Kühnas , Julia
A icle
G ow h egimes o populis go e nmen s: a compa a i e
s udy on Hunga y and Poland
Eu opean Jou nal o Economics and Economic Policies: In e en ion (EJEEP)
P o ided in Coope a ion wi h:
Edwa d Elga Publishing
Sugges ed Ci a ion: Kühnas , Julia (2024) : G ow h egimes o populis go e nmen s: a compa a i e
s udy on Hunga y and Poland, Eu opean Jou nal o Economics and Economic Policies: In e en ion
(EJEEP), ISSN 2052-7772, Edwa d Elga Publishing, Chel enham, Vol. 21, Iss. 1, pp. 133-150,
h ps://doi.o g/10.4337/ejeep.2023.0104
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G ow h egimes o populis go e nmen s:
a compa a i e s udy on Hunga y and Poland
Julia Kühnas
Be lin School o Economics and Law, Ge many
[email p o ec ed]
This pape aims o con ibu e o he deba e o pos -Keynesian g ow h models and he poli ical econ-
omy o populism by in es iga ing he ela ionship be ween he changes in demand and g ow h
egimes and he poli ics o he igh -wing populis go e nmen s in Poland and Hunga y a e he
Global Financial C isis (GFC). In bo h coun ies, he GFC was a u ning poin , leading o he
eme gence o new economic and poli ical ideas. These p ocesses esul ed in changes in he g ow h
egimes and inc eased he impo ance o he expo sec o .
Keywo ds: g ow h egimes, populism, compa a i e poli ical economics
JEL codes: E12, E65, F40, F43, G01, O57
1 INTRODUCTION
Conside ing he ecen ise o populism wo ldwide, Hunga y and Poland a e wo e y in e -
es ing cases. Since he Global Financial C isis (GFC), a democ a ic and libe al eg ession has
se in his egion, which began wi h he elec ion ic o y o he Hunga ian igh -wing populis
pa y Fidesz in 2010 (Rupnik 2016: 78). In Ap il 2022, a e 12 yea s in go e nmen , Fidesz
was e en able o e ain 53 pe cen o he o es. Despi e a ques ionable elec ion campaign
and a a he un ai ly dis ibu ed elec o al sys em, he clea success shows ha many o e s
we e appa en ly sa is ied wi h he condi ions in he coun y (Tagesschau 2022a). A simila
si ua ion p e ails in Poland, whe e P awo i Sp awiedliwość (PiS) has been in powe since
2015 and was e-elec ed wi h g ea success in 2019 (Ve e 2019).
A e he end o he So ie Union, he wo coun ies implemen ed a se ies o neolibe al
e o ms wi h he goal o success ully in eg a e in o he Wes e n capi alis sys em and ans-
o m in o compe i i e economies in he global ma ke . Pa icula ly impo an in his p o-
cess, and in he esul ing economic sys em, we e he in lows o o eign di ec in es men
(FDI) om he Wes . Howe e , he GFC was a u ning poin , as he absence o hese capi al
in lows highligh ed he weaknesses o his dependen sys em, and new economic and poli-
ical ideas eme ged (Ba be 2015). Fidesz in Hunga y and he PiS in Poland ealigned hei
pa y p og ams owa ds he igh -wing populis spec um and we e able o g asp powe
om he p e iously uling socialis -democ a ic o libe al pa ies (O ens ein/Buga ič
2020: 2). They achie ed g ea success in he 2010 and 2015 elec ions, bene i ing om
a disappoin ed and disillusioned elec o a e in hei espec i e coun ies a e he c isis and
we e able o con ince o e s abou hei new isions o he poli ical, social, and economic
o de (Appel/O ens ein 2018: 29–31).
