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Recent Changes Moving Hungary Away from the European Social Model
Abstract and Figures
The chapter describes the radical transformation of the