One of the main problems of the Eurozone is the growing and considerable split between vulnerable... more One of the main problems of the Eurozone is the growing and considerable split between vulnerable and resilient member countries. The split pre-existed the crisis, but it was the institutional and policy incompleteness of the Eurozone and the management of the crisis that made the split evident and potentially dangerous for the monetary union. The European Union is gaining time by increasing the use of flexibility that exists in the treaties and pacts and coupling it with the supportive ECB attitude and action. However, it is difficult to see how the monetary union can continue in the long run by imposing unreasonable costs to and causing prolonged economic decline of vulnerable countries and if some of its member countries are unable or unwilling to implement the necessary reforms. External and internal events added a significant economic and financial danger to European integration, and an even greater institutional and political threat. The paper analyzes the causes and consequences of the division between resilient and vulnerable countries. The paper concludes that the EU and its member countries should pragmatically revise and relaunch the process of European integration and suggests important steps in this direction.
Viktor Orbán's regime in Hungary is a prime example of authoritarian populism in a relatively dev... more Viktor Orbán's regime in Hungary is a prime example of authoritarian populism in a relatively developed country that has been part of the European Union since 2004. The paper argues that in response to the pandemic, the Orbán government pursued a set of selectively voluntarist policies that have been informed by an ultra-orthodox, state-centered worldview that sought to minimize the regime's democratic accountability and to reduce the counter-mobilization ability of the opposition. These policies had been associated with comparatively low infection and death rates in the first wave of the pandemic, hence enabling high approval ratings for the government despite generating considerable human and economic costs. In light of rising infection and death rates from September 2020, however, it is yet to be seen whether the COVID-19 crisis, in balance, will reinforce or undermine popular support to the regime.
We compare the pre- and post-2010 Hungarian political regimes through the lens of pension policie... more We compare the pre- and post-2010 Hungarian political regimes through the lens of pension policies. We label the pre-2010 regime as democratic populist because it was characterized by fiscally irresponsible policies, yet it maintained the system of checks and balances and the rule of law. In contrast, we call the post-2010 regime authoritarian populist as it has employed authoritarian political techniques while maintained popular legitimation through regular elections. To substantiate the difference between the two periods from an economic viewpoint, we compare pre- and post-2010 pension policies to find important differences as well as surprising similarities. In particular, we analysed the following five policy aspects: (a) reform and partial privatization of the government-run pension system, (b) policies on the statutory (normal) and the effective (average) pension age, (c) indexation, (d) progression in benefits calculations and progressivity in the personal income tax, and (e)...
Our paper explores how populist radical right-wing forces re-interpret religion, and re-frame Chr... more Our paper explores how populist radical right-wing forces re-interpret religion, and re-frame Christianity in a non-universalistic, nationalist way to legitimize their rule in Hungary. Populism is considered as an anti-elitist, anti-institutional political behavior that identifies with 'the people', and enhances their 'direct' participation in the political process as opposed to representative government. Populism has an ideological character but in itself does not have a particular ideological content. As a form of government it is based on popular participation with limited public contest for power. Although neither Fidesz nor Jobbik appeared before the electorate as a deeply religious political party, both of them have portrayed themselves as socially conservative, 'Christian' nationalists. This implied a form of institutionalized cooperation between them and the large historical Christian churches. The Orbán regime demonstrates that radical right-wing populism employs a quasi-religious ideological construction through which it attempts to mobilize a wider social spectrum: ethnonationalism. This surrogate religion offers a nationalist and paganized understanding of Christianity and elevates the concept of ethnically defined nation to a sacred status.
Based on the theory of transaction cost economics, the paper argues that by vertically organizing... more Based on the theory of transaction cost economics, the paper argues that by vertically organizing political exchange, populist regimes reduce market-type political transaction costs-bargaining, enforcement and information costs-of democracy. However, management-type political transaction costs-organizational costs, partly stemming from corruption-rise as populists in power leverage government control through hierarchically organized clienteles. Transaction cost economics suggest that a shift from democratic towards authoritarian populist regimes occurs when formal and informal political institutions prove unable to maintain horizontal political exchange, and demand for increased government discretion grows. This is demonstrated on Viktor Orbán's authoritarian populist regime in Hungary.
