Nigel Swain

Determinants of Inflow of Foreign Direct Investment in Hungary and China: Time-Series Approach

This paper analyses what factors best explain foreign capital inflows into Hungary and China during the period 1978-92. The size of the host country markets is found to play a positive role, while the cost of capital variables and political instability are negatively correlated with investment inflows. It supports the hypothesis that low-cost labour and currency depreciation are important factors in explaining how much foreign capital inflows into a particular country. There is little evidence to support classical hypotheses concerning tariff barriers and imports variables. The OECD growth rates show significant positive correlation with foreign direct investment in Hungary.

Social Capital and its Uses

The article attempts to assess the use and usefulness of the concept of ‘social capital’. First, it assesses its differing conceptual uses in the works of four key writers, Pierre Bourdieu, Gary S. Becker, James S. Coleman and Robert D. Putnam, identifying broadly a problematic ‘social capital as social fact’ perspective associated with Putnam, and a more promising ‘contacts with influential people’ approach that can be derived from Bourdieu. It then considers the practical uses already made of the former approach in the development studies literature, before addressing some of the analytical problems associated with applying the latter in a policy environment. Finally, it takes three short examples from research in rural Central and Eastern Europe to illustrate how the concept can be used to both analyse social relations and suggest policy priorities. The articles conclusion is that ‘social capital’ of any variety is by no means the ‘missing link’ in development economics, yet ‘social capital’ of the Bourdieu-derived kind can be a useful, work-a-day concept in social analysis.

Decollectivization politics and rural change in Bulgaria, Poland and the former Czechoslovakia

As many of the former ‘Eastern Bloc’ countries process to join the European Union, some scholars are rejecting the utility of examining common socialist legacies in favour of individual national narratives. This article is informed by a belief in the continued and structuring importance of socialist legacies, but also by the conviction that socialist particularities are even more important. Socialist Eastern Europe was not uniform, and the imprint of both commonalities and particularities can be seen in its ‘transition’. This article seeks to investigate the impact of such particularities in the context of decollectivizing rural society. Almost a decade ago I published an article based on qualitative and quantitative research between 1993 and 1996 in nine villages each in Poland, the Czech Republic, Hungary, Slovakia, Romania and Bulgaria, which, informed by the importance of socialist particularities, endeavoured to provide a framework for understanding rural transition. Its premise was simple: that the experience of socialism in the region had not been uniform, that there were similarities and differences in the implementation of collectivized agriculture, and that these similarities and differences were reflected in the patterns and modes of decollectivization. Its key findings are presented in Table 1. As the table suggests, the article took the view that Stalinism extended beyond the political sphere and was associated with a characteristic set of policies for controlling the economy, in particular the rural economy, which minimized economic incentives and rewards, relying rather on political controls. Key policy areas for agriculture were whether farms were entrusted with their own machinery, the size of the economic surplus that they were allowed to retain, whether remuneration was in the unpredictable, usually low and often in-kind form of the ‘labour unit’ or a conventional wage, and the attitude adopted to the small household plot to

A Post-Socialist Capitalism

IN THE TWO DECADES OR SO FOLLOWING 1989, the countries of East Central Europe were transformed into market economies and liberal democracies, and became members of NATO and the European Union. Both the economic and the political transformations were radical; indeed the transition from socialism to capitalism was without precedent. Prior to the changes in East Central Europe, the (endogenous) development of capitalism in Europe has been much analysed by historians; and political economists had investigated the externally driven integration of ‘underdeveloped’ and formerly colonial countries into global economic systems. However, it was a step into the unknown to contemplate the creation of capitalism out of a developed, highly articulated socio-economic entity that had, with some success, been a significant challenger to the West for a number of decades. Based on central planning and with around 90% of the economy in state ownership of the means of production, distribution and exchange, East Central Europe under communist rule had been dominated by political structures that had rejected whole-heartedly both private ownership and the very logic of the market. The following analysis seeks to identify the genesis and differentia specie of this postsocialist capitalism. It is empirical but not empiricist in conception. It is informed theoretically by the following scarcely contentious propositions: that what has emerged in post-socialist Eastern Europe is a form of capitalism; that it is a historically unique form of capitalism since, however the experience of the 1945–1989 period might be branded (for example as socialism, state socialism, state capitalism, or deformed workers’ state), the transition from that socio-economic entity to capitalism had not happened before; and that it is therefore analytically useful to try to identify its specific characteristics. Post-socialist capitalist democracy in Eastern Europe was fired in the crucible of four forces. The first of these was the socialist legacy, which left its imprint in the social, cultural and economic spheres. The second was equally an element of the

From Kolkhoz to Holding Company: a Hungarian Agricultural Producer Co‐operative in Transition

This paper uses a case study, the Noble Grape co-operative (a pseudonym), to illustrate the roles of social and cultural capital in both the creation of a successful agricultural producer co-operative (collective farm) in socialist Hungary and its transformation into a successful private company after 1989. It identifies both continuities in personnel, from socialist technocrat to capitalist manager, and continuities in the financial establishment with which it deals. The social origins of the key players in the transformation are compared with the existing sociological literature on changing elites in Eastern Europe, and the fate of the ordinary members who appear to be the losers in the process.

