17
Introduction
The 2002 United Nations Conference on Financing for Development held in Monterrey, Mexico emphasised that foreign direct investment (FDI) was one of the main
elements for successful development and the fight against poverty (UN 2002: 5).
The conference maintained that FDI inflows could facilitate the transfer of knowledge and technology, induce employment, boost productivity and enhance entrepreneurship as well as ultimately contribute to the eradication of poverty by stimulating
economic growth and development (UN 2002: ibid). Hence, transnational corporations (TNCs) are seen as prime developers within the context of an associative development strategy. They are attracted by the investment-enhancing effects of privatisation, liberalisation and macroeconomic stability (Klein et al. 2001: 5).
Two members of the European periphery have been repeatedly named as classic
examples of the current paradigm of integrative or associative development: Ireland
and Hungary (UNCTAD 2002: 169-173). During the latter half of the 1990s, both
countries resembled outliers in comparison to their respective country groups1 in
terms of unemployment rates, per capita growth, productivity and exports. They
belonged to the fastest growing economies in the OECD with economic growth
firmly based on exports. They followed a development strategy relying on the largescale attraction of export-oriented FDI within the context of capital and trade liberalisation. In both cases, predominately manufacturing TNCs set up production facilities to produce for the Single European Market (SEM).
The recipe for success in both countries is seen to lie in harnessing the forces of
increased international economic integration or globalisation with a strong regional
element. The former is defined as “the reduction of transaction costs for the flow of
goods and services, investment and short-term capital across national borders” (Elsenhans 2002: 53). The latter describes the process of regional convergence within
the context of the European Union (EU). Hungarian and Irish attraction polices
concentrated on turning their respective locational disadvantages into pronounced
advantages (Pailiginis 2000; Krugman 1997).
The apparent success of the Irish export-oriented and FDI-led development strategy led to its propagation as a possible development model for other peripheral
countries (Bradley 2000: 24).2 Ireland made a similar switch from import-
1 The comparative income group for Ireland are the so-called cohesion economies, who together
with Ireland had a GDP per capita income of below 75% of EU levels before the creation of the
Single European Market in 1992 (Spain, Portugal, Greece) (Bradley 2000: 5). The comparative
group for Hungary is comprised of the five former socialist Central and Eastern European Countries (CEEC-5), who joined the EU together with Hungary in May 2004 (The Czech Republic,
Slovakia, Slovenia, Poland).
2 See also G. Müller (2001) and U. Müller (2005: 238-241) for similar arguments in favour of
using the Irish experiences as a model for post-socialist transition.
18
substitution to export-orientation, accepted free trade and embarked on attracting
FDI (Barry 1991: 85-86).
More importantly, Bradley (2000: ibid.) emphasises the importance of the Irish
model for the Central and Eastern European Countries (CEEC). In their quest for
economic convergence, the former socialist countries are faced with similar tasks.
They follow an associative development strategy through progressive trade integration. They are in need of FDI inflows and are eligible for EU-aided investment programmes (Bradley 2000: 23)
However, Hungary was implementing its own FDI-led development strategy long
before Ireland was heralded as the “Celtic Tiger”. In difference to its regional
neighbours such as the Czech Republic and Poland, FDI was an integral part of the
Hungarian transition process from the start. Export-oriented TNCs mainly from the
EU were attracted by low taxes and low labour costs. They contributed to the “hidden Hungarian miracle” (Halpern/Wypolsz 1998: 1), as the country quickly overwhelmed its transitional recession and outperformed its regional neighbours.
As shown in the following table, Hungary was able to attain similar proportions
of foreign engagement in terms of employment, GVA, exports and gross output
compared to Ireland after only 10 years (Hamar 2001: 8). Although the Irish ratio of
FDI stock to GDP is twice as high as the Hungarian figures, Ireland’s FDI attraction
policies date back to the 1950s.
Table 1 FDI Manufacturing Penetration in Hungary and Ireland, 2001 (%)
GVA a Employment a Gross Output a Exports a FDI Stock/GDP b
IRL 83 49 80 80 126
H 64 44 73 88 61
Source: a Own calculations based in data from HCSO (2004a) and ICSO (2004);
b Figures for 2004 taken from Dicken (2007: 50)
The International Development Agenda
Both countries, therefore, conform to the “conventional view or orthodox view on
industrial development” (O’Malley 1989: 8). This perspective stresses the importance of the free operation of product and factor markets leading to the efficient and
rational use of production factors. Similarly, Barry (1991: 85) notes that Ireland
“served as one of the longest running examples of the type of outward-oriented
strategies recommended for developing countries by […] the World Bank and the
International Monetary Fund”. O’Malley (1989: 10) summarises the export-oriented
development strategy in three fundamental points: encouragement of export production, attraction of FDI and acceptance of free trade.