This paper conceptualizes authoritarian populism in an institutional economics context. Examining... more This paper conceptualizes authoritarian populism in an institutional economics context. Examining the literature on populism in political science, it considers authoritarian populism a degraded form of democracy that holds elections in regular intervals as means of popular legitimation, but undermines pluralism and constrains political choice. Based on the theory of transaction cost economics, the paper argues that authoritarian populism reduces political transaction costs by vertically organizing political exchange instead of the horizontal organization characteristic of liberal democracy. Electoral demand for such a shift rises at times of crises and a mismatch between formal and informal political institutions. This is what happened in Hungary towards the end of the 2000s, in a period of socially costly fiscal stabilization and the troubles of the global financial crisis. Correspondingly, voters have given Prime Minister OrbAin strong mandates to govern at three consecutive elect...
This paper conceptualizes populism in an institutional economics context. Examining the literatur... more This paper conceptualizes populism in an institutional economics context. Examining the literature on populism in political science, it subscribes to the view that populism is a degraded form of democracy that holds elections in regular intervals as rituals of popular legitimation, but undermines pluralism and diminishes effective political choice. Based on the theory of transaction cost economics, the paper argues that populism is a form of government that reduces political uncertainties inherently present in liberal democracies, and hence mitigates political transaction costs. At times of crises and a mismatch between formal and informal institutions conditioning political exchange, demand for such a restricted form of democracy rises. This is what happened in Hungary towards the end of the 2000s, in a period characterized by fiscal stabilization and the socially costly impact of the global financial crisis.
Transition and beyond-an edited volume dedicated to D. Mario Nuti for his 70 th birthday-contains... more Transition and beyond-an edited volume dedicated to D. Mario Nuti for his 70 th birthday-contains economic essays on the course of post-communist transition, written in the context of a broad range of intellectual traditions. The first part of the volume,
This paper conceptualizes authoritarian populism in an institutional economics context. Examining... more This paper conceptualizes authoritarian populism in an institutional economics context. Examining the literature on populism in political science, it considers authoritarian populism a degraded form of democracy that holds elections in regular intervals as means of popular legitimation, but undermines pluralism and constrains political choice. Based on the theory of transaction cost economics, the paper argues that authoritarian populism reduces political transaction costs by vertically organizing political exchange instead of the horizontal organization characteristic of liberal democracy. Electoral demand for such a shift rises at times of crises and a mismatch between formal and informal political institutions. This is what happened in Hungary towards the end of the 2000s, in a period of socially costly fiscal stabilization and the troubles of the global financial crisis. Correspondingly, voters have given Prime Minister Orban strong mandates to govern at three consecutive electi...
Centre For the Study of Economic and Social Change in Europe Ssees Ucl London Uk, 2004
The paper examines state characteristics and their policy implications in five Central European p... more The paper examines state characteristics and their policy implications in five Central European post-communist countries. It argues that policies on macroeconomic stabilisation, privatisation and FDI had been shaped by state-society relations, which, in turn, had been affected by policy outcomes. Curiously, though, whereas structural and institutional developments exhibited a great deal of path-dependency in some countries, in others significant policy shifts took place. The conceptual tools of state capacity and autonomy are used to describe both dynamics, as well as to explain the spectacular variation in the role of FDI across the region.
Paper presented at the Second EPIC Workshop in …, 2002
... No. 63. Hamar, Judit. 2002. FDI and Industrial Networks in Hungary. ... No. 1, pp. 27-54. P... more ... No. 63. Hamar, Judit. 2002. FDI and Industrial Networks in Hungary. ... No. 1, pp. 27-54. Pitti, Zoltán. 2001. A külföldi tőke szerepe a hazai gazdaság új növekedési pályára állításában (The role of foreign capital in placing the dosmetic economy on a new growth trajectory). ...
Research on populism has gained importance in the light of the recent global populist surge. Poli... more Research on populism has gained importance in the light of the recent global populist surge. Political scientists have become concerned with the problem of authoritarian populism, examining how illiberal, anti-pluralist populist parties have degraded liberal democracies. Economic research on recent forms of populism, although also growing, lack a comprehensive conceptual approach. This paper reduces this gap by conceptualizing authoritarian populism in terms of political transaction costs, arguing that its primary function is to vertically integrate political exchange under conditions of general franchise. If successful, authoritarian populist regimes internalize a large share of political transaction costs inherent in decentralized democratic political exchange. This entails a degraded version of democracy, eliminating a significant part of substantial electoral choice. Through weakening impersonal collective political contracting, authoritarian populists bring back private politic...
