Hungary

   

Policy Performance

#35

Economic Policies

#38
Showing significant but likely unsustainable gains over time, Hungary falls into the bottom ranks (rank 38) internationally with regard to economic policies. Its score on this measure has improved by 0.9 points since 2014.

Real GDP growth has been strong for several years, though this has been primarily driven by EU transfers, and thus may be difficult to sustain. Economic policy has been driven by power politics and state capture, exemplified by a concentration of banks in the hands of pro-government oligarchs. Deficits have risen due to pre-election pro-cyclical spending, and debt levels remain relatively high.

Unemployment rates have dropped significantly in recent years, in large part due to a broad public-works program that rarely produces long-term labor-market integration. Significant emigration has also played a role, creating a brain drain that has led to skilled-labor shortages in many fields.

Tax reforms have shifted the burden from direct to indirect taxes. Tax policy has been instrumentalized to favor oligarchs close to the governing Fidesz party, and to penalize independent civil society groups. R&D spending has been significantly increased, but the government has moved to centralize and control research institutes and university research funding.

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.

The quality of public education has declined due to spending cuts and restructuring. The government has progressively centralized its control over universities, with negative effects on teaching and research quality. Poverty is worsening among those with low incomes, and the middle class is being further weakened. Roma are deeply marginalized, particularly with regard to education and employment.

Health care policy has led to widespread mismanagement and corruption, hospital debt, and a brain drain of medical staffers. High-quality care is available in the private sector, but is expensive. The government has contrasted pro-family rhetoric with its anti-immigrant positions, offering family assistance and other social benefits. Promised child-care expansions have been slow to emerge.

Although the government offered a one-time pre-election bonus to retirees, pensioner poverty has increased. The government has taken a strongly xenophobic anti-refugee stance both domestically and in an EU context. Crime rates have fallen, but the government does little to prevent violence against Roma, Jews, homosexuals and opposition demonstrators.

Environmental Policies

#21
With implementation concerns despite an adequate legal framework, Hungary falls into the middle ranks internationally (rank 21) in the area of environmental policies. Its score on this measure has declined by 0.3 points relative to 2014.

The country has comprehensive environmental laws, strongly influenced by EU policies. However, the issue has not been a focus for the government. Policy has thus been fragmented, and problems such as drinking-water contamination and waste-site mismanagement have grown. Air pollution and urban construction in particular remain unaddressed problems.

Environmental issues have largely been dealt with by a department of the Ministry of Agriculture, from which a large number of employees were fired in 2018.

The country is expanding its use of nuclear power, which will help reduce carbon-dioxide emissions, but has raised numerous other environmental issues.

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 1.7 points since 2014.

Electoral procedures such as voting rights and party registration and funding are arranged to dilute opposition support. Most traditional media outlets are now controlled by the government or allied oligarchs. The internet has thus become the central forum for public discourse and information, though this too is disrupted by disinformation and bot campaigns.

Popular initiatives are used as an expression of dissent, but most are refused by the government-controlled election board. Asylum-seekers are subject to forced detention. Activities assisting refugees have been criminalized, and a new “privacy protection” principle protects politicians from criticism, whistleblowing and investigative journalism. The government’s anti-Soros campaign has invoked anti-Semitic stereotypes.

Judicial independence has declined substantially, and corruption is pervasive. A new constitutional amendment narrows the sources of interpretation available to the courts, binding them to lawmakers’ original reasoning. The 2018 elections restored the government’s two-thirds parliamentary majority, giving it complete control over judicial appointments.

Governance

#38

Executive Capacity

#36
Despite the state’s sweeping consolidation of power, Hungary falls into the bottom ranks (rank 37) with regard to executive capacity. Its score on this issue has declined by 0.6 points relative to 2014.

The Prime Minister’s Office is the central coordinating body, acting to ensure that policies are in line with the governing party’s ideology. This sometimes creates bottlenecks. Informal decision-making dominates, with Prime Minister Orbán guiding virtually all important decisions. A new technological modernization plan has somewhat boosted the government’s strategic orientation.

The government does not systematically engage in RIAs or ex post evaluations. Public consultation largely takes the form of manipulated citizen questionnaires. Government communication is coherent, but is designed to bring public discourse into conformance with the prime minister’s policies.

Ministerial compliance, while always high under Orbán, has improved further after a post-election cabinet reshuffle. Regulatory enforcement is often biased when the interests of key oligarchs are at stake. Relations with the EU hit a new low after the European Parliament criticized the government for violating European rules and values.

Executive Accountability

#39
With few checks on the powerful prime minister’s power, Hungary falls into the bottom ranks (rank 39) with respect to executive accountability. Its score on this measure has declined by 0.5 points relative to 2014.

The failure of the democratic opposition in 2018 has led to increased political apathy. The state-controlled media often does not report on events that reflect poorly on the government. Online media have gained in significance as a consequence, but many citizens do not have access to these sources.

Parliamentarians’ resources, particularly among the democratic opposition parties, are not sufficient, and oversight powers are in practice flawed. The audit office has acted relatively professionally despite its governing-party links, though it was instrumentalized as a weapon against opposition parties in the 2018 elections. The ombudsman has not served as a check on the government.

The government party and main left-leaning parties are centralized, with other opposition parties fragmented. While largely loyal to the government, some business associations have criticized the haphazardness of economic policy. The government has set up a broad, well-financed network of false, pro-government civil-society associations and foundations.
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