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The paper intends to give an insight into the relations of the economic and political systems of the Central Asian republics using the theoretical framework of the “rentier economy” and “rentier state” approach. The main findings of the paper are that two (Kazakhstan and Turkmenistan) of the five states examined are commodity export dependent “full-scale” rentier states. The two political systems are of a stable neo-patrimonial regime character, while the Kyrgyz Republic and Tajikistan, poor in natural resources but dependent on external rents, may be described as “semi-rentier” states or “rentier economies”. They are politically more instable, but have an altogether authoritarian, oligarchical “clan-based” character. Uzbekistan with its closed economy, showing tendencies of economic autarchy, is also a potentially politically unstable clan-based regime. Thus, in the Central Asian context, the rentier state or rentier economy character affects the political stability of the actual regimes rather than having a direct impact on whether power is exercised in an autocratic or democratic way.

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The main question of the paper, in the context of European economic governance reforms, is to assess whether strengthening fiscal institutions will resolve the problem of budgetary imbalances in countries prone to the deficit bias. The central argument is that the commitment behind the institutional changes — signaled by the composition of fiscal consolidation and the role of external actors — is critical for the success of reforms. In order to examine this thesis the contrasting experiences of Hungary and Slovakia are analyzed. While both have struggled with fiscal imbalances and eventually introduced far-reaching institutional reforms, these were successful in Slovakia while reversed in Hungary. The major implication of these cases is that changes in fiscal management cannot be treated as mere technicalities and are inseparable from the broader economic policy agenda. In countries where short-term considerations dominate decision-making, rules are implemented only under strong external pressure and are likely to be circumvented.

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This paper develops a simple model that helps understand an important fact concerning cross-country pattern of growth and institutions shown by BenYishay and Betancourt (2010). They show that civil freedoms, especially one of their components called Autonomy and Individual Rights, are more important determinants of economic development than constraints on executives, a widely used measure in the literature on institutions and growth. The paper provides an interpretation of this fact through the lense of an argument that puts emphasis on three insights. The first is that civil freedoms can be seen as property rights broadly understood. The second is that with a higher scope of property rights enforced, the government must be able to commit to a lower level of expropriation of income. Third, institutions of freedom are sticky: they must be in line with the culture of the country so that they can be enforced with a reasonable cost. By addressing this specific question of constraints on executives versus civil freedoms the paper joins the literature which emphasizes the importance of culture in economic development.

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Acta Veterinaria Hungarica
Authors: Małgorzata Kandefer-Gola, Marcin Nowak, Janusz Madej, Stanisław Dzimira, Rafal Ciaputa and Izabela Janus

DeInnocentes, P., Agarwal, P. and Bird, R. C. (2009): Phenotype-rescue of cyclin-dependent kinase inhibitor p16/INK4A defects in a spontaneous canine cell model of breast cancer. J. Cell Biochem. 106 , 491–505. Bird R

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We compare the pre- and post-2010 Hungarian political regimes through the lens of pension policies. We label the pre-2010 regime as democratic populist because it was characterized by fiscally irresponsible policies, yet it maintained the system of checks and balances and the rule of law. In contrast, we call the post-2010 regime authoritarian populist as it has employed authoritarian political techniques while maintained popular legitimation through regular elections. To substantiate the difference between the two periods from an economic viewpoint, we compare pre- and post-2010 pension policies to find important differences as well as surprising similarities. In particular, we analysed the following five policy aspects: (a) reform and partial privatization of the government-run pension system, (b) policies on the statutory (normal) and the effective (average) pension age, (c) indexation, (d) progression in benefits calculations and progressivity in the personal income tax, and (e) contribution rates. Based on ideological preferences, we argue that one would expect the pension system to become financially more sustainable but less redistributive after 2010 in comparison to the preceding period. Yet, we find that although pro-poor redistribution through the pension system has indeed been curtailed, fiscal sustainability has not improved due to the erratic policies.