A tanulmány a huszadik század második felének latin-amerikai és kelet-ázsiai gazdaságfejlődését e... more A tanulmány a huszadik század második felének latin-amerikai és kelet-ázsiai gazdaságfejlődését elemezve felhívja a figyelmet az állami szerepvállalás jelentőségére a gazdasági fejlődés előmozdításában. A fejlesztő államon alapuló kelet-ázsiai modell sikere és a latin-amerikai fejlődés kudarcai egyaránt arra utalnak, hogy a világgazdasági felzárkózás egyik legfontosabb feltétele egy megfelelő bürokratikus képességekkel és integritással rendelkező államapparátus jelenléte. Ugyanakkor a fejlesztő állam által alkalmazott intervencionista gazdaságpolitikára ma már nem csak a külső adottságok megváltozása miatt nincs mód, hanem a fejlődés sajátos dinamikája miatt sem: az egyik leglátványosabb fejlesztéspolitikai sikert elérő Dél-Koreában az önálló világpiaci szereplővé vált óriásvállalatok függetlenedési törekvései és a liberális demokrácia növekvő társadalmi támogatottsága egyaránt hozzájárultak a fejlesztő állam hagyományos intézményrendszerének lebomlásához. A gazdasági fejlődés előmozdításában azonban-különösen a technológiai fejlődés, a foglalkoztatásbővítés és az esélykiegyenlítés területén-ma is nélkülözhetetlen szerepet játszik az állami gazdaságkoordináció.
The paper examines development of state capacities and autonomy in East Central Europe during tra... more The paper examines development of state capacities and autonomy in East Central Europe during transition, and attempts to establish a relation between state characteristics and trajectories of economic transformation, especially with regard to privatisation and FDI. The assertion is that the quality of state capacities and the degree of state autonomy, although changing over time, mutually reinforces the formulating of economic policies, and hence in structural transformation. Thus, state characteristics are important determinants of transition outcome, but are themselves affected by structural economic changes.
One of the main problems of the Eurozone is the growing and considerable split between vulnerable... more One of the main problems of the Eurozone is the growing and considerable split between vulnerable and resilient member countries. The split pre-existed the crisis, but it was the institutional and policy incompleteness of the Eurozone and the management of the crisis that made the split evident and potentially dangerous for the monetary union. The European Union is gaining time by increasing the use of flexibility that exists in the treaties and pacts and coupling it with the supportive ECB attitude and action. However, it is difficult to see how the monetary union can continue in the long run by imposing unreasonable costs to and causing prolonged economic decline of vulnerable countries and if some of its member countries are unable or unwilling to implement the necessary reforms. External and internal events added a significant economic and financial danger to European integration, and an even greater institutional and political threat. The paper analyzes the causes and consequences of the division between resilient and vulnerable countries. The paper concludes that the EU and its member countries should pragmatically revise and relaunch the process of European integration and suggests important steps in this direction.
Viktor Orbán's regime in Hungary is a prime example of authoritarian populism in a relatively dev... more Viktor Orbán's regime in Hungary is a prime example of authoritarian populism in a relatively developed country that has been part of the European Union since 2004. The paper argues that in response to the pandemic, the Orbán government pursued a set of selectively voluntarist policies that have been informed by an ultra-orthodox, state-centered worldview that sought to minimize the regime's democratic accountability and to reduce the counter-mobilization ability of the opposition. These policies had been associated with comparatively low infection and death rates in the first wave of the pandemic, hence enabling high approval ratings for the government despite generating considerable human and economic costs. In light of rising infection and death rates from September 2020, however, it is yet to be seen whether the COVID-19 crisis, in balance, will reinforce or undermine popular support to the regime.
We compare the pre- and post-2010 Hungarian political regimes through the lens of pension policie... more We compare the pre- and post-2010 Hungarian political regimes through the lens of pension policies. We label the pre-2010 regime as democratic populist because it was characterized by fiscally irresponsible policies, yet it maintained the system of checks and balances and the rule of law. In contrast, we call the post-2010 regime authoritarian populist as it has employed authoritarian political techniques while maintained popular legitimation through regular elections. To substantiate the difference between the two periods from an economic viewpoint, we compare pre- and post-2010 pension policies to find important differences as well as surprising similarities. In particular, we analysed the following five policy aspects: (a) reform and partial privatization of the government-run pension system, (b) policies on the statutory (normal) and the effective (average) pension age, (c) indexation, (d) progression in benefits calculations and progressivity in the personal income tax, and (e)...