Resea ch A icle
This is an open access wo k
Recei ed 14 No embe 2022, accep ed 5 May 2023
Eu opean Jou nal o Economics and Economic Policies: In e en ion, Vol. 21 No. 1, 2024, pp. 133–150
Fi s published online: Janua y 2024; doi: 10.4337/ejeep.2023.0104
Jou nal compila ion © 2024 Edwa d Elga Publishing L d
© 2024 The Au ho
Howe e , no only in Cen al and Eas e n Eu ope Coun ies (CEECs), bu in almos all
de eloped capi alis coun ies, he end o inancializa ion had, and s ill has, a - eaching
e ec s. Di e en s a egies ha e eme ged o inc ease agg ega e demand and GDP g ow h
(Hein 2012: ch. 6, 116–120). The GFC igge ed many changes, as es ablished
demand-led g ow h models had p o en o be unsus ainable. In his con ex , his pape
aims o con ibu e o he deba e o pos -Keynesiang ow hmodels(c . Hein 2012;
Hein/Mund 2012; Dünhaup /Hein 2019; Akcay e al. 2022) and he poli ical economy
o populism deba e (c . Rod ik 2021; Gu iey/Papaioannou 2022) by in es iga ing he ela-
ionship be ween he changes in demand and g ow h egimes and he es ablishmen o
igh -wing populis go e nmen s in Poland and Hunga y a e he GFC. In his con ex ,
he pape examines he in luence o he GFC on poli ical and economic decisions in he
wo coun ies. Fo his pu pose, he consequences o he GFC as well as he economic
policies o he wo igh -wing populis pa ies, Fidesz and PiS, and hei in luence on
g ow h egimes a e analyzed. I is also o in e es o examine how he coun ies’demand
and g ow h egimes e ol ed a e he end o he So ie Union un il he GFC in o de o
be e unde s and he e en s ha un olded a e 2009.
The pape p oceeds as ollows. A e a b ie in oduc ion, Sec ion 2 se s ou he heo-
e ical amewo k o he analysis. This is ollowed by a desc ip ion o he e olu ion o he
poli ical economies o Hunga y and Poland om he 1990s o 2008 and he g ow h
egimes o he wo coun ies be ween 2000 and 2008 in Sec ion 3. Sec ion 4 ollows
wi h a desc ip ion o he economic policy si ua ion o he wo coun ies o he pe iod
om 2009 o 2019 combined wi h desc ip i e da a on mone a y, wage, iscal, and
ade policies, as well as an analysis o he implica ions o he g ow h egimes. Sec ion
5 concludes he esul s in he con ex o he analy ical concep s p esen ed in Sec ion 2.
2 THEORETICAL FRAMEWORK: A HYBRID APPROACH
This pape builds on a hyb id compa a i e poli ical economy (CPE) app oach, consis ing o
he pos -Keynesian app oach o demand-side g ow h egimes (c . Hein 2012; Hein/Mund
2012; Dünhaup /Hein 2019; Akcay e al. 2022) and an analysis o he poli ical economy
o populism (Rod ik 2021). The pu pose o his me hodology is o ace he ela ionship
be ween he economic and poli ical de elopmen s in Hunga y and Poland a e he GFC.
An analysis o he coun ies’mac oeconomic policy egimes (c . Hein/Ma schin 2021) is
conduc ed o assess he policies o he igh -wing populis pa ies ha came in o powe in
ha ime and hei impac on he g ow h egimes.
