Fordulat és reform

Turn and reform

István Csillag, László Antal, György Matolcsy, Lajos Bokros () and László Lengyel

Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), 2014, vol. LXI, issue 10, 1175-1199

Abstract: The Hungarian economy is heading towards a crisis in the late 1980s. Despite all changes, wastage of resources remains and adjustment to the market fails to emerge. The unchanged structure and errors of economic policy have led in the short term to disequilibria. Only comprehensive, radical socio-economic reform can lead the way out of the crisis, its direction being from an indirect mechanism toward decentralized market socialism. In economic policy, a turn has to be achieved, to break with earlier multiple priorities. Illusions of faster growth, maintained living standards and curbed inflation must give way to immediate structural transformation. Monetary restriction has to be applied (strict regulation of the money supply, limited availability of credit raised by the budget, autonomous central banking policy, reduction of budget subsidies, more efficient management of budget-financed institutions, etc.) A consistent programme must be drawn up to eliminate crisis industries. Large, uneconomical CMEA investment projects must be re-examined. A turn in economic policy can only be achieved by reform of the mechanism. Part of this is to diversify ownership and render it competitive (equal rank for ownership forms, transition into each other, specific harmony between self-government and share property, new regulations for foreign capital participation), and creation of a long-term interest in capital assets. Anti-monopoly measures and consistent bankruptcy procedures are needed to increase the number and autonomy of actors in the market. Tax reform must be implemented even in the short run, to eliminate ad hoc interference and secure neutrality in competition. Social reform must affect the partys role in the economy. It should be made possible for various economic policy platforms and groups to form within the party. The maker of autonomous economic policy should be a responsible, effective government. It is expedient to increase Parliaments role in creating and preserving economic constitutionalism and checking on government. Founding free representatives of interests, with truly voluntary membership, should be enabled, so that various economic interests can appear openly and conflicts be handled. Arbitration forums between interest representers and the government need to be set up. Finally, reform that points the way out of the troubles can be applied only with active social participation. It is vital for the countrys grave economic situation to be made clear to the public, and to have alternative programmes openly compete with each other.

JEL-codes: P21 (search for similar items in EconPapers)
Date: 2014
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