Transcript Democratic and Economic Development in Hungary

Democratic and Economic
Development in Hungary
brad hatch
History
• Democratic development should not separated from its
historical context
• Following the 1956 October crisis, Hungary entered in a
period of mild or moderate communism
• determined to avoid the extremes of his predecessors
Kadar remained a moderate by crafting a pragmatic policy
of social recognition
– supported neither radical democratization nor
reactionary Stalinism (middle of the road socialism)
– stated that “he who is not against us is with us”
contrasts with other EE countries
Hist. cont. (63-89)
• Hoped that the party would act as its own opposition party
• some competition was permitted within the party
• entered into a ‘dual compromise’ with workers and
intellectuals
• for intellectuals Kadar abandoned pol credentials as a
means of vetting appointments to leadership positions
• opposition parties permitted to mobilize in late 80’s
• All important indicators of compromise and democratic
leanings, which should have made the transition to
democracy less abrupt.
The Road to Democracy
• Increased popular interest for demo in late 1980’s
• transition into market economy and democracy occurred
gradually but systemically in late 80’s to mid 90’s
– 89 National Assembly approved major const. changes
– multi-party elections scheduled for 1989, but initially were sharp
limits on party proliferation
– Jan 1990 freedom of conscience law passed
– first communist county in EE to implement demo reforms
• first free vote was presidential referendum
Elections
• Stability in governments is a significant characteristic of Hungarian
democracy
• Since end of Communism held three parliamentary elections, (1990,
94, 98) , contrast with 7 in Poland
• 1990 election brought end to Communist rule in Hungary, victory went
to the center-right Democratic Forum, winning more than 50% of
seats. (moderates who called called for careful transition from
socialism into free market economy)
• Due to poor economic performance during that time (90-94), (such as
the lack of privatization) Hungarians turned back to Communist party,
now calling themselves Socialists
• because of mixed electoral system they won 54% of seats in parl. with
39.92% of votes. Demo Forum only got 10% of the votes cast.
Economic reforms
• The new PM, Horn(94-98), emphasized economic
reforms, characterized by more foreign investment,
savings, and closer links to the Western Europe
• concentrated on creating a legal infrastructure to support
private enterprise
• 1995 finally passed privatization legislation, selling gov’t
owned companies and state utilities.
• In this respect, the party was pragmatic not ideologically
bound
• Since then economy performed very well, making a
successful transition from a command economy to a free
market system
Economic transition
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Hungary has cultivated a business friendly environment, perhaps most friendly
in the former Soviet eastern Bloc.
Foreign investment has been the engine of the economy
more U.S. investment than any other country in the region, as in the last 10a
has attracted $22 billion in American investment
1999 more than $550 million foreign investments attracted into Hungary,
creating 9, 000 new jobs
WHY?
– While other post-Soviet satellites worried about foreign investment
infringing upon their sovereignty, it was regard by the elite's as party of a
larger strategy of economic development
– Attractive investment laws, and cheep labor, but has 8-10% UI
IPE
• Recent est. of stock market as another way to invest in Hungary's
economy
• Working toward EU membership
• Close eco. ties with Western Europe, 75% of foreign exports go to the
EU
• 4-5% annual growth rate since 1995
• yet, sill have much lower wages than other EU countries,
• Income gap- economic development has benefited new class of
entrepreneurs and businesspeople more than other segments of the
population.
1998 election
• Despite eco successes the Socialists lost the 1998 general election
• it underestimated the recent scandals which had marred the governing.
period
• Also, electoral system distortion contributed to their decline,
• 1994- 32.99% of the votes = 54% of the seats (absolute majority)
• 1998- 32.92% of the votes= 35% of the seats (second place)
• League of Young Democrats (campaigning on crime and corruption)
only obtained 29.5% of the popular vote, yet got 38% of the seats,
enough to secure first place.
• Despite having 3 different governing parties/coalitions following their
first 3 free elections, the party system itself has been relatively stable
– in contrast with other EE countries most of the parties in Parl now, were
there already in 1990
– less effective parties (approx.4) than average of 7.7 in other EE countries
Democracy approximates a compromisecorporatist model of consolidation (Seleny)
• Characterized by;
• (1) low levels of political mobilization
– Indicated by the deferential political culture; citizens
are quite willing to permit the elite manage the affairs
of the country (Political quiescence of Hungarian
society)
– very few strikes and demonstrations, for example in
1993 they only had 17 compared to 7362 in Poland
– (even when held, they are generally resolved through
compromise)
Compromise-corporatist model
(cont.)
• (2)high levels of elite consensus and bargaining
– neo corporatist tendencies; economic and social policies are
developed through consultation bet. Parties, gov’t, and National
Council of Trade Unions.
– Also, preference for compromise helps explain Hungarian courts
prominent position in the pol system
– 1994-1998 Socialist party had enough seats for an absolute
majority but still formed a coalition with the Alliance of Free
Democrats
• (3) generally economist or pragmatic pol discourse
– pols has been dominated by economic matters; gov’t, as
demonstrated, took pragmatic actions during the transitional
period.
Future
• Consensus politics and elite negotiation (in combination
with governmental and party stability) are indicators that
seem to bode well for long term democratic consolidation
and success
• Perhaps the major challenge to this democratic model is
that the citizenry take little interest in politics. Hungarians
are not an engaged citizenry, indicated by 57% turnout
during the 1998 elections.
• Nevertheless, Hungary has made significant progress in
developing into functional democracy over the last 10
years.