The pos -Keynesian demand and g ow h egime app oach was de eloped as an al e -
na i e o he s a egies o ea lie CPE esea che s like Hall/Soskice (2001), who ocused
hei analyses on he supply side (Bacca o/Pon usson 2016: 180). Howe e , he
demand-side ocused G ow h Model Sys em is be e sui ed o cla i y common ends
like inancializa ion (Ba nes 2015: 549–550). Hein (2012: ch. 6), Dodig e al. (2016),
and Hein/ an T eeck (2010) show in hei wo k how his phenomenon has in luenced
economies and iden i ied he ou main channels: dis ibu ion, in es men , edis ibu ion,
and consump ion, in his ega d. The esul ing edis ibu ion o in es men in he capi al
s ock as well as o income, especially a declining sha e o labo income, has led o he
de elopmen o a ious s a egies o boos agg ega e demand and GDP g ow h. In he
p ocess, ou con as ing models ha e eme ged. As seen in Table 1, in he domes ic
demand-led egime (DDL), domes ic demand d i es g ow h while expo s con ibu e
almos no hing. I p i a e consump ion demand makes he la ges con ibu ion o domes-
ic demand, while ne expo s make a nega i e con ibu ion, hen he egime is de ined as
134 Eu opean Jou nal o Economics and Economic Policies: In e en ion, Vol. 21 No. 1
© 2024 The Au ho Jou nal compila ion © 2024 Edwa d Elga Publishing L d
a deb -led p i a e demand boom (DLPD). In he case ha he expo sec o pa icula ly
d i es g ow h, a dis inc ion is made be ween he wo u he sub ypes o expo -led me -
can ilis egimes (ELM) and weakly expo -led g ow h models (WEL) (Hein 2012: ch. 6,
116–120; Hein/Mund 2012: 43–53; Dünhaup /Hein 2019: 4–5).
The Mac oeconomic Policy Regime Analysis, as conduc ed by Hein/Ma schin (2021),
helps o be e unde s and he impac o speci ic economic policy decisions on g ow h
egimes. I is based on a s anda dized se o indica o s o mone a y, iscal, and wage policies
as well as economic openness. The analysis o he mone a y policy ocuses on he sho - and
long- e m eal in e es a e as well as he di e ence be ween he long- e m eal in e es a e
and he g ow h a e o eal GDP. In he a ea o iscal policy, go e nmen g oss in es men
and he coun e cyclical o cyclical o ien a ion o iscal policy a e iden i ied and analyzed
using s uc u al budge balances and he ou pu gap as a sha e o po en ial GDP. Fo he
de elopmen analysis o wage policy, he g ow h o nominal uni labo cos s is compa ed
wi h he in la ion a e and he de elopmen o he wage sha e is assessed. Finally, by analyz-
ing impo and expo sha es as well as in e na ional p ice and non-p ice compe i i eness,
he openness o he economy can be e alua ed (Hein/Ma schin 2021: 510–511).
To elabo a e on he ela ionship be ween changes in he poli ical sphe e and g ow h
egimes, especially in he imes a e he GFC, he pape d aws on he amewo k o
Rod ik (2021) (Figu e 1). I shows he causal ela ionships and mechanisms h ough
which globaliza ion could suppo he ise o populism. Di e en ypes o globaliza ion
G ow h egimes o populis go e nmen s: a compa a i e s udy on Hunga y and Poland 135
© 2024 The Au ho Jou nal compila ion © 2024 Edwa d Elga Publishing L d
Table 1 Classi ica ion o demand and g ow h egimes
Expo -led me can ilis (ELM) Posi i e inancial balances o he domes ic sec o
Nega i e inancial balances o he ex e nal sec o
Posi i e balance o goods and se ices
Posi i e g ow h con ibu ions o ne expo s
Weakly expo -led (WEL) Posi i e inancial balances o he domes ic sec o
Nega i e inancial balances o he ex e nal sec o
Nega i e g ow h con ibu ions o ne expo s
Posi i e g ow h con ibu ion o domes ic demand
OR
Posi i e inancial balances o he ex e nal sec o s
Nega i e g ow h con ibu ions o ne expo s
Domes ic demand-led (DDL) Posi i e inancial balances o he domes ic sec o
Nega i e inancial balances o he public sec o
Posi i e g ow h con ibu ions o he domes ic demand
Posi i e o nega i e g ow h con ibu ions o he balance
o goods and se ices
Deb -led p i a e demand
boom (DLPD)
Nega i e inancial balances in he p i a e sec o
Posi i e inancial balances o he ex e nal sec o
Posi i e g ow h con ibu ions o la gely c edi - inanced,
domes ic demand (pa icula ly p i a e consump ion)
Nega i e g ow h con ibu ions o he balance o goods
and se ices
Sou ce: Dünhaup /Hein (2019: 4–5).