19
Ireland adhered to these policies before they constituted a developmental paradigm. In contrast, Hungary formulated its development strategy within the context
of the omnipresent orthodoxy of market-conform and export-led development following the country’s systemic change in 1990. Hungary followed the prescriptions
of the international development agenda, which were aligned to the notion of associative development in form of the participation in global trade flows via exportorientation (Andor 2000; Berend 2000).
The debt crisis in the 1980s delivered the final blow to the previous model of import-substituted industrialisation. Autocentric and state-led development was seen to
have been responsible for the high indebtedness of the periphery, as “protection was
overdone and led to inefficient allocation of resources due to distortions in factor
and product markets” (Schmitz 1984: 3).
Instead, underdevelopment was to be overcome by integrating the economic periphery into the global economy via capital and trade flows, acting as growth engines for industrialisation. Capital inflows and external demand for exports are seen
as vital elements to break the vicious circle of internal investment and demand impasses resulting from low savings and incomes (Fenández Jilberto/Mommen 1999:
2-3). Consequently, development policies were concentrated towards the facilitation
of market forces with a minimum of state interference and protectionism of the internal market in order to avert market distortions (Stiglitz 2002: 74).
Essentially, the associative international development agenda was expressed by
the so-called Washington Consensus. Outlining the common approach of World
Bank and IMF, the development policies built upon experiences made in Latin
America in the wake of the debt crisis and were designed to support the Eastern
European process of transition (Stiglitz 2002: 53).
Development was to be induced by creating an investment facilitating environment by following three policy pillars, encompassing macroeconomic stability via
fiscal austerity, the liberalisation of capital and trade flows as well as the comprehensive privatisation of economic actors (Stiglitz 2002: ibid).
The development policies were furthermore flanked by successive agreements on
international trade in the course of the completion of the Uruguay Round in 1994.
The provisions safeguard intellectual property rights and ensure minimal government interference and that internal markets remain open (Wade 2003: 624, 628).
Consequently, the room to manoeuvre for developing countries and catching-up
economies to initiate national policies for development was narrowed. Indeed, both
Wade (2003: 632) and Chang (2003a: 28) interpret the international development
agenda as precluding the options for catch-up development. By outlawing strategic
protectionism and limiting imitation, the prescribed development path is ironically
ahistoric (Gerschenkron 1966: 27).
Peripheral economies are forbidden to follow the same path that industrialised
countries took in their quest for economic development. In doing so, industrialised
countries are “trying to ‘kick away the ladder’ by insisting that developing countries
adopt polices and institutions that were not the ones they had used to develop”
(Chang 2003b: 139).
20
Hence, in the absence of being able to develop their own local capabilities and
technologies to participate in the global economy, peripheral countries are reliant on
external sources of capital and technology (Lall/Narula 2004: 457). Both are transferred in the form of FDI by TNCs, who are seen to deliver the necessary developmental inputs (Klein et al. 2001: 5).
Consequently, as a product of increased capital and trade liberalisation as well as
drivers of trade growth (Berend 2006: 270-271), the importance of TNCs as developmental agents rose in accordance with the decline of other sources of capital, such
as official development aid, and the increased volatility of debt-related capital imports (Nunnenkamp 2004a: 658).
Divergence from Cases of Successful Late Development
By implementing such an associative development strategy, Hungary and Ireland
diverge considerably from other examples of successful development such as in East
Asia. The success of export-led catch-up growth of the first generation of East Asian
Tiger economies influenced the formulation of the international development agenda
in favour of associative development (Elsenhans 2004: 90; Fernández Jilberto/Mommen 1999: 3). However, the singular emphasis of export promotion and
the role of macroeconomic stability in adapting tradable prices to international price
levels, as propagated by the World Bank (1993), is rather a short-sighted misconception of East Asian growth strategies (Wade 2005: 105; Wade 2004: xviii-xix).
Instead, their participation in the global economy was the result of a long-term
and complicated process of strategic interventionist and protectionist industrial policies. Prices were deliberately distorted towards creating local developmental capabilities (Amsden 1989: 139). Similar to the previous development path of industrialised nations and differing from the current paradigm of development, the East Asian
Tigers switched from import-substitution to export-orientation after their indigenous
export industries had attained international levels of competitiveness (Chang 2004:
689).
