The emergence of patronage state in Central Europe: The case of FDI - relate d policies in Hungary

Szanyi, Miklós (2016) The emergence of patronage state in Central Europe: The case of FDI - relate d policies in Hungary. Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences, Budapest. ISBN 978-963-301-633-6

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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 th e 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 patrioti sm. 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 t herefore not regarded as tools of economic patriotism but rather of state clientism, or a departure from competition state towards patronage state.

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