Hungary

   

Policy Performance

#35

Economic Policies

#34
Showing significant but likely unsustainable gains in recent years, Hungary scores relatively poorly (rank 34) with regard to economic policies. Its score on this measure has improved by 1.2 points since 2014.

Real GDP growth has been strong for several years, topping the EU at nearly 5% in the recent period. Investment has reached record levels due to easy financing conditions, an expansionary fiscal policy and an inflow of EU funds. The sustainability of this boom is questionable due to labor shortages and state capture by Orbán allies.

The budget deficit has declined to 1.8% of GDP. The overall unemployment rate has dropped to near 3%, driven in large part by public-works programs. Significant emigration has also played a role, creating a worrisome brain drain. Numerous workers have been imported from neighboring countries, as well as Vietnam and Mongolia.

A series of 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 outsiders. Following the dismemberment of the country’s independent Academy of Sciences, the government has established a research network controlled by Ministry of Innovation and Technology (ITM).

Social Policies

#38
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 quality of public education has shown a marked decline. School textbook content is increasingly influenced by nationalistic ideology. The government has centralized control over the entire higher education system. Poverty is worsening among those with low incomes, and the middle class is being further weakened. Islands of poverty exist in the country’s east, and Roma are increasingly segregated.

Healthcare has suffered from the absence of a dedicated ministry and low spending. Outcomes lag behind those in most other EU states, and many doctors and nurses have emigrated. Some hospital sectors have had to close due to staffing shortages. Family policy has focused on providing incentives to have children rather than on enabling women to combine parenting and employment.

The promised expansion of childcare facilities has progressed slowly. Concern about intergenerational fairness in the pension system is rising. 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

#24
Lacking evidence of a strong climate-change policy, Hungary falls into the middle ranks internationally (rank 24) in the area of environmental policies. Its score on this measure has declined by 0.3 points relative to 2014.

Environmental policy has suffered from a lack of commitment, institutional fragmentation, and weak implementation and coordination. After initially seeking to discredit green activists as disguised communists, the government has sought to give itself a greener image.

Low energy prices have led to very high levels of household energy use. Energy supply is largely dependent on fossil fuels. After declining through 2014, CO2 emissions have begun to rise again. Weak local oversight has led to contaminated water and produced a countrywide waste crisis. Some progress has been made in the areas of waste recycling and recovery.

The country has signed the Paris Agreement and adhered to EU agreements. However, it has fought to weaken the EU’s environmental ambitions, arguing that it needs higher emissions quotas as a less-developed country, and blocking the EU plan to become carbon-neutral by 2050.

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 are arranged to dilute opposition support, even to the point of running fake candidates. Most traditional media outlets are now controlled by the government or allied oligarchs, with about 500 recently consolidated under a single central organizations. Successful opposition local government officeholders have said they would launch new media organizations.

Campaign-finance regulators have targeted opposition parties, but in 2019 failed to prove that the main opposition party had acted illegally. Opposition supporters are harassed by law enforcement during campaigns. Anti-Semitic and xenophobic government campaigns are used as tactics to distract the population from governance failures.

Judicial independence has declined substantially. The 2018 elections restored the government’s two-thirds parliamentary majority, giving it complete control over judicial appointments. However, a proposal to establish a new government-controlled branch of the judiciary was shelved following criticism. Corruption is pervasive, with benefits flowing to informal Fidesz political-business networks.

Governance

#39

Executive Capacity

#37
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 0.8 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 generally high under Orbán, has diminished somewhat due to the emergence of competing power centers. Regulatory enforcement is often biased when the interests of key oligarchs are at stake. Task funding and relations with local governments are likely to suffer following opposition victories in the 2019 municipal elections.

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 0.8 points relative to 2014.

The opposition victories in the 2019 municipal elections has revitalized many citizens’ interest in politics. 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 independently despite its governing-party links, though it has been instrumentalized as a weapon against opposition parties. The ombudsman has not served as a check on the government.

The governing Fidesz party is highly centralized, while opposition parties vary in their organization. While largely loyal to the government, some business associations have criticized the haphazardness of economic policy. Trade unions have become more active. The government has set up a broad, well-financed network of false, pro-government civil society associations and foundations.
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