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Fall 2001

ISSN 0890-913X

Volume 17, Number 1

Categories: Fall 2001

From Totalitarian Central Planning to a Market Economy : Decentralization and Privatization in Hungary

Z. Edward O'Relley, North Dakota State University, Fargo

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JournalofPrivateEnterpriseFromTotalitarianCentralPlanningtoaMarketEconomy:DecentralizationandPrivatizationinHungaryZ.EdwardO=RelleyNorthDakotaStateUniversity,FargoAntecedentstoprivatizationDuringthelastdecadeofthetwentiethcenturyachangethatcouldbecharacterizedastrulyrevolutionaryhasoccurredinnumerouscountriesoftheformerASovietbloc.@InHungary,scarcelytenyearshavepassedsincetheelectionofthefirstpostcommunistgovernment,buttheensuingchangeshavebeenmanyandfarreaching:theyhaveledtotheemergenceofamarketeconomyinwhichprivateownershipisnowdominantandinwhichmarketforceshavesupplantedthestatebureaucracyastheeconomy=sprimarycoordinatingmechanism.AlthoughpriortothepostWorldWarIIcommunisttake-over,Hungaryalreadyhadadevelopingmarketeconomy,between1945and1990,touseKornai=sterm(1990,54),thelonghistoricalprocessofthecountry=sembourgeoismentsufferedadramaticinterruption.Thereweremanyattemptstocorrectthemanyinefficiencies,wastes,andinternalcontradictionsofthehighlycentralized,SoviettypeplanningmechanismthathadbeenimposedonHungarybytheMuscovitecommunistsinpower;thebest-knownoftheseattemptswastheNewEconomicMechanism(NEM)thatsoughttoachieveasustainedandbalancedgrowthofnationalincomebylinkingplanandmarket,usingindirecteconomicregulators(interestrates,managementbonuses,etc.)toregulatestateenterprises.TheNEMalsofaltered,however,despitemanyattemptstorationalizeit.TheefficientoperationofeconomicregulatorswouldhaverequiredsignificanteconomiccompetitionwhichdidnotexistwithintheCouncilforMutualEconomicAssistance(CMEA),afundamentalrationalization

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Metadata [hide]

Title	From Totalitarian Central Planning to a Market Economy : Decentralization and Privatization in Hungary
Authors/Creators:	Z. Edward O'Relley, North Dakota State University, Fargo
Year:	2001
Volume:	17
Number:	1
Pages:	135 - 148
Publisher:	The Association of Private Enterprise Education
ISSN:	0890-913X
Document Type:	Articles

Citation:
O'Relley, Z. Edward / 2001. "From Totalitarian Central Planning to a Market Economy : Decentralization and Privatization in Hungary." The Journal of Private Enterprise, 17(1): 135-148.