Scarica Janos Kornai - The Hungarian Reform Process e più Sintesi del corso in PDF di Economia solo su Docsity! The Hungarian Reform Process: Visions, Hopes, and Reality Janos Komai Journal of Economic Literature, Vol. 24, No. 4. (Dec., 1986), pp. 1687-1737. In the paper “The Hungarian Reform Process: Visions, Hopes, Reality”, Janos Kornai describes the main characteristics and consequences of the reform undertaken in 1968 on the Hungarian economy, which, according to a widespread view, is interpretated as a system of market socialism. The purpose of Kornai is to reject this interpretation by demonstrating that the attempt to introduce market elements in the Hungarian economy was a failure. Before explaining the reasons why the reform did not succeed, he compares the previous economic context with the new one. In the pre-reform period the state sector was administered by the command economy: the economy was governed by a bureaucracy organized in a multilevel hierarchy; the national plan was elaborated and approved by the highest political bodies, in such a way to assure “taut planning”, which has the aim to extract the maximum output possible from resources; at the bottom, the state-owned firm gets four set of mandatory plan indicators: output target; input quotas; financial indicators, related to production costs, profits and credit ceilings; a list of action to be taken by the firm. Commands, in this system, were strictly mandatory and hard to change. After the reform, state-owned firms started to operate in a condition of dual dependence: they depend on suppliers and customers horizontally, but still on bureaucracy vertically. The dimensions that show these aspects are: entry, exit, selection of managers, determination of output and inputs, choice of technology, determination of prices, determination of wages and employment, credit, taxes and subsidies, investment. The creation of a state-owned firm can be initiated by an individual, but for succeeding is still fundamental the role of bureaucratic organs. On the other hand, even if there are state- owned firms that go out of business, their number is small and the exit is decided by bureaucratic procedures. Managers continued to be the most important vertical linkage. There was no real job market for managers and their career depended on the opinion of the top bureaucracy, and, even though a new regulation established that manager would have been appointed directly or indirectliy by employees, the administrative and political organizations still have veto power over the outcome of the election. However, the firm's autonomy has increased a lot in determination of output and short-term annual plans were determined by firms. At the same time, with state-owned firms formally declared autonomous about short-term plans, the system of material rationing and allocation has mostly been dissolved. Administrative intervention still occurs in the choice of technology but the firm’s autonomy has yet increased in this respect. The majority of prices ceased to be administrative, but just nominally, because for many goods strict ruled still prescribed how to calculate prices and what were the permitted profit margins. Ceilings on the total wage bill were abolished, but some tools of interfering in wage formation remained, like progressive taxation of the firm related to average wages. In addition, mandatory employment quotas were eliminated. Until recently, Hungary has had a "monobank system." In that respect it has remained similar to the classical socialist economy. The Hungarian National Bank has combined two functions: it plays the usual role of a central bank and also acts as a commercial bank. The reform introduced resolutions to establish a
