Grants, sovereign loans and the appraisal of corridor investment: Transport infrastructure development in Hungary, 2010–2026

Zsótér, Brigitta Tünde and Nagy, Gábor Dániel (2026) Grants, sovereign loans and the appraisal of corridor investment: Transport infrastructure development in Hungary, 2010–2026. Transport Economics and Management (4). pp. 386-399. ISSN 2949-8996

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Abstract

In this article, we examine how a small European Union member state has used transport infrastructure investment to reposition itself within European and Eurasian trade and production networks. Drawing on a qualitative case study of Hungary between 2010 and 2026, we combine documentary analysis of a structured corpus of official sources, process tracing with explicit evidentiary tests, and descriptive investment data to reconstruct the investment logic underlying three interlocking programmes: the externally financed reconstruction of the Budapest–Belgrade railway; the coupling of long-distance logistics corridors with record inflows of electric-vehicle and battery manufacturing investment; and the systematic extension of motorway and railway capacity towards national borders. We show that Hungarian transport policy during this period was optimized not primarily according to conventional welfare-economic appraisal criteria, but as a connectivity strategy intended to position the country as an interoperability hub between Asian, EU, and macroregional circuits of trade and capital. We test this strategic interpretation against the rival explanation that the investment pattern emerged from fragmented, domestically driven decisions that were rationalized only retrospectively. We conceptualize this pattern as a small-state corridor strategy: the deliberate allocation of corridor projects across parallel financing channels (EU cohesion and Connecting Europe Facility grants, the national budget, and non-EU sovereign credit), each governed by a distinct institutional regime, to purchase connectivity optionality. Throughout, we distinguish between documented policy intent, strategic complementarity, and causal effect, and show that 2010–2026 constitutes a completed construction phase rather than an assessable outcome cycle. Our findings extend the transport economics literature on corridor investment to the demand side of externally financed corridor development, and we identify implications for project appraisal, financing governance, and connectivity policy.

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