Unintended outcomes effects of the European Union and the International Monetary Fund on Hungary's public sector and administrative reforms

Abstract

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.

The role of EU funding in EU member states: building administrative capacity to advance administrative reforms

“…On the other hand, changes of government and shifts in political and policy priorities disrupted the implementation process and added pressures on existing administrative capacities. This finding is in line with previous research that found that political factors weakened administrative capacities (Chardas, 2012; Hagemann, 2019) and acted as a barrier to organisational change, thus sometimes leading to the reversal of reform efforts, particularly in CEE countries (Common and Gheorghe, 2019; Török, 2020). However, our research added more empirical support to the scarce evidence that political factors can both accelerate and slow down the management of external aid (Surubaru, 2017) by determining the key mechanisms behind this mixed influence.…”

“…Building adequate levels of administrative capacity and sustaining reform efforts over a longer period was found necessary to improve the success of implementing NPM instruments in CEE countries (Dan and Pollitt, 2015, see also Asatryan et al. , 2017; Common and Gheorghe, 2019; Török, 2020). For instance, a combination of the limited capacity of private sector organisations and insufficient organisational maturity in the beneficiary organisations constrained the effective implementation of EU-funded capacity-building interventions (especially the development of IT-based management systems) in Lithuania (Nakrošis, 2014).…”

“…Furthermore, EU conditionality was found to provide a window of opportunity and legitimacy for furthering national administrative reform (MacCarthaigh and Hardiman, 2020). At the same time, it was recognised that the EU's influence can result in unintended consequences that go against its original intent (Török, 2020). However, other studies have revealed only weak links or even no links at all between a significant amount of EU support used for upgrading the governance capacity of individual countries, on the one hand, and the performance of their public administrations, on the other hand (Chardas, 2012; Featherstone, 2015; Hajnal et al.…”

Comparative Analysis of Evidence-Based Policies in the Era of Digitalisation

“…E-government development and digitalisation is only a part of public administration reforms. The application of new methodologies like big data analysis (for example, at the examination of criminal activity during the Boston Marathon 39 ), and experimental research methods in policy-making processes also offer good results.…”

Understanding Large Scale Policy Change National Policy Reform Under External Constraints - The Case of Hungary

“…Therefore, Hungary arguably constitutes the case of a significant tax policy change. 89 East Central European region is understood here as the ex-Communist countries without ex-also had the task to audit the development of the program, but the programs content and its implementation was fully the responsibility of the member state (Török, 2019).…”