonai szektor jelenének és jövőjének alapos elemzése nem nélkülözheti a katonai kiadások jelenlegi – a világgazdasági válság által befolyásolt – és a következő évtizedekben várható alakulásának vizsgálatát. Végül, de nem utolsó sorban a szerző áttekinti a XXI. századi haditechnikai forradalom már most látható és a jövőben valószínűsíthető vívmányait, a fontosabb haditechnikai tendenciákat, illetve elemzi a nemzetközi fegyverpiac helyzetét. __________________ The end of the Cold War led to a new situation in global political and economic affairs, as well as in the military sector. The author, taking into consideration the inevitable future power shifts, provides an overview of the challenges, possibilities and future paths of the military sector. Relevant issues include assessing the arms and armed forces of the post-Cold War era, as well as the analysis of theoretical frameworks and the security policies of the important global actors. Understanding the present and the future of the military sector is not possible without the thorough analysis of military expenditures and their likely future trends. The author also overviews the outcomes of the 21st century revolution in military technology and analyses the global arms market.

Happiness, environmental protection and market economy

The manufacturing sector is leaving the West for Asia’s low wages and good working culture. Europe would be better off keeping these manufacturing activities, slowing down wage inflation and what is more, letting a young, cheaper workforce from the East settle down within their borders. This would aid in preserving the diverse economic structure which has been characteristic for Europe.Beside the economic growth there are two more concepts which have turned into the “holy cows” of economics during the last fifty years. One is the need to constantly improve labor productivity and the other is increasing competitiveness of nations. The high labor productivity of some countries, induces severe unemployment in the globalized world. In the other hand it is high time we understood that it is not competition, but cooperation that brings more happiness to humanity.Should we still opt for “happiness” and “sanity”, it is quite obvious that we all should, in economists’ terms, define our individual welfare functions corresponding to our own set of values, staying free from the influence of media, advertisements and fashion. The cornerstone to all this is the intelligent citizen who prefers local goods and services.

Climate change impacts on migration and labour market

Floods, droughts and monsoons have always disturbed human settlements, but there are more settlements now and more people in the world. Therefore, if a natural disaster happens, more will suffer than ever before. Moreover, climate in the past several decades has been greatly degraded by anthropogenic activity. In some cases, the chain of causality of human influence on the climate is direct and unambiguous (e.g. the effects of irrigation on local humidity), though there are instances where it is less clear. Presently, the scientific consensus (IPCC, 2007) on climate change is that human activity is very likely the cause for the rapid increase of global average temperatures, more generally known as global warming.