Our paper explores how populist radical right-wing forces re-interpret religion, and re-frame Chr... more Our paper explores how populist radical right-wing forces re-interpret religion, and re-frame Christianity in a non-universalistic, nationalist way to legitimize their rule in Hungary. Populism is considered as an anti-elitist, anti-institutional political behavior that identifies with 'the people', and enhances their 'direct' participation in the political process as opposed to representative government. Populism has an ideological character but in itself does not have a particular ideological content. As a form of government it is based on popular participation with limited public contest for power. Although neither Fidesz nor Jobbik appeared before the electorate as a deeply religious political party, both of them have portrayed themselves as socially conservative, 'Christian' nationalists. This implied a form of institutionalized cooperation between them and the large historical Christian churches. The Orbán regime demonstrates that radical right-wing populism employs a quasi-religious ideological construction through which it attempts to mobilize a wider social spectrum: ethnonationalism. This surrogate religion offers a nationalist and paganized understanding of Christianity and elevates the concept of ethnically defined nation to a sacred status.
Based on the theory of transaction cost economics, the paper argues that by vertically organizing... more Based on the theory of transaction cost economics, the paper argues that by vertically organizing political exchange, populist regimes reduce market-type political transaction costs-bargaining, enforcement and information costs-of democracy. However, management-type political transaction costs-organizational costs, partly stemming from corruption-rise as populists in power leverage government control through hierarchically organized clienteles. Transaction cost economics suggest that a shift from democratic towards authoritarian populist regimes occurs when formal and informal political institutions prove unable to maintain horizontal political exchange, and demand for increased government discretion grows. This is demonstrated on Viktor Orbán's authoritarian populist regime in Hungary.
This paper conceptualizes authoritarian populism in an institutional economics context. Examining... more This paper conceptualizes authoritarian populism in an institutional economics context. Examining the literature on populism in political science, it considers authoritarian populism a degraded form of democracy that holds elections in regular intervals as means of popular legitimation, but undermines pluralism and constrains political choice. Based on the theory of transaction cost economics, the paper argues that authoritarian populism reduces political transaction costs by vertically organizing political exchange instead of the horizontal organization characteristic of liberal democracy. Electoral demand for such a shift rises at times of crises and a mismatch between formal and informal political institutions. This is what happened in Hungary towards the end of the 2000s, in a period of socially costly fiscal stabilization and the troubles of the global financial crisis. Correspondingly, voters have given Prime Minister OrbAin strong mandates to govern at three consecutive elect...
This paper conceptualizes populism in an institutional economics context. Examining the literatur... more This paper conceptualizes populism in an institutional economics context. Examining the literature on populism in political science, it subscribes to the view that populism is a degraded form of democracy that holds elections in regular intervals as rituals of popular legitimation, but undermines pluralism and diminishes effective political choice. Based on the theory of transaction cost economics, the paper argues that populism is a form of government that reduces political uncertainties inherently present in liberal democracies, and hence mitigates political transaction costs. At times of crises and a mismatch between formal and informal institutions conditioning political exchange, demand for such a restricted form of democracy rises. This is what happened in Hungary towards the end of the 2000s, in a period characterized by fiscal stabilization and the socially costly impact of the global financial crisis.
Transition and beyond-an edited volume dedicated to D. Mario Nuti for his 70 th birthday-contains... more Transition and beyond-an edited volume dedicated to D. Mario Nuti for his 70 th birthday-contains economic essays on the course of post-communist transition, written in the context of a broad range of intellectual traditions. The first part of the volume,
This paper conceptualizes authoritarian populism in an institutional economics context. Examining... more This paper conceptualizes authoritarian populism in an institutional economics context. Examining the literature on populism in political science, it considers authoritarian populism a degraded form of democracy that holds elections in regular intervals as means of popular legitimation, but undermines pluralism and constrains political choice. Based on the theory of transaction cost economics, the paper argues that authoritarian populism reduces political transaction costs by vertically organizing political exchange instead of the horizontal organization characteristic of liberal democracy. Electoral demand for such a shift rises at times of crises and a mismatch between formal and informal political institutions. This is what happened in Hungary towards the end of the 2000s, in a period of socially costly fiscal stabilization and the troubles of the global financial crisis. Correspondingly, voters have given Prime Minister Orban strong mandates to govern at three consecutive electi...
