Hungary

   

Policy Performance

#33

Economic Policies

#38
With an increasingly powerful but unpredictable state, Hungary falls into the bottom ranks (rank 38) internationally with regard to economic policies. Its score on this measure has improved by 0.2 points since 2014.

A 2014 growth surge was largely due to one-time factors. Investment has dropped as the country’s risk premium has risen, and in response to an unstable regulatory and tax environment.

Unemployment rates have dropped to low levels in EU comparison, largely thanks to a public-works program offering unskilled, modestly paid work. Transitions to the regular labor market are rare. A brain drain is causing labor shortages in many fields.

The tax burden has shifted from direct to indirect taxes. Social-insurance contributions remain high. Corporate tax rates have been unstable. The shadow economy is large and growing. Deficits have been kept below 3%, largely through ad-hoc measures rather than structural reforms. Scandals and bankruptcies have exacerbated financial-market uncertainty.

Social Policies

#38
Increasingly reflecting the state’s conservative ideology, Hungary’s social policies place it in the bottom ranks (rank 38) in international comparison. Its score on this measure has improved by 0.1 point relative to 2014.

The state has assumed control of education, with teachers insufficiently loyal to the regime fired. University autonomy has been further undermined, and budgets slashed. Poverty is worsening, and the middle class is being weakened. Roma are deeply marginalized. The government is now blaming migrants for economic woes.

Health care has been undermined by low funding and the absence of a dedicated ministry. Mismanagement, debt and a serious doctor brain drain have led to repeated scandals and controversy. Social policies encourage traditional family models. Child starvation has become a serious political issue.

Pension policy has increased uncertainties regarding old-age income. The government has been openly hostile to refugees; however, migration out of Hungary is a bigger problem.

Environmental Policies

#14
With implementation concerns despite an adequate legal framework, Hungary falls into the upper-middle ranks internationally (rank 14) in the area of environmental policies. Its score on this measure has improved by 0.1 point relative to 2014.

The country has comprehensive environmental laws, strongly influenced by EU policies. However, enforcement has suffered from the country’s tight budgets and a lack of public awareness of the issue. Responsibility for the issue is fragmented among several sub-ministry-level departments, diminishing its priority.

Internationally, the country has stressed its commitment to global efforts and supports EU policy, but does not initiate reforms independently.

Democracy

#41

Quality of Democracy

#41
Having taken large steps back in recent years, Hungary takes the SGI 2016’s lowest spot (rank 41) with regard to democracy quality. Its score on this measure has declined by 0.9 points since 2014.

Electoral procedures have been changed in part to fragment or dilute opposition support. Party-financing rules are very loose, facilitating fraud and potentially even fake government-linked candidates. Access to government information has been made increasingly difficult.

The public media is strongly influenced by the state. While government allies control much of the private media, rifts within the right-wing camp have increased media pluralism. The media-oversight body is composed of government loyalists.

Emergency legislation adopted following the refugee crisis has raised fears of an emerging police state. Discrimination against minorities is widespread. The government has conducted an anti-Islam propaganda strategy. Rapid legal changes have created a chaotic administrative environment, and judicial independence has declined. Corruption is pervasive.

Governance

#38

Executive Capacity

#35
Despite the state’s sweeping consolidation of power, Hungary scores relatively poorly overall (rank 35) with regard to executive capacity. Its score on this issue has declined by 0.1 point relative to 2014.

Prime Minister’s Office resources have steadily grown, but power consolidation has overshadowed strategic planning. Line ministries largely follow orders from above, and are subject to detailed PMO oversight. This top-down policymaking is inefficient, with many decisions remaining unimplemented, disorienting lower administrative ranks.

RIAs are not systematically applied, and quality is poor. The government does not consult closely with independent societal actors. Decreasing communications coherency has reflected cracks in the government camp. Hasty policymaking and frequent changers hamper the achievement of goals. The country has become increasingly internationally isolated.

Institutional reform has centralized power, facilitating patronage and ideologically driven decisions. Municipalities have lost responsibilities, but their remaining tasks are underfunded.

Executive Accountability

#41
With few checks on the powerful prime minister’s power, Hungary takes the SGI 2016’s lowest position (rank 41) with respect to executive accountability. Its score on this measure has declined by 0.5 points relative to 2014.

Citizens’ policy knowledge is on average poor, a consequence of widespread political apathy and propagandistic government-information policies. Media reporting is increasingly polarized and superficial. Some opposition-allied print publications continue to exist, with in-depth coverage often moving online.

Parliamentarians’ resources, particularly among the democratic opposition parties, are not sufficient, and oversight powers are in practice flawed. The audit office has acted relatively independently. The ombudsman has not served as a check on the government.

The government party is centralized, with the opposition fragmented. While largely loyal to the government, some business associations have criticized economic policy. The government has accumulated considerable influence over the NGO sector, while seeking to intimidate its critics.
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