State Capitalism in Poland and Hungary

Abstract

We discuss the emerging economic systems of Poland and Hungary using the state capitalism approach and suggest some general lessons. We define state capitalism in the broad and narrow senses and propose six major manifestations of state capitalism of the populist variety, and five major state capitalism tools. Applying this framework to the post-Soviet, transition economies context, we discuss the origins of state capitalism formation in Poland and Hungary. We focus on specific features of the populist variety of state capitalism in these countries, including the relative importance of political capitalism, oligarchy, and the use of state-owned enterprises (SOEs) as the source of rents, as well as the varieties of state control over the enterprise sector. We point out that the specific economic policies implemented in the two countries are conditioned by the past. We also underline the discrepancy between the features resulting from post-communist path dependence and the contemporary influences, mainly related to the membership of both countries in the EU.

Authoritarian Populism in Comparative Perspective

“…Yet the microeconomic features of a power entrenchment scenario, something that Dornbush and Edwards (1989) did not pay sufficient attention to, are shared, and so is clientelism. The main characteristics of the populist programmes in Hungary and Poland are explained below, based on the account presented by Bałtowski, Kozarzewski and Mickiewicz (2020), who propose six major features of the populist political strategy in the two countries.…”

“…For Bałtowski et al (2020), the analysis needs to start with an investigation of the populist project's beneficiaries. What is characteristic of those projects is not just the extent of government intervention, which can be fairly wide in stable democracies of developed economies as well, but the unsystematic character of the intervention, the fact that it is not rule-based, and has a clientelist flavour.…”

“…This is a strong effect that locks in support. Bałtowski et al (2020) proceed to present the following six features of the economic aspects and the main beneficiaries of the populist programme in Central Eastern Europe.…”