Distortions in the Functional Structure of the Economy (A Retrospective View of the Recent Past)

Abstract

The study seeks an explanation for the years of stagnation of the Hungarian economy, and the question of what mechanisms, consistency disorders, and behavioral patterns led to the “engine of the economy” choking. On the one hand, our economy differs from the economic policy principles and practices of the countries of the region. Government intervention is common in making many economic decisions, a high degree of centralization of resources and decision-making powers, special taxation of certain sectors without rational explanation, government favoritism of certain corporate groups, their withdrawal from the scope of market control, a high degree of lack of responsibility in the decision-making and management system, and the unaccountability of the most obvious economic crimes. On the other hand, the stagnation is due to economic governance errors, persistent laxity and lack of discipline in budget management, frequent changes to the budget within a year, chronic deficits exceeding the planned ones, and the continuous indebtedness of the state.