Posi i e g ow h con ibu ions o he balance o goods
and se ices
Balanced o sligh ly posi i e inancial balances o he
ex e nal sec o
shocks ( ade, inance, o immig a ion) a ec di e en componen s in he sys em.
Rod ik dis inguishes be ween he demand and supply sides o poli ics. Economic dis-
loca ions can di ec ly o indi ec ly lead o changes in indi idual policy p e e ences as
well as pa y pla o ms. In he p ocess, hese globaliza ion shocks o en wo k h ough
cul u e and iden i y (Rod ik 2021: 139–140). Tha he GFC has decisi ely suppo ed
he ecen ise o populism is also shown by Funke e al. (2016). They ci e his o ical
e idence ha he poli ical clima e changes signi ican ly a e inancial c ises and ha
he a - igh especially seems o bene i om his. Pa icula ly a e such c ises, hei
na ionalis o xenophobic he o ic, which di e en ia e be ween he good, common peo-
ple and he es ablished, co up eli es, ends o pe suade o e s (Funke e al. 2016: 2;
Mudde 2007: 23).
This pape ollows he de ini ion o populism by Mudde (2007), who emphasizes
exac ly hese an i-eli is and an i-plu alis componen s o populism. Mo eo e , he
desc ibes i as a ‘ hin-cen e ed ideology’ ha has he ad an age o being e y adap able
and can be mixed wi h ‘ hick’ideologies such as libe alism o socialism (Mudde 2007:
23, Mu o 2017: 10).
3 GROWTH REGIMES OF HUNGARY AND POLAND: 2000–2008
A e he collapse o he socialis sys em, economic and poli ical changes we e ine i able in
Hunga y and Poland. Mos o he esea che s p edic ed ha economic e o ms would espe-
cially gene a e such high ans o ma ion cos s ha hey would be coun e ac ed a he poli ical
and democ a ic le el e y soon (Myan /D ahokoupil 2011: 83; P zewo ski 1991: 136–137;
Sachs/Lip on 1990: 47–48); likewise, in a so-called neolibe al shock he apy, he wo
136 Eu opean Jou nal o Economics and Economic Policies: In e en ion, Vol. 21 No. 1
© 2024 The Au ho Jou nal compila ion © 2024 Edwa d Elga Publishing L d
Globaliza ion shock
Economic disloca ion Cul u e iden i y
Indi idual policy
p e e ences
Elec o al ou comes ( ise o
populism)
Pa y p og ams
Demand side
Supply side
Sou ce: Own p esen a ion based on Rod ik (2021: 140).
Figu e 1 Causal amewo k –globaliza ion shock
coun ies implemen ed as many e o ms as possible in a sho ime (Appel/O ens ein 2018:
1). In his ega d, he Washing on Consensus ins i u ions, IMF and Wo ld Bank, as well as
he Eu opean Union (EU) played a c ucial ole in he ansi ion p ocess o Hunga y and
Poland (Babb 2013: 268; Go e 2000: 790; Appel/O ens ein 2018: 21–23). The e o ms
ocused on s abilizing, libe alizing, and p i a izing he o me communis economies as
well as limi ing go e nmen spending and con olling he g ow h o he money supply
(King/Sznajde Lee 2006: 754). EU membe ship nego ia ions also se in mo ion he de eg-
ula ion and lexibiliza ion o labo ma ke s as well as he p i a iza ion o pension and heal h-
ca e sys ems and s a egically impo an sec o s such as inance o elecommunica ions
(Feldmann 2004: 273; Toplišek 2020: 390–392).