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The main ambition of this study is to explain the unexpected change in the transition process of some Central and Eastern European (CEE) countries starting in the second half of the 2000s. Special attention is paid to changes in and the attitudes of governments toward state ownership. Although statist approaches gained momentum in the economic policy of various states in and after the 2008/2009 crisis, this did not mean a fundamental reorientation expressed in changes in the main economic conditions such as ownership patterns. Nevertheless, governments in some CEE countries seem to flirt with such ideas too in the general policy of increasing state economic intervention. The privatisation process was stopped and in a number of cases, formerly privatised assets were re-nationalised. Governments strengthened their influence in the governance structure in mixed-ownership companies. The main body of the present paper provides a better understanding of this change in state property policies. We also call attention to the risks of a reversal of the privatisation logic. An increasing role of the state as proprietor may today strengthen similar negative political and economic consequences and risks as the ones against which the privatisation agenda of the 1990s was suggested. It can reduce competition, give way for political and personal rentseeking, and weaken the functions of market economic institutions.

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We tested the hypothesis of the political basis for economic rights and constructed our own variables of political regimes’ classification for the years 1820–2000. We found significant positive interdependencies between democracy indicators and economic growth. The protection of private property rights requires, first and foremost, due guarantees for personal immunity. Discretionary arrests and property seizures undermine any formal guarantees of private property, low taxation benefits, etc. Personal immunity should be defended even for “unpleasant” persons or for the possible political opponents of the country’s ruler.

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The recent admission of Slovakia into the Economic and Monetary Union (EMU) stands in sharp contrast with the considerable difficulties faced by Hungary with the fulfilment of the Maastricht criteria. This is a puzzling development for two reasons: first, during the early phase of the transition process Hungary was ahead of Slovakia, and second, the high level of political polarisation and general public disillusionment are shared characteristics of the two countries and not conducive to reforms in either case. In order to address these contradictions a theoretical framework is developed examining the conditions of structural reforms in a low-trust environment, where promises about long-term benefits for short-term costs are not believed. After the identification of three potential factors — perception of crisis, emergence of credible reformers, elite consensus — that can help to overcome the gap in credibility, the theoretical framework is applied to the transition history of the two countries. It is shown that while in the past decade all three factors had been present in Slovakia, the former success of Hungary strongly contributed to the absence of such special circumstances. The continued divergence of the two countries, however, cannot be taken for granted as in both cases reform cycles rather than sustainable progress can be observed. In order to ensure sustainability the difficult tasks of consensus- and trust-building cannot be avoided.

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This paper deals with the possible existence of political budget cycles (PBCs) within the European Union (EU). I use panel data for 28 EU countries from 1995 to 2016 and provide estimates based on dynamic panel regressions. I employ a system-GMM estimator complemented by the Principal Component Analysis (PCA) to limit the number of instruments. The specifications include structural budget balances related to the potential GDP, thereby limiting the initial endogeneity. These measures capture the true motivation behind fiscal policies. The results suggest that the EU member states exhibit PBCs: (i) the intervention occurs in the year before elections and (ii) the structural budget balance to the potential GDP ratio is lower by −0.41 percentage points a year before elections. In addition, I have investigated the EU fragmentation in terms of the PBCs and selected 8 countries’ characteristics correlating to the existence of these cycles. These include lower GDP per capita, post-communist background, low tax burden, high perceived corruption, low levels of media freedom and internet usage, lower number of directly voted-in legislative officials, and a low parliamentary voter turnout.

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This essay attempts to understand János Kornai’s works from a political economy perspective. It argues that Kornai has significantly contributed to the formation of a new paradigm of political economy. The main endeavor of Kornai has been the combination of analytical concepts of economics with the empirical description of real economies. After a certain period of theoretical experimentation János Kornai formulated his research program that can be called the shortage economy explanation of the socialist system. The Economics of Shortage and The Socialist System have created a new theoretical paradigm in a framework in which it has become possible to establish a connection between the analytical and empirical, universal and historical aspects of the theory studying the socialist system as a real economic entity. János Kornai has built his analysis of the socialist system on the primary role of politics in the creation of economic institutions. In his present work on capitalism he has extended this thesis to the capitalist system. This seems to be an important contribution of his to a new political economy paradigm that is just in the process of formation.

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