Hesitating steps towards self-government in Hungary

Abstract

Since 1978 there have been new changes to be observed in the economic and institutional spheres of Hungary. The politically motivated control over the 'golden age' between the years 1968-74, also called 'the Hungarian miracle', brought the Hungarian economy into a situation that resulted in the all but complete failure of 'manual control' practised in that period. The country's leadership had to realize that a return to the principles of 1968 was called for, or more, a revision of those principles, for even a consistent implementation of them would have proved insufficient for the settlement of economic and social problems emerging simultaneously. Thus, after an interval of 10 years, the tactics of'small steps' have been adopted again. This supposition is supported by the following factors: (1) Since 1979 there has been a strong decentralization in the Hungarian economy. (2) Dating from that time, the Hungarian private sector has been treated dissimilarly to the East-European pattern. (3) Between the years 1985-86, the majority of business establishments had to change over from state guidance to a special Hungarian version of self-management. (4) Since I January 1987, the previously one-level banking system has been transferred into two-level. (5) Between 1988 89, value-added and income assessment taxations are likely to be introduced. In my brief study I wish to discuss and analyse the preliminaries of the switch-over to new company management systems as well as the essence, problems and consequences of that conversion. Naturally, the shift in economic and institutional policies was preceded by political decisions. The official communique on the reform, issued as a party resolution, was made public after the spring session of the MSZMPJ (29;3-14). This decision was the result of a compromise and in contrast with former reform schemes, the preceding debates received high publicity. Let me now discuss two of the relevant factors; namely the causes that compelled the party administration to launch a series of reforms and the range of the available alternatives. According to Lfiszl6 Antal, whose opinion is fully shared by this writer, ' . . . radical changes in the mechanism of economy are never set in motion by favourable circumstances alone but are forced by constraints caused by prolonged economic problems and/or the instability through disagreement within the political leadership.' (3;124) Obviously, present reforms were also brought about by necessity, and not by any inner development of the system.