In his p ocess, bo h coun ies became e y popula FDI loca ions (Gün he /K is alo a
2016: 99; Appel/O ens ein 2018: 24). Appel/O ens ein (2018: 25–29) a gue ha he
huge demand o capi al d o e he coun ies o Eas e n Eu ope in o compe i ion wi h
each o he o FDI, causing hem o in oduce mo e and mo e e o ms, some imes
e en going beyond he demands o he IMF, he Wo ld Bank, o he EU.
3.1 Demand and g ow h egime de elopmen : 2000–2008
These abo e-men ioned ci cums ances led o bo h he Hunga ian and he Polish economy
quickly en e ing an upswing a he beginning o he 1990s. F om 1994 onwa ds, Hunga y
was able o eco d posi i e GDP g ow h a es (IMF 2022a), and be ween 2000 and 2008
he Hunga ian economy con inued o g ow by an a e age o 3.5 pe cen (Table 2). The eco -
e y o he Polish economy began in 1992, and he coun y was able o show GDP g ow h
a e aging 4.1 pe cen annually be ween 2000 and 2008 (Dyma ski 2015: 11; IMF
2022b) (Table 2). Labo p oduc i i y inc eased apidly, bu a he same ime he sha e o
wages in GDP dec eased since he 1990s (Ibid.: 12). The impo ance o FDI o he Polish
and Hunga ian economies can be obse ed in he sha e o GDP accoun ed o by ne FDI
lows. In Hunga y i was 5.8 pe cen in 2000 bu ose by 20 pe cen age poin s in he yea
a e he EU accession (Wo ld Bank 2022a). E en hough he pe cen age changes in Polish
ne FDI in lows a e smalle compa ed o ha o Hunga y, a compa ison o he absolu e ig-
u es also shows a signi ican inc ease he e, especially since 2004 (Wo ld Bank 2022b, 2022c).
The ca ego iza ion o he Hunga ian and Polish g ow h egimes is no qui e s aigh -
o wa d, bu despi e he sligh ly nega i e inancial balances o households, bo h can be
classi ied in he g oup o domes ic demand-led coun ies (c . Table 2 and Sec ion 2) in
he obse ed pe iod, as he nega i e inancial balances o he public sec o a e deepe
han he one o he p i a e sec o , sugges ing ha he public sec o was in de ici o
in es men o consump ion and consequen ly mo e impo an . In addi ion, bo h coun-
ies had low household-deb - o-GDP a ios. In Hunga y, he a e age o To al C edi
o Household be ween 2000–2008 was 19.97 pe cen (as a sha e o GDP), while i
was as low as 15.71 pe cen in Poland (BIS 2022). This sugges s ha p i a e deb was
no o g ea impo ance in e ms o economic g ow h, which is why he deb -led p i a e
demand boom egime was excluded. Dodig e al. (2016: 14) also classi y Poland and Hun-
ga y in he g oup o DDL coun ies bu emphasize he mo e dynamic and highe eco-
nomicg ow haswellas hesubs an ial FDI in lows in compa ison o he mo e
ma u ed DDL coun ies like F ance.
The a o able in es men clima e c ea ed by he economic e o ms and he ela i ely
low wages a ac ed many ansna ional companies o Poland and Hunga y and p omo ed
economic g ow h. Howe e , hey did no succeed in c ea ing hei own na ional inno a-
ion sys em. The ansna ional co po a ions and o eign in es o s showed li le in e es in
G ow h egimes o populis go e nmen s: a compa a i e s udy on Hunga y and Poland 137
© 2024 The Au ho Jou nal compila ion © 2024 Edwa d Elga Publishing L d
he social and economic upg ading o he Hunga ian and Polish economies. While he
de elopmen o new echnologies occu ed mainly in o he indus ialized coun ies,
bo h pos -communis economies had o wo k mainly wi h he olde echnologies le o
hem by he o eign in es o s. As a esul , hey became dependen on impo s, especially
in machine y and echnology, om Wes e n Eu opean coun ies (Papa a 2018: 121).
