Hungary

   

Policy Performance

#34

Economic Policies

#37
With a powerful state focused on “re-nationalization” of the economy, Hungary falls into the bottom ranks (rank 37) internationally with regard to economic policies. Its score on this measure has improved by 0.6 points since 2014.

Real GDP growth slowed from 3.1% in 2015 to 1.9% in 2016, largely due to declining EU investment. Growth is primarily driven by large construction projects. Deficits are moderate but beginning to rise, and debt levels remain relatively high.

Unemployment rates have dropped significantly, in large part due to a massive public-works program providing unskilled, poorly paid jobs, as well as significant emigration. A brain drain is creating shortages of skilled labor in many fields.

A new tax reform cuts and unifies corporate income tax, and reduces employers’ social-security contributions. However, the tax regime overall remains complex. The government has offered tax incentives to companies that support its policies. 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 is unchanged relative to 2014.

A period of spending cuts and centralization of control has undermined schools, resulting in lower PISA scores. Teacher protests have won some decentralization, but conflict with the government persists. Poverty is worsening, and the middle class is being weakened. Roma are deeply marginalized, particularly with regard to education.

Health care has been undermined by repeated scandals and protest. Problems include widespread mismanagement and corruption, hospital debt, and a brain drain of medical staffers. Social policies encourage traditional family models. The gender gap in employment has expanded as a result. Child care for children under three has been marginally expanded.

Pension policy has increased uncertainties regarding old-age income. The government has strongly opposed the permanent settlement of non-Christian, non-European refugees; however, migration out of Hungary is a bigger problem.

Environmental Policies

#15
With implementation concerns despite an adequate legal framework, Hungary falls into the upper-middle ranks internationally (rank 15) in the area of environmental policies. Its score on this measure is unchanged 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. Problems such as water contamination and waste-site mismanagement have grown.

While the country follows the general EU lead on climate policy, recent years have seen a relatively strong increase in CO2 emissions. A nuclear power plant is being extended, despite questions concerning waste storage.

Democracy

#40

Quality of Democracy

#40
Having taken large steps back in recent years, Hungary falls into the bottom ranks (rank 40) with regard to democracy quality. Its score on this measure has declined by 1.3 points since 2014.

Electoral procedures are arranged to dilute opposition support. Government intimidation has reduced membership and donations to opposition parties. Popular initiatives proposed by the opposition are typically refused by the government-controlled election board.

The public media are subject to increasing government control, while government allies control much of the private media. Rifts within the right-wing camp have protected some media pluralism. The media-oversight body is composed of government loyalists.

New anti-terror powers gives the government the power to suspend existing laws. Independent NGOs face harassment, and discrimination against minorities, especially Muslims and Roma, is widespread. Rapid legal changes have created a chaotic administrative environment, and judicial independence has declined substantially. 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 0.2 points 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. Informal and often improvised decision-making dominates, with Orbán guiding virtually all important decisions.

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

Institutional reform has centralized power, facilitating patronage and ideologically driven decisions. High-level government reorganizations seem aimed at creating elite rivalries. Agencies are closely monitored. Municipalities have lost responsibilities, but their remaining tasks are underfunded, particularly if mayors are not from the governing party.

Executive Accountability

#40
With few checks on the powerful prime minister’s power, Hungary falls into the bottom ranks (rank 40) with respect to executive accountability. Its score on this measure has declined by 0.2 points relative to 2014.

Despite declining media freedom and propagandistic government-information policies, the public’s policy knowledge has actually increased, with crises particularly in education and health care leading to widespread discussions and social movements. Print media have uncovered scandals and corruption, while NGO websites are actively followed by journalists.

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 despite its governing-party links. 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. NGOs face considerable harassment, but have played an important if limited oversight role.
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