Centre For the Study of Economic and Social Change in Europe Ssees Ucl London Uk, 2004
The paper examines state characteristics and their policy implications in five Central European p... more The paper examines state characteristics and their policy implications in five Central European post-communist countries. It argues that policies on macroeconomic stabilisation, privatisation and FDI had been shaped by state-society relations, which, in turn, had been affected by policy outcomes. Curiously, though, whereas structural and institutional developments exhibited a great deal of path-dependency in some countries, in others significant policy shifts took place. The conceptual tools of state capacity and autonomy are used to describe both dynamics, as well as to explain the spectacular variation in the role of FDI across the region.
Paper presented at the Second EPIC Workshop in …, 2002
... No. 63. Hamar, Judit. 2002. FDI and Industrial Networks in Hungary. ... No. 1, pp. 27-54. P... more ... No. 63. Hamar, Judit. 2002. FDI and Industrial Networks in Hungary. ... No. 1, pp. 27-54. Pitti, Zoltán. 2001. A külföldi tőke szerepe a hazai gazdaság új növekedési pályára állításában (The role of foreign capital in placing the dosmetic economy on a new growth trajectory). ...
Research on populism has gained importance in the light of the recent global populist surge. Poli... more Research on populism has gained importance in the light of the recent global populist surge. Political scientists have become concerned with the problem of authoritarian populism, examining how illiberal, anti-pluralist populist parties have degraded liberal democracies. Economic research on recent forms of populism, although also growing, lack a comprehensive conceptual approach. This paper reduces this gap by conceptualizing authoritarian populism in terms of political transaction costs, arguing that its primary function is to vertically integrate political exchange under conditions of general franchise. If successful, authoritarian populist regimes internalize a large share of political transaction costs inherent in decentralized democratic political exchange. This entails a degraded version of democracy, eliminating a significant part of substantial electoral choice. Through weakening impersonal collective political contracting, authoritarian populists bring back private politic...
A tanulmány a huszadik század második felének latin-amerikai és kelet-ázsiai gazdaságfejlődését e... more A tanulmány a huszadik század második felének latin-amerikai és kelet-ázsiai gazdaságfejlődését elemezve felhívja a figyelmet az állami szerepvállalás jelentőségére a gazdasági fejlődés előmozdításában. A fejlesztő államon alapuló kelet-ázsiai modell sikere és a latin-amerikai fejlődés kudarcai egyaránt arra utalnak, hogy a világgazdasági felzárkózás egyik legfontosabb feltétele egy megfelelő bürokratikus képességekkel és integritással rendelkező államapparátus jelenléte. Ugyanakkor a fejlesztő állam által alkalmazott intervencionista gazdaságpolitikára ma már nem csak a külső adottságok megváltozása miatt nincs mód, hanem a fejlődés sajátos dinamikája miatt sem: az egyik leglátványosabb fejlesztéspolitikai sikert elérő Dél-Koreában az önálló világpiaci szereplővé vált óriásvállalatok függetlenedési törekvései és a liberális demokrácia növekvő társadalmi támogatottsága egyaránt hozzájárultak a fejlesztő állam hagyományos intézményrendszerének lebomlásához. A gazdasági fejlődés előmozdításában azonban-különösen a technológiai fejlődés, a foglalkoztatásbővítés és az esélykiegyenlítés területén-ma is nélkülözhetetlen szerepet játszik az állami gazdaságkoordináció.
The paper examines development of state capacities and autonomy in East Central Europe during tra... more The paper examines development of state capacities and autonomy in East Central Europe during transition, and attempts to establish a relation between state characteristics and trajectories of economic transformation, especially with regard to privatisation and FDI. The assertion is that the quality of state capacities and the degree of state autonomy, although changing over time, mutually reinforces the formulating of economic policies, and hence in structural transformation. Thus, state characteristics are important determinants of transition outcome, but are themselves affected by structural economic changes.
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Papers by Zoltan Adam