The e o e, he neolibe al ans o ma ion p ocess, combined wi h he pos -communis
low p oduc i i y o he domes ic labo o ce as well as he poo compe i i eness in in e -
na ional compa ison, led o deep cu en accoun de ici s. Economic g ow h was hus
dependen on domes ic demand, which was addi ionally boos ed by he ising disposable
household income (S a is a 2021a, 2021b).
4 GROWTH REGIMES OF HUNGARY AND POLAND: 2009–2019
In many ways, he GFC was a u ning poin o bo h coun ies, leading o he eme gence
o new economic and poli ical ideas (Ba be 2015). The c isis quickly spilled o e due o
he sudden s op o capi al in lows, hi ing Hunga y pa icula ly ha d as he coun y was
hea ily indeb ed in o eign cu ency in he p i a e and he public sec o s (O ens ein/
Buga ič2020: 4). This indeb edness inc eased he ins abili y o he Hunga ian inancial
sys em, leading Hunga y o being no longe able o pay he loans in o eign cu ency
138 Eu opean Jou nal o Economics and Economic Policies: In e en ion, Vol. 21 No. 1
© 2024 The Au ho Jou nal compila ion © 2024 Edwa d Elga Publishing L d
Table 2 G ow h egimes Hunga y and Poland: 2000–2008 and 2009–2019
A e age alues o he espec i e
pe iods Hunga y Poland
2000–2008 2009–2019 2000–2008 2009–2019
Real GDP g ow h (in %) 3.55 1.93 4.14 3.59
G ow h con ibu ion in pe cen o eal GDP
Domes ic demand 2.58 1.40 4.09 2.82
P i a e consump ion 1.22 0.72 2.31 1.79
Public consump ion 0.50 0.34 0.84 0.46
In es men (g oss ixed
capi al o ma ion) 0.86 0.33 0.94 0.57
Ne expo s (balance o goods and
se ices) 0.25 0.38 0.15 0.82
Ne expo s as a pe cen age o GDP −2.81 5.56 −1.82 1.33
Financial balances
Sec o al inancial balance as a sha e o
nominal GDP o he public sec o ,
in %
−6.17 −2.96 −4.17 −3.52
Sec o al inancial balance as a sha e o
nominal GDP o he ex e nal sec-
o , in %
7.49 −1.33 4.56 2.40
Sec o al inancial balance as a sha e o
nominal GDP o he p i a e sec o ,
in %
−1.33 4.29 −0.38 1.12
Regime DDL ELM DDL WEL
Sou ces: Eu opean Commission (2022), Eu os a (2022), IMF (2022), Wo ld Bank (2022), au ho ’s
own calcula ions and p esen a ion.
1
(Badics/Szikszai 2015: 44; Buga ič2019: 610). In con as , Poland did no ace such a
high le el o domes ic deb in o eign cu ency, and inancializa ion was gene ally
acco ded less impo ance in he coun y (Dyma ski 2015: 66–69), which is why he
impac o he c isis on he Polish economy was less se e e (Dodig e al. 2016: 27;
Wo ld Bank 2022d). Ne e heless, GDP g ow h also declined, while unemploymen
a es inc eased, as ading pa ne s s uggled wi h he c isis and FDI in lows d opped
(Wo ld Bank 2022d, 2022 ).
