This article investigates European Union and International Monetary Fund influence on Hungary's public sector reforms in the period 2004–2013, that is, a time period that saw the initiation of the European Union's Excessive Deficit Procedure (the whole period) and an International Monetary Fund bailout programme (2008–2010). In this case, public sector reforms became derailed from the externally proposed trajectory and took the opposite direction: instead of fostering decentralization of the state administration and deepening the Europeanization process, Hungary's restructuring of the public sector delivered centralization and a ‘power grab’ that eventually impinged on some core values of the European Union ‘constitution’ (the acquis communautaire). This study aims to explain this empirical puzzle by in-depth analysis of how external influence was exerted and became interwoven with dynamically changing domestic factors in circumstances of conditionality. The research is framed by existing policy transfer and public sector reform theories. The article argues that the Hungarian case provides evidence of the unintended consequences of European Union-driven public sector reforms.
As a macroeconomic analyst I have been deeply involved in the research of the economic developments over the past two decades. My research area has been primarily the Hungarian economy, however I studied in depth the regional peers, the Euro-Area, and other global developed and emerging markets. I have witnessed ample evidence forthat the content and the quality of national level policy making has essential influence on the overall economic performance of the individual countries. The qualitative characteristics of economic policies affecting the macro-level and thechange of these policies over time(i.e. fiscal policy in general, and various policy areas, such as tax policy, education policy, health care policy, industrial policyin particular) have been always in the forefront of my professional attention.
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