Fiscal Policy in Hungary Under Transition (Vol. I, Vol. II)

Abstract

Transformation of the centrally planned economy to a market based system in Hungary has been a more gradual process than in other transitory economies, although 1990 - when the new democratic government was elected - is considered as an 'official' starting point of the transition period. Since 1968 Hungary experienced a quite long period of reforms. Between 1968 and 1988 due to these reforms (aiming at the establishment of a market based socialist system) the state-owned enterprises became virtually free in decision making concerning production, investment, marketing and also finance and the State's decisions concerned mainly on nationally important projects and on the formation of market conditions. This paper explores the Hungarian transition focusing, in its first part, on macroeconomic development, ownership structure, and financial sector, and, in its second part, on budgetary organization, fiscal development, and public debt.