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The emergence of patronage state in Central Europe. The case of FDI-related policies in Hungary

Miklos Szanyi ()
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Miklos Szanyi: Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences

No 222, IWE Working Papers from Institute for World Economics - Centre for Economic and Regional Studies

Abstract: Despite of profound development success of Central European economies of the past 25 years Hungarian and Polish governments have started openly query the applicability of various elements of the “competition state”. They took measures to curtail the activity of multinational firms that have played important role in the successful modernization process of the region. The paper makes an attempt to explain the rationale of this policy using political economy approach. It defines economic policy changes as shifts in the power relations of national elites. It is highlighted that the selective advantage and punishment measures taken are labelled economic patriotism. Yet, economic patriotism is interpreted in this paper as the application of covert discrimination policies applied for the benefit of spatially defined interest groups. The discussed policies are targeted rather at closely defined companies. They are therefore not regarded as tools of economic patriotism but rather of state clientism, or a departure from competition state towards patronage state.

Keywords: multinational companies; economic patriotism; elites; patronage state (search for similar items in EconPapers)
JEL-codes: D72 H82 P16 P31 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2016-08
New Economics Papers: this item is included in nep-pol and nep-tra
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