Agricultural Restructuring in Transylvania in the Post-Communist Period

This chapter considers the challenge of agricultural transition in Romania since 1989. It first sets the national scene with the help of key legal measures and statistics, and then illustrates the impact that these measures had on the ground by reference to individual villages in Transylvania. Agricultural restructuring in Romania has reflected many of the paradoxes of Romania’s post-Communist transition. On the one hand, like the events which overthrew Ceausescu, developments were initially amongst the most radical in the region: cooperatives were broken up and there was a massive return to small-scale peasant farming.1 But after this cathartic destruction of a system which everybody hated and which had brought few benefits to cooperative members, the momentum for reform was lost. Further legal reforms were delayed, the real privatization of Agromecs (Machine and Tractor Stations) and the state sector in agriculture was much postponed, and even the radical promises of the 1996 government faltered. At the local level, most agricultural workers retreated into almost subsistence farming, while a few struggled to build viable commercial farms from the ruins of socialist agriculture.

The Visegrad Countries of Eastern Europe

This chapter is, of necessity, different from the others in this volume. First, we must consider not only issues of growth and stagnation, but also failure, decay and final collapse. For the events of 1989 brought to a clear end the socialist experiment, or at least, a particular type of socialist experiment, in Central and Eastern Europe. Second, the role of politics takes on more importance, because, in the case of the countries which we now call the Visegrad Four (Poland, Hungary, the Czech Republic and Slovakia), it was not governments pursuing policies to influence the economy, but rather planners who thought that they could dictate the pattern of output and the path of economic change. Third, because the cycles of growth, stagnation, decay and collapse were dictated primarily by problems encountered in trying to plan and only secondarily by developments in the international economy, the periodization is different (see Table 8.1).

The Fog of Hungary's Negotiated Revolution

This contribution uses the question of the presidency of the republic, the most divisive and consequential issue of Hungarys round table negotiations of 1989, to explore the process rather than the outcome of ‘negotiated revolution’. Political debate is necessarily something other than the exchange of reasoned argument. But the clear contrast between the bi-polar political divide within the Opposition Round Table (ORT) and their multifaceted and sometimes inconsistent lines of argument over policy suggests that, on this contentious issue at least, politicking was at least as important as politics.

Workfare Schemes as a Tool For Preventing the Further Impoverishment of the Rural Poor

Abstract This article examines workfare schemes in rural Hungary and their contribution to relieving rural poverty. It does so on the basis of an analysis of European Union statistics and a series of semi-structured interviews which were conducted in 2013-2015 as part of a larger project investigating the contemporary state of rural Hungary. The paper comprises four sections: following a short description of the methodology, regional disparities and deprivation in rural areas are introduced with the help of a typology on deprivation and Eurostat data, thus providing evidence for European comparison. Following this, the main findings of our extensive qualitative research into workfare policies in rural Hungary are introduced and discussed on the basis of related legislation4. The article finds that workfare schemes in the rural sector are unique to Central and Eastern Europe, and are especially favoured in Hungary; it also discovers that economists are correct in assessing that said workfare schemes create few new jobs. Nevertheless, they are ‘better than nothing’, and have become embedded in rural society, where they are appreciated by beneficiaries and local officials alike. They necessarily make a paternalistic distinction between the deserving and undeserving poor, and the more commercially-oriented schemes raise issues of market distortion.

Party Politics, Political Competition and Coming to Terms with the Past in Post-Communist Hungary

Abstract This article considers processes involved in coming to terms with the past in the early years of post-communist Hungary. It addresses the impacts of ‘soft’ late socialism, ‘negotiated’ post-socialist transition, and the intense inter-party and intra-party competition in which Hungary’s first democratically elected government operated. It concludes that claims that Hungary failed to confront the past in the early 1990s miss the mark. The past was confronted openly and aggressively by political actors, but the public will, as reflected in parliamentary legislation, was in favour of measures that resonated with ‘soft’ late socialism and a smooth post-socialist transition rather than political retribution.