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The Great Transformation -- Without A Technological Revolution. The Case Of Hungary

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  • Balazs Hamori
  • Katalin Szabo

Abstract

The study examines the question of why the Hungarian economy is drifting twenty years after the change of regime into similarly critical situations, than it had directly before the change. Why the indebtedness has not been stopped, why the consolidation of the economy was not successful, and why the undealyable reforms were not set on their way? The authors mark the "one-sidedness" of the change of the regime as one of the reasons of this, meaining that the institutional changes unfolding at the end of the 80's, the political transformation and the foundation of the fundamental institutions of the market economy were not based on a technological transformation in the 90's. The variously colored governments remained equally insensitive to the necessity of the IT revolution, and to its consequences. For example, while an information technology ministry had already been in place in the United Kingdom in 1985, in Hungary the various economic plans, documents, governmental programs before and after the change of regime were based on an economic world view that was oriented towards the most traditional market economy. The regime-changers up to date have hardly taken any note of the fact that time had already past over the traditional market economy. The authors connect the deficiencies of the technological background of the change of the regimes with the perceptible (and growing) lagging of our competitiveness in several areas, and that the knowledge economy - compared even with countries starting from similar position - remained vestigial, or it has been growing extremely unevenly in the different areas.

Suggested Citation

  • Balazs Hamori & Katalin Szabo, 2012. "The Great Transformation -- Without A Technological Revolution. The Case Of Hungary," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 8(2), pages 151-164.
  • Handle: RePEc:mje:mjejnl:v:8:y:2012:i:2:p:151-164
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    References listed on IDEAS

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    1. Douglass C. North & John Joseph Wallis & Barry R. Weingast, 2006. "A Conceptual Framework for Interpreting Recorded Human History," NBER Working Papers 12795, National Bureau of Economic Research, Inc.
    2. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    3. Kornai, János, 2010. "Innováció és dinamizmus. Kölcsönhatás a rendszerek és a technikai haladás között
      [Innovation and dynamism. Reciprocal effect between systems and technical advance]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 1-36.
    4. Daron Acemoglu & Simon Johnson & James A. Robinson, 2002. "Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution," The Quarterly Journal of Economics, Oxford University Press, vol. 117(4), pages 1231-1294.
    5. Robert W. Fogel, 1999. "Catching Up with the Economy," American Economic Review, American Economic Association, pages 1-21.
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