Protectionism was used strategically to protect infant industry from superior
competition in order to create comparative advantages (Wood et al. 2003: 16). Local
industry was repeatedly “nudged and prodded” by the state to technologically upgrade their productive capabilities (Wade 2005: 107). Furthermore, the East Asian
“Rice Economies” repeatedly used strategic currency devaluations to induce the
international competitiveness of their export sectors. As a result, these countries
transformed their comparative advantages into cost advantages by subjecting their
economies to trade competition (Elsenhans 2004: 100).
Although an important factor, FDI was not prioritised in the same manner by
these countries. Instead TNC investments were tightly regulated and used strategically to enhance indigenous capacities (Lall 2002: 82). TNCs were “jolted” towards
increasing and upgrading their local supplies as well as their export content (Wade
2005: 107).
21
Taiwan and South Korea integrated FDI within their national development strategies by following a strategic approach (Thurbon/Weiss 2006: 19). They implemented a policy of “dependency and penetration management” (Herkenrath 2003:
214), whereby the state actively pursued the integration of foreign firms and the
technological upgrading of foreign investments (Wood et al. 2003: 12).
In contrast, within the current context of export-oriented FDI-led development, as
displayed by Ireland and Hungary, foreign capital is the main agent for industrial
development. Furthermore, a far more passive approach by the state towards FDI is
undertaken, as TNCs are seen as “catalysts for industrial development” (Markusen/Venebles 1999: 335). FDI resembles a potential “package of tangible and
intangible assets” (UNCTAD 1999: 149), which affects the macro and microeconomic structure of the host economy.
The underlying rationale behind the attraction of FDI is the creation and the reaping of the positive spillovers ensuing from backward and forward linkages of TNC
investments. On the one hand, host countries wish to benefit from macroeconomic
gains in the form of fiscal benefits, export revenues, aggregate demand impulses and
additional employment. On the other hand, the attraction strategies are geared towards the support of structural and technological change within indigenous industries. As a result, microeconomic gains in form of increased international competitiveness are unleashed. Both factors imply the successful embeddedness of TNCs
into the host economy via the integration of indigenous firms in the global production networks of TNCs (Dicken 2007: 461-469).
The role of indigenous firms acting as suppliers or final producers allows a transfer of production know-how and technology from the technologically superior TNCs
to indigenous industry. Microeconomic gains, therefore, follow the premises of the
endogenous growth theory (Kottaridi 2005: 82; Romer 1986, 1990). The aggregate
diffusion of competitiveness enhancing technology is the result of the import of
spillovers via the attraction of TNCs. Technological progress is transmitted throughout the whole economy via its internalisation through competition, learning, education and demonstration effects (Dicken 2007: 468; Lall/Narula 2004: 452-453).
In opposition to the East Asian Tiger economies, both countries refrain from actively engaging in linkage promotion and industrial policies directed at increasing
local capabilities (Paus 2005: 95; O’Hearn 2000: 82). Instead they have concentrated
on the attraction of export-oriented FDI, attempting to improve the investment atmosphere through policies aimed at attaining and upholding macroeconomic stability, improving infrastructure, the provision of market information and education
investments as well as devising a favourable grants and subsidy systems for foreign
investment. Consequently, local capability development is left to market forces
(Lall/Narula 2004: 457).
22
Uneven Development
However, the concentration on attracting and utilising export-oriented TNCs as well
as relying on market forces to upgrade indigenous absorptive capabilities has
prompted the rise of socio-economic disparities. Hence, Ireland and Hungary follow
a course of “truncated development” (Lall/Narula 2004: 457). A closer look beneath
the glittering aggregate figures reveals a contradictory and crisis-ridden growth
process in both Hungary and Ireland. Distinct socioeconomic disparities have arisen
pertaining to the industrial structure and the dispersion of income. Economic or
industrial dualism is characterised by the evolution of two economic sectors, which
bear distinct performance differences and low levels of interdependence.
This results in a low level of diffusion of developmental inputs from the foreigndominated sector into the remaining economy. The insufficient embeddedness of
TNCs prompts the rise of foreign-dominated export enclaves (O’Hearn 2001; Ruane/U?ur 2006; Sass/Szanyi 2004; Günther 2002a; Fink 2004, 2006). Exportoriented, highly profitable and productive TNCs reside next to indigenous firms,
which are predominantly oriented towards the internal market, exhibit low productivity and low profitability. Economic growth in both countries is dependent on the
superior performance of TNCs.
