59 The policies formulated to attain the developmental goals are the outcome of decision-making. The notion of autonomy relates to the ability of the state to define and pursue its own goals in the form of policy-making. A prerequisite for state autonomy is a high degree of isolation from partisan or vested interests (Skocpol 1985: 9). Within the context of the analysis of development regimes, autonomy therefore describes the exclusion of interests outside of those represented by the developmental agent. Nevertheless, the examples of Ireland and Hungary show that policy formulation was never free of external influences in the form of exogenous political and economic factors. External factors can influence the formation and the performance of a development regime such as effects of international economic interdependence or the influence of greater regional powers. Hence, in similarity to O’Hearn (1990: 32), development regimes are seen as the result of exogenous pressure exerted by the forces of economic interdependence. Thus, the autonomy of the state can be infringed externally. However, O’Hearn’s (2001) dependency-driven analysis overemphasises the role of external constraints in inducing a change to development policies. Although the role of external influences on policy making is certainly valid, internal or social dimensions remain nevertheless underestimated (Kirby 2002: 93). Dependent development is far more the result of a culmination of external and internal constraints. Dependency is therefore the outcome and not the reason for failed development (Elsenhans 1987b: 66). Consequently, internal events and structures also affect the autonomy of the state to formulate the respective development policies. In this case one can speak of internal autonomy. 2.1.2 Popular Consent and Dissent A further influential factor determining the success of a development regime as well as its constitution and trajectory is the issue of popular consent or dissent to the chosen development strategy and ultimately the development regime. Hirschman’s (1988, 1970) Exit/Voice concept outlines the two possible responses, which can be taken by individuals in response to organisational decline. The responses are defined by the incapability of the organisation to produce the desired goods resulting in waning loyalty. The choice of “Exit” denotes the preference for a different social organisation than the prevailing form. This leads to the exit of the disillusioned individual from the declining organisation. The option of “Voice” entails the voicing of an opinion to avert decline by inducing change in the organisation in order to receive the desired goods. Voice is only a viable option when the opportunity costs to the individual for engaging in reform are lower than the costs for exiting the organisation (Hirschman 1988: 69-74). Greskovits (1998: 75) shows that the forms of voice and exit depend on the context in which the individual is able to respond. Exit can take on the extreme form of emigration, such as in the case of Ireland. In societies, where individual free move- 60 ment is restricted such as in the case of authoritarian Hungary until 1990, exit can also be seen as “going informal”. Individuals earn their livelihood in the grey or black economy (Greskovits/Bohle 2001: 13). Furthermore, voice in democracies obviously implies the voting out of the ruling government or protest voting. In the case of unreceptive political institutions or authoritarian systems, voice can also take on the extreme form of political violence, uprisings, revolts or even revolutions, as has been repeatedly shown in Hungarian history (Greskovits 1998: 76). Hence, popular consent/dissent influences the above mentioned variables of autonomy and capacity. Consent is closely related to the performance of the respective development regime and, therefore, to the state’s capacity to steer the development process. A decrease in state capacity resulting from the underperformance of the developmental agent can jeopardise the attainment of developmental goals, such as a rise in living standards, employment and economic growth. As a result, dissent can erode the internal autonomy of the state and eventually contribute to the development regime’s downfall by questioning its legitimacy (Greskovits 1998: 72-73). Consequently, the state has to devise strategies to attain popular consent to the development regime. Authoritarian political systems can simply suppress and crush dissent. Although as will be shown in the Hungarian case, this can only be a shortterm tactic of postponement, as dissent can erupt into violent revolution (Greskovits 1998: 76). Instead, the state’s internal autonomy can be embedded into a “set of social ties that bind the state to society and provide institutionalised channels for the continual negotiation and renegotiation of goals and policies” (Evans 2003: 128). Hence, dissent is accommodated and co-opted through a communicative platform by which consent can be attained by “providing concrete concessions to those included (and even to those exploited)” (Ó Riain 2004a: 169). Greskovits (1998: 137) shows how these concessions can be attained through “politics of compensation”. Compensation is strategically used to diffuse political tensions that could surface in case of a malfunctioning of the development strategy. Compensatory elements are directed at thwarting the evolution of possible oppositional coalitions. These could pose a threat to the developmental strategy and question the development regime by eroding the state’s internal autonomy (Greskovits 1998: 139). However, compensation follows political justification and is, hence, defined by political efficacy. This principle denotes that particular societal groups are compensated on the grounds of their relevance to the state and the development regime in terms of their threat potential or their importance to deliver the necessary developmental inputs (Greskovits 1998: 143-144). 2.2 Hungarian Development Regimes Beginning with the Hungarian experiences, three regimes prior to the current FDIled development strategy can be identified (Berend 2001a: 1-2). The first period (1867-1919) is situated in the era of the Double-Monarchy after the Compromise of 1867 prompted the renewal of Hungarian policy autonomy within the context of the