Philipp Fink, Introduction in:

Philipp Fink

Late Development in Hungary and Ireland, page 17 - 27

From Rags to Riches?

1. Edition 2009, ISBN print: 978-3-8329-4173-4, ISBN online: 978-3-8452-1720-8

Series: Nomos Universitätsschriften - Politik, vol. 168

Bibliographic information
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.

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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.