Furthermore, industrial duality has contributed to increased income inequality in
both countries (Ferge 2002; Ferge/Tausz 2002; Szalai 2002; Fink 2004, 2006; Kirby
2002, 2004; O’Hearn 2001; Ó Riain/O’Connell 2000). Although FDI-led exportoriented growth enabled an increase in general incomes in Hungary and Ireland,
increased wealth was spread unevenly. Hungarian and Irish labour markets display a
distinct bias towards skilled employees, fuelling direct market income inequality to
the detriment of the low skilled. Inequality is exacerbated by skewed income policies, which are biased towards middle and high income groups.
These rising contradictions are related to the limited and restrained role of the
Hungarian and Irish states in the respective development process and to the quasi
oligopolistic nature of TNCs (Hymer 1976). Consequently, masked by rising per
capita incomes and TNC-related industrial production figures, economic growth is
uneven in both countries. A situation reminiscent of Singer’s (1970) state of industrial dualism has arisen, which is defined by the effects of the lack of diffusion of
superior TNC technology. Conversely, poverty and wealth as well as development
and underdevelopment coexist (Bailey/Driffield 2002: 57; Buckley 2006: 144).
Echoing Wade’s (2003: 653) notion of “disarticulation”, economic growth in
Hungary and Ireland results in the dependence on exports and therefore on foreign
market developments. Consequently, production is disconnected from internal demand and consumption patterns. Hence, despite inflows of large sums of high technology FDI and the improvement of aggregate economic credentials, the patterns of
economic growth remain peripheral in nature. Peripheral growth driven by the development of external markets is, therefore, “a result of growth in the capitalist core”
(Elsenhans 2007: 306).
23
The Argument and Structure
The existence of socioeconomic disparities and the dual nature of the Hungarian and
Irish development processes put into doubt not only the extent of developmental
success in both cases, but also the widely propagated merits of the FDI-led development strategy. Economic growth in both countries is characterised by peripherality, which is defined by the dependency on the growth and developmental inputs in
terms of demand, investment and technology stemming from the economic core
(Elsenhans 2007: 306). Moreover, when the Irish and Hungarian FDI-led growth
strategies are put into the wider historical context of economic and social development, it is evident that although per capita incomes are higher, both countries have
not succeeded to overcome their peripheral nature.
This analysis, therefore, aims to show that if a development strategy, which aims
to overcome previous development deficits, relies singularly on the attraction of
export-oriented FDI, then peripheral growth will perpetuate in form of uneven development. The examples of Ireland and Hungary show that the attraction of FDI
alone, therefore, cannot overcome peripheral modes of economic growth.
In both cases, the move towards the attraction of export-oriented FDI took place
after previous modernisation attempts failed to induce development. Consequently,
this political-economic analysis investigates and answers two issues. The first is
concerned with reasons for the choice of the current export-oriented FDI-led development strategy. More precisely: Why did both countries fail to develop indigenous
capabilities? The second issue entails analysing the results of the chosen development strategy of FDI-led export-orientation. Therefore: Has the FDI-led development strategy overcome peripheral growth in both countries?
The first question is dealt with in the first two chapters. By portraying the reasons
for Irish and Hungarian economic peripherality, the first chapter examines the various factors that contributed to the evolution of a detrimental developmental lock-in.
The historical and economic comparative analysis reveals common denominators,
despite the very different historical experiences made by both countries. It will be
shown that economic peripherality in both Hungary and Ireland was defined by a
detrimental specialisation on agricultural exports. A culmination of internal and
external factors led to the evolution of development blockages in Hungary and Ireland. Even though the individual factors in the respective countries differ from one
other, the results were similar. In both cases, underdevelopment and the corresponding peripherality resulted from the evolution of defective capitalism.
External factors were defined by Hungary’s and Ireland’s imperial political and
economic incorporation. The internal factors pertain to the respective socioeconomic
structure, which hindered the evolution of sufficient internal demand and markets
for industrial products. This led to the dominance of agricultural exports. Both countries were integrated as agricultural hinterlands within a wider imperial structure.
Imperial incorporation of feudal Hungary into the Habsburg Empire and Ireland into
the United Kingdom resulted in the capitalist penetration and subsequent deforma-
24
tion of the non-capitalist societies and economies (Berend 2001a; Elsenhans 1996:
84-95; Elsenhans 1987a: 35-40).
Consequently, non-capitalist structures were given a capitalist logic (Berend
2003: 22). Both countries’ roles as agricultural hinterlands within the imperial division of labour supported the specialisation on labour-extensive agricultural exports
and furthermore resembled the income base for the dominant socioeconomic classes.
