Political economy of privatization in Hungary: A progress report
This paper focuses on the political economy of privatization in its second phase in Hungary, the country which, overall, has gone furthest in privatizing public utilities, introducing elements of competition and setting up regulatory mechanisms and institutions to monitor them. The background to Hungary's reform path, the antecedents to privatization, the debate on the issues, the institutional framework and the progress of privatization in Hungary up to late 1993/early 1994 are well-documented elsewhere, including by the present authors. Therefore, the paper presents a brief review of the evolutionary path of Hungary's privatization "vision", policy and strategy under the government of Jozsef Antall (1990-1994), and attempts to identify the factors influencing this evolution. Developments regarding privatization under the reform- socialist/liberal coalition government led by Gyula Horn, which came to power in 1994, and a detailed examination of the privatization of the major utilities and the regulatory environment currently in place, forms the core of this study. Finally, the paper sets the above in the context of the overall development of the private sector in Hungary.
POLICY ACTORS AND POLICY MAKING IN CONTEMPORARY HUNGARY
The paper explores the ways and extent to which national policy actors play a significant role in policy making in the context ofpost-communist transformation. It assesses the view that post-communist national states are especially vulnerable to international influences and are weak in asserting national interests in policy making. As a result, this view suggests, post-communist governments have been obliged to adopt neo-liberal policies and to promote forms of privatisation and the development of a market economy that have enabled the integration of national economies into the international (capitalist) economic order. In this context, it is often argued, governments come under strong influences of globalising forces and policy making reflects these influences rather than the interests of either state or social actors from within the national societies. The paper takes the case of telecoms policy in post-communist Hungary, focusing in particular on the provision of landline services. It explores the range of influences on policy making in this area and assesses the relative strengths of different influences. Telecoms policy provides an interesting case because of the importance of telecom reform for international market competitiveness and the active role of multi-national companies, international agencies and the EU in promoting new ideas in this area, but also because it prompted a significant amount of pressure politics from different interests within the Hungary, including the business community and wider social interests. The paper draws on interview-based research in Hungary. 1 In many of the explanations of the ‘transition to’ or ‘making of’ capitalism in East Central Europe the role of the national government and national policy actors is often seen as minimal. In most countries of the region, following the fall of the communist regimes after 1989, the new political elites, often supported by advisers from international agencies and financial institutions, introduced measures to roll back the state and allow the market to exert its influence with only limited state intervention. After introducing the legislation to abolish central planning, privatise state assets, remove state subsidies, and set up the necessary institutions to enable market competition, it was envisaged that the economic role of the state should be limited in scope. 1. The Theoretical Debate. An influential view in contemporary academic writing is that the radical transformation of the economic systems of ECE, and the ensuing integration of those countries into the market based system of the European Union, provide evidence in support of theories of globalisation that stress how modernising countries have to conform to the trends of the global economy. Moreover, the experience of ECE is taken to show that the modern state is relatively weak in the face of the tendencies towards
Deliberative Democracy and the Resource Curse: A Nationwide Experiment in Tanzania
Oil and gas discoveries in developing countries are often associated with short-sighted economic policies and, in response, calls to insulate resource management from populist impulses. We report on a randomized experiment testing methods to overcome this apparent tension between sound resource governance and democratic politics. Soon after Tanzania’s discovery of major natural gas reserves, we invited a nationally representative sample of voters to an intensive public deliberation of policy options featuring nationally recognized experts and small-group discussions. Democratic deliberation reinforced the public’s strong preference for rapid spending of gas revenues, but also increased support for various prudential and economically orthodox measures, including independent oversight of gas revenues, limits on government borrowing, and selling gas abroad rather than subsidizing fuel at home. These effects were driven by deliberation per se, rather than a pure information treatment, and show no evidence of contamination by facilitatoror peer-effects in group deliberations. www.cgdev.org Justin Sandefur, Nancy Birdsall, James Fishkin, and Mujobu Moyo