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social partnership process by the social partners and the state (Hardiman 2000a: 292-
293).
Hence, the Irish state reacted to the economic turbulences of the 1970s and 1980s
by widening its autonomy through institutional readjustment; however it retained its
reduced capacity. A stronger impetus was placed on indigenous development, leading to its de-politicisation, contributing to the state’s internal autonomy. The state’s
widened autonomy was also embedded within a network defined by international
links and relationships with client constituencies. Similarly, political and social
consensus to the development strategy was reached through a revitalisation of the
social partnership process, enabling macroeconomic stability.
3.5 Complementarity and Divergence
Although the evolution of the Hungarian and Irish FDI-led development regimes
displays a number of differences, there are similarities, resulting from the common
trajectory of the development strategy.
Beginning with the foundations of the development regimes, the scope for alternative development strategies was almost non-existent owing to the influence of
international actors for Hungary. In Ireland internal factors were of more importance. Aside from economic malaise, the decision to attract FDI was also the result
of specific socioeconomic and political issues, i.e. internal factors. Due to the disrepute of local entrepreneurial elites, both countries lacked a capable development
agent to fulfil the task of generating the required developmental inputs. Accordingly,
foreign capital replaced national capital in the new development regime.
Initially FDI was used in the Hungarian privatisation process as an instrument to
secure the process of democratisation and economic transition, as potentially harmful post-socialist elite networks were dismantled. In Ireland, FDI and trade liberalisation was a measure to reduce opposition from indigenous capital towards restructuring as well as to strike a compromise between conflicting “expansionist” and
“deflationist” interests within the state.
In both cases, the issue of development policy was highly politicised. Both states
reacted to a malfunctioning of the development regime, resulting from the low level
of external autonomy, by widening the state’s internal autonomy, thereby effectively
shielding the policy area from outside influences. However, the respective institutionalisation was different.
In Ireland, the continued failure to develop an internationally viable indigenous
sector led to the disembodiment of industrial policymaking and its implementation
from the political system. The policy area was transferred to semi-autonomous state
agencies and hence was depoliticised. The Irish state managed to embed its autonomy in industrial and development policy within a mesh of social and institutional
ties. However, the state’s embeddedness is biased towards industrial and technocratic interests.
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In contrast, industrial policy in Hungary was increasingly politicised by its centralisation under state control. Nevertheless, the increase in internal state autonomy
did not match the level of the state’s capacity in the development process in either
Hungary or Ireland. As in both cases, the state follows a predominately noninterventionist path. The state concentrates its actions on supply-side polices, fiscal
and financial incentives to incite investment and to create employment. In part, this
is the result of a common philosophy on the role of the state in the development
process, which prioritises market actors and forces. It is also partly the result of the
adherence to the discussed spending constraints of the development strategy.
Similarly, attempts by the Hungarian and Irish states to attain popular consent to
the development strategy frequently conflicted with the described spending constraints. Consequently, macroeconomic imbalances ensued, illustrating the perils of
premature economic integration. Furthermore, compensatory policies followed the
lines of political efficacy, whereby middle and higher income groups disproportionately benefited. They resemble key voters in highly competitive political systems.
Both countries diverge in terms of institutionalising consent to the development
strategy. The revitalisation of the tripartite social partnership process in Ireland was
important to regain macroeconomic stabilisation. Nevertheless, the lack of pressure
stemming from popular dissent is the key to understand the longevity of the development regime and its calibration in Ireland. Emigration repeatedly acted as a safety
valve. Dissent only compelled the state to action after exit possibilities were reduced. In contrast, consent in Hungary can be characterised by “non-voice”. The
extreme politicisation together with a weak civil society and corporatist institutions
resulted in the state’s low embeddedness of autonomy. Effectively, lacking a platform for expression, dissent is silenced until the elections, leading to the frequent
change in governments.
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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.