A distinct socioeconomic set-up evolved, impeding indigenous industrialisation.
Consequently, uneven development ensued.
The second chapter then reviews subsequent modernisation attempts by both
countries. These constitute specific development regimes and endeavoured to attain
industrial development. The development regimes are defined as a coalition, comprising the state and the preferred source of entrepreneurial capital, whereby the
latter acts as the developmental agent (O’Hearn 1990: 2). Hence, a political coalition
was formed between the state with its institutions and the developmental agent
(Ó Riain 2004a: 169). The role of the state in the development process is captured
by using the neo-institutionalist concepts of autonomy and capacity (Skocpol 1985:
9). In their basic definitions, autonomy is defined as the ability of the state to define
and pursue its own goals in the form of policymaking. Capacity encompasses the
ability of the state to successfully implement the chosen policies of development
(Skocpol 1985: ibid.).
However, the notion of autonomy is differentiated. External autonomy takes the
influence of exogenous factors on policymaking into account and internal autonomy
denotes the degree of isolation from internal partisan or vested interests. Within the
context of development regimes, capacity also includes the ability of the respective
developmental agent to produce the envisaged developmental inputs. Following
Hirschmann’s (1988; 1970) notion of exit and voice, the concept of popular dissent/consent towards the respective development regime is used to explain change or
continuity. Furthermore, the state can attempt to influence popular consent through
compensation, accommodation and suppression on the grounds of political efficacy
(Greskovits 1998: 137).
By employing the aforementioned analytical concept, the divergence and complementarity of Hungarian and Irish development regimes can be accounted for.
Both countries were faced with a low level of external autonomy due to significance
of international economic and political occurrences.
However Hungary was less fortunate, as it repeatedly came under strong political
and economic influence of dominant regional powers partly as a result of voluntary
subjugation by the dominant socioeconomic classes.
Nevertheless, exogenous factors detrimentally affected the performance of the respective developmental agent and hence crippled the state’s capacity to attain its
development goals. Consequently, a socioeconomic crisis ensued, prompting popular dissent.
However, the reaction to crisis was different. On the one hand, Hungary’s dominant autocratic elites reacted to the shortcomings of development regimes by increasing the state’s internal and external autonomy.
25
External economic influences were narrowed and dissent was combated. State capacity was continually enlarged, culminating in the socialist development regime.
Although the socialist development regime managed to modernise Hungarian society and propel it towards industrialisation, modernisation was based on antiquated
technologies.
Furthermore, state capacity proved to be overbearing and was unable to effectively steer the complex system of a centrally administered economy and shield the
economy from external influences (Berend 2000).
Ireland displays, on the other hand, a far higher degree of continuity due to the
low level of direct external influence on policymaking and the high propensity of the
population to emigrate (Exit), which effectively relieved the democratic socioeconomic elites from the pressure to react (Mjøset 1992).
Regime change took place, when the emigration channels were blocked, leading
to an increase in voiced dissent and an eventual erosion of internal autonomy. Nevertheless, the phase of Irish economic nationalism shows that the state was willing to
decrease the influence of external economic occurrences. However, the capacity of
the state to implement its development goals was left more or less unchanged, as the
developmental agent remained private entrepreneurial capital.
The inability of the development regimes of socialism in Hungary and importsubstitution in Ireland to induce the envisaged developmental results eventually led
to their replacement by the current FDI-led development regime. In Hungary this
took place with the downfall of the socialist system and the introduction of democracy in 1990. In Ireland the turn towards the attraction of export-oriented FDI was a
consequence of the grave socioeconomic crisis of the 1950s.
The third chapter demonstrates that despite recurring socio-economic crises, the
basic calibration of both state autonomy and capacity within the Hungarian and Irish
FDI-led development regimes remained unchanged. On the one hand, both Hungarian and Irish states can preside over a wide-ranging degree of internal autonomy. As
a result of specific socioeconomic factors and the structure of the political system,
policymaking is effectively shielded from internal interests beyond those represented by the development regime. On the other hand, the implementation of the
FDI-led export-oriented development strategy displays a low level of state capacity,
as the Hungarian and Irish states refrain from direct engagement in the development
process other than the attraction of TNCs.
The industrial policies are restricted to the creation of an investment-friendly atmosphere via the provision of incentives and the assurance of minimal regulative
state interventions. Both states restrict their developmental role to supply-side interventions in the areas of human capital augmentation and the provision of an adequate infrastructure in an attempt to increase the absorptive capability of indigenous
firms for linkages with TNCs.