In he elec ions a e he c isis, he igh -wing populis pa ies Fidesz and PiS managed o
g asp powe om he p e iously uling pa ies (Hu hmache 2010: 1; Ma cinkiewicz 2016:
466; Tagesschau 2022a). Many people we e dissa is ied wi h he poli ics o he es ablished
pa ies du ing and a e he c isis (Appel/O ens ein 2018: 29–31). The economic p oblems
igge ed by GFC no only led o discussions in he ield o economic policy, bu also o dis-
pu es in he social and cul u al sphe es. The igh -wing populis pa ies o e ed con incing
al e na i e answe s o he economic and social conce ns o he people (Funke e al. 2016;
Buga ič2019: 610; O ens ein/Buga ič2020: 6) and ma ke ed hemsel es as p o ec o s o
adi ional Wes e n alues (c . cul u al backlash heo y, Ingleha /No is 2016: 2). They p o-
mised o e s economic sel -go e nance and he p o ec ion o he o dina y people and wo ke s
(Buga ič2019: 612; Bluhm/Va ga 2020: 14; O ens ein/Buga ič2020: 6).
4.1 Hunga y and Fidesz
The discon en o he Hunga ian popula ion caused by he GFC, he ensuing ecession, and
he ela ed aus e i y measu es demanded by IMF and EU helped Fidesz in he 2010 elec ion
as pa y leade Vic o O bán blamed hese ins i u ions o Hunga y’s p oblems (O ens ein/
Buga ič2020: 6–7, Johnson/Ba nes 2015: 535). Fidesz eme ged as he clea winne in he
2010 Hunga ian elec ions, ecei ing almos 53 pe cen o he o es, eplacing he Socialis
Pa y (MSZP), which had been in go e nmen o eigh yea s. Acco ding o Hu hmache
(2010: 1), his elec ion undamen ally changed Hunga y’s poli ical landscape. The wo-
hi ds majo i y won by Fidesz enabled hem u he mo e o amend he cons i u ion, lead-
ing o almos unlimi ed powe o he execu i e and es ic ed powe o he Hunga ian
Cons i u ional Cou (Buga ič2019: 602; Szelényi/Csillag 2015: 42).
The heo e ical amewo k o Rod ik (2021) p esen ed in Sec ion 2 can be well applied
he e o Hunga y. The economic p oblems in he coun y ollowing he GFC igge ed he
ise o igh -wing populism in di e en ways (Ibid.). Gyöngyösi/Ve ne (2022) poin o he
impo an ole o he c isis-induced inc ease in household deb in he ise o Hunga ian
populism. They show ha he sha e o o es o ex eme igh -wing pa ies inc eased signi -
ican ly in a eas ha had a high sha e o household o eign cu ency loans in 2008 (Ibid.:
2472). Vik o O bán shi ed Fidesz’s o iginally mode a e p og am u he o he igh ,
winning he 2010 elec ions wi h a populis agenda (Gu iey/Papaioannou 2022: 785).
4.1.1 The economic poli ics o Fidesz since 2010
To dis inguish his economic s a egy om he Wes e n neolibe alism implemen ed ea lie ,
O bán called his app oach ‘eas wind’(O ens ein/Buga ič2020: 7), ocusing on
egaining con ol o e he Hunga ian economy. To his end, sec o al axes we e in o-
duced, and ce ain companies we e na ionalized in sec o s ha we e p e iously mainly
o eign-owned, such as ene gy, elecommunica ions, and he inancial sec o (O ens ein/
Buga ič2020: 7; Bohle/Regan 2021: 91; Toplišek 2020: 395). Howe e , Bohle/Regan
(2021: 91) emphasize he ‘selec i e cha ac e ’o Hunga ian economic na ionalism, as
G ow h egimes o populis go e nmen s: a compa a i e s udy on Hunga y and Poland 139
© 2024 The Au ho Jou nal compila ion © 2024 Edwa d Elga Publishing L d
FDI is s ill e y welcome in ce ain sec o s and a ac ed by gene ous incen i es (Toplišek
2020: 396).
Fidesz managed o ake ad an age o he us a ion o he na ional bou geoisie as well
as o he wo king class and success ully es ablished i sel as he ep esen a i e o bo h (Ban
e al. 2021: 16; Schei ing 2020: 217–260). While hey ensu ed he emancipa ion o he
domes ic capi alis s wi h hei economic na ionalism, hey also allied hemsel es wi h
some ansna ional capi alis s (Schei ing 2020: 330–331; Bohle/Regan 2021: 91). In
e u n, he Hunga ian Chambe o Comme ce signi ican ly assis ed Fidesz in he de elop-
men o hei new economic s a egy (Ban e al. 2021: 16–19).
