Rules for sale: autocratic forbearance, as a new industrial policy tool to promote the Hungarian battery hub

Ricz, Judit and Éltető, Andrea (2026) Rules for sale: autocratic forbearance, as a new industrial policy tool to promote the Hungarian battery hub. JOURNAL OF ECONOMIC POLICY REFORM, 29 (3). pp. 238-266. ISSN 1748-7870

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Abstract

New industrial policy has (re-)gained legitimacy in scholarly debates recently, as a means to boost and direct development. This article argues that autocratic leaders may exploit this policy to strengthen their domestic and international power position. By combining international and comparative political economy perspectives, we analyse the main logic, instruments, and limits of the Hungarian government’s new industrial policy to promote the electric vehicle battery sector. The case study illustrates how the Orbán regime manipulated the institutional and regulatory setting and applied selective (non-)enforcement of regulations – theorised as autocratic forbearance – to create locational advantages for Asian battery firms.

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