These locational policies are accompanied by macroeconomic stabilisation, which
supports an orientation on exports and the reduction of production costs. The policies of macroeconomic stabilisation further amplify low state capacity due to the
spending and cost sensitivity of the development strategy.
26
As argued in the fourth chapter, these policies have created socioeconomic disparities. Essentially, they result from the low embeddedness of TNCs in the respective economy. On the one hand, TNCs are unwilling to cooperate with indigenous
firms and share their knowledge. On the other hand, they are unable to cooperate
with indigenous firms.
The first argument is related to the nature of FDI itself. As argued by Hymer
(1976: 25, 85), FDI is seen as a sign of market imperfections. It is undertaken to
preserve or increase firm-specific competitive intangible and tangible advantages.
Essentially, these advantages render the respective TNC a quasi-oligopolistic or
even monopolistic market position and therefore guarantee the appropriation of
economic rents (Dunning 1993: 69-70).
Consequently, technology transfer is minimal, as TNCs are unlikely to jeopardise
their competitive advantages and their rents by cooperating with or integrating local
firms within their international production chains (Elsenhans 1987a: 88).
Nevertheless, it would be short-sighted to place the blame singularly on TNCs.
As Crotty et al. (1998: 119) argue, “foreign direct investment is neither inherently
good nor bad”. Instead, the developmental outcome of TNC engagement depends on
the institutional and policy context within which FDI takes place (Evans 1985: 195,
200).
Hence, the second argument is related to the situation of indigenous enterprise,
which is influenced by industrial policy. Indigenous firms are not capable of acting
as cooperation partners for TNCs, as they lack absorptive capabilities for TNC technologies. This, however, is the result of state policies and previous development
(Paus 2005: 30; Lall 2002: 64).
The state in both cases displays a high capacity to attract FDI, but a low capacity
to ensure the sufficient integration of investing TNCs into the host economy. Furthermore, industrial policies are unable to create and enlarge domestic absorptive
capabilities. Instead, the state relies singularly on the developmental inputs stemming from export-oriented TNCs to augment the international competitiveness of
indigenous firms.
Similarly, in terms of social disparities, the state is not able to tackle the FDIrelated factor market distortions. These not only hinder indigenous firms to recruit
affordable skilled personnel and thereby to ascend the technological ladder, but also
contribute to increased wage inequality. Social disparities additionally fuel inequality via the political efficacy of its compensation policies, which are biased towards
middle and higher income groups.
Thus, the growth levels attained in the 1990s mask the continued peripheral nature of growth in both countries. This is related to the low level of state capacity to
steer the development process, prompting the rise of socioeconomic dualities. A
dislocated growth process has ensued due to the poor embeddedness of TNCs into
the respective host economy, leading to the evolution of TNC export enclaves dominating aggregate growth figures and a low diffusion of spillovers into the rest of the
host economy.
27
Finally, the study concludes with an overview of the main findings concerning the
Irish and Hungarian development strategies. Consequently, both countries show that
FDI can be of high quantity, but of questionable developmental quality.
Both economies remain peripheral, despite increased per capita incomes. Economic growth in both cases remains heavily dependent on inputs in the form of
demand and investment stemming from the economic core.
Hungary and Ireland are currently increasingly experiencing macroeconomic imbalances, which question the sustainability and the feasibility of the FDI-led development strategies. An alternative development regime and corresponding policies
are offered as possible solutions to the currently propagated strategy of FDI-led
development. The proposed alternatives aim to attain an integrated growth process,
which can overcome the peripheral growth.
Chapter Preview
References
Zusammenfassung
Irland und Ungarn verfolgen eine Entwicklungsstrategie, die in bewusster Abhängigkeit von Globalisierungsprozessen in Form von ausländischen Direktinvestitionen steht und sich als Paradigma in der Peripherie durchgesetzt hat. Doch dieser Entwicklungspfad hat zu einer ungleichen und abhängigen Entwicklung geführt. Dies ist laut dem Autor das Resultat des mangelnden Gestaltungswillens beider Staaten, für einen gleichgewichtigen Wachstumsprozess zu sorgen. Die historische Analyse zeigt, dass eine auf ausländische Firmen fußende Entwicklungsstrategie nicht ausreicht, um traditionelle Peripheralität zu überwinden. Der Autor fordert eine Reform des Entwicklungsparadigmas, um eine gleichgewichtige Entwicklung zu ermöglichen.