To u he limi he powe o in e na ional companies and o ganiza ions, ‘nea - o-Fidesz
compan[ies]’(Ko nai 2015: 38) we e es ablished by eplacing he o me owne s wi h pa y
suppo e s. Inc easingly, all public ins i u ions, as well as a g owing pa o he economy,
ha e come unde he con ol o he s a e (Fab y 2019: 135–136). O bán’s go e nmen
has also in oduced uno hodox and na ional measu es o con ol go e nmen de ici s
and deb , educing he in luence o in e na ional ins i u ions (Johnson/Ba nes 2015:
535). In addi ion, Fidesz uses i s social policies o suppo i s conse a i e na ionalis ideol-
ogy. The O bán go e nmen c ea ed se e al inancial incen i es o la ge wo king amilies o
inc ease Hunga ian bi h a es (O ens ein/Buga ič2020: 8; Fab y 2019: 135). While he
minimum wage has been signi ican ly inc eased (Toplišek 2020: 395–396), a new labo
law allows mo e lexibili y and de egula ion in labo ela ions and es ic s he igh o s ike.
Suppo o he unemployed and poo is e y low and based on a puni i e and exploi a i e
wo k a e p og am (Fab y 2019: 135–136).
4.1.2 Mac oeconomic policies egime analysis
To assess he impac o he policy change on he Hunga ian g ow h sys em, he coun y’s
mac oeconomic policy egime is now analyzed. Following he example o Hein/Ma schin
(2021), mone a y, wage, and iscal policies as well as he openness o he economy i sel
a e examined in mo e de ail o ha pu pose. The da a in Tables 3 and 4 indica es signi ican
changes in Hunga y in his espec om 2009 o 2019 compa ed o he p e ious decade.
Simila o he Eu opean Cen al Bank (ECB), he Hunga ian Na ional Bank’s aim is
p ice s abili y, o which i uses in la ion a ge ing since 2001 o achie e i (MNB 2022).
Mone a y policy changed om being expansiona y in 2000–2008 o con ac iona y in
2009–2019, wi h a posi i e di e ence be ween he long- e m in e es a e and eal
GDP g ow h. Howe e , since 2013, he p e ious Minis e o Na ional Economy, Gyö gy
Ma olcsy, has been pu suing a loose mone a y policy o s imula e he economy and p o-
mo e lending. Fo his pu pose, he key in e es a e was g adually lowe ed om 7 pe cen
o 1 pe cen in 2016 (Toplišek 2020: 395) so ha mone a y policy appea s o e u n o
he expansiona y s ance. Fu he mo e, he cen al bank has placed a g ea e ocus on he
o ganiza ion o he di e en b anches o economic policy o imp o e he coo dina ion o
mone a y and iscal policy, lowe he ex e nal ulne abili y o he coun y, and c ea e
g ow h-enhancing c edi s (Palo ai 2021: 464).
In la ion was educed and has mo ed close o he a ge o 3 pe cen (MNB 2022).
Howe e , he decline in he in la ion a e wen hand in hand wi h a dec ease in he labo
income sha e. While i inc eased in compa ison o he pe iod be ween 2000 and 2008, i
ell on a e age o 46 pe cen be ween 2009 and 2019 (Tables 3 and 4). Due o he
nume ous s uc u al e o ms in he labo ma ke , wage policy changed om being
mo e expansiona y o con ac iona y and became de la iona y: he nominal g ow h o
uni labo cos s was nega i e (Tables 3 and 4).
140 Eu opean Jou nal o Economics and Economic Policies: In e en ion, Vol. 21 No. 1
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