Philipp Fink, Continued Hungarian Backwardness in:

Philipp Fink

Late Development in Hungary and Ireland, page 90 - 91

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
90 One-party-rule was finally ended following the controversial publication of an internal re-evaluation of the 1956 Revolution by the MSZMP’s Central Committee in January 1989. By referring to the suppression of the 1956 Revolution as an unlawful act. The final pillar of Kádárism was demolished, as one party rule was without any official legitimacy (Berend 1996: 274). Consequently, a few days later in February the MSZMP renounced its power monopoly, legalised political parties and began negotiations with the opposition. The first democratic elections on 8th April 1990 officially concluded the era of Hungarian socialism (Fischer/Gündisch 1999: 239-241). To sum-up, state-socialist modernisation managed to propel Hungary towards an industrial society. Within a situation of compromised external autonomy, the oneparty-state and its ubiquitous bureaucracy guaranteed a high degree of internal autonomy and capacity to mobilise high levels of labour and capital. Over-capacity of the state ensued resulting in the technological backwardness. The economic system malfunctioned, detrimentally affecting the state’s capacity. Hence, the repeated economic reforms can be seen as an attempt of the state to fine tune the development regime. However, the reforms failed to tackle the underlying problem of technological backwardness and inefficiency, reducing the state’s capacity and internal autonomy. Ensuing economic demise resulted in rising dissent, leading to the erosion of internal autonomy and the eventual demise of the development regime. 2.2.4 Continued Hungarian Backwardness The “one and a half centuries of Hungarian economic modernisation” (Berend 2001a: 1) show surprising similarities, despite differing historical circumstances and ideologies. The three development regimes under scrutiny illustrate not only the existence of similar constraints to Hungarian development, but also portray similar reactions by the dominant socioeconomic elites. All development regimes failed to overcome Hungary’s inherent economic backwardness. In all cases, an internationally competitive indigenous industrial sector failed to evolve due to internal and external factors effectively reducing the state’s autonomy and capacity for modernisation. External autonomy in all cases was constrained. Hungary repeatedly found its autonomy compromised by the actions of regional hegemonic powers. Subsequently, the formulation of economic policies followed external hegemonic interests. Nevertheless, it would be naïve to conclude that Hungary was always subjugated. Rather, the dominant socioeconomic elites not only accepted the situation, but also collaborated with the respective hegemonic powers in order to ensure their socioeconomic predominance. Hence, economic policies were an expression of the respective elites’ interests. One can, therefore, conclude that effectively, Hungary experienced two development regimes, as in the cases of the Habsburg Era and the interwar period agricul- 91 tural exports were prioritised. The period of state-socialism managed break this pattern, but created new constraints arose through an antiquated industrialisation process, resulting in Hungary’s continued backwardness. The level of internal autonomy was high. The insulation of the state from counter-interests was the result of the authoritarian structure of the political system, upholding the respective elite’s interests. The rising contradictions of the respective development regimes caused an erosion of the internal autonomy in all development regimes. The capacity of the respective development regimes to implement the developmental goals was repeatedly reduced by international economic repercussions, affecting the respective developmental agent. Hungary did not engage in social and economic reforms to mould its socioeconomic institutions towards the exigencies of international markets. Instead, in the event of economic crisis, the respective political elites continuously chose to reduce external economic influences by turning away from international trade in a bid to secure their socioeconomic predominance. In each case, the state resorted to increase its intervention into the economy in a bid to enlarge its developmental capacity. By refuting adjustment and adaptation to international economic developments, the malfunctioning and backward economic structure was preserved. The innate contradictions of preserving the backward economic and socioeconomic structures bred popular dissent. Consent towards the policies of the respective development regime, which guaranteed its legitimacy, was in all cases built upon varying degrees of accommodation, cooptation and suppression of dissent. However, the erosion of the state’s capacity to deliver the required goods of prosperity and rising living standards caused increasing popular dissatisfaction. This eroded the internal autonomy of the respective regime. However, popular dissent was crushed with the exception of the state-socialist development regime. 2.3 Irish Development Regimes In contrast to Hungary, the Irish development regimes preceding the current FDI-led export-oriented industrialisation regime are fewer and the time span under review is shorter. In total two development regimes preceded the current regime. Starting with the Irish Free State, the period under investigation is concerned with the era following the attainment of Irish statehood after independence from the UK in 1922. The first development regime was built upon the generation of agricultural export incomes within a constrained developmental context defined by consolidation and reconstruction in the aftermath of partition, the War of Independence and the Irish Civil War as well as the detrimental effects of international economic recessions. The following developmental period (1932-1958) was characterised by a protectionist regime, which focussed on industrialisation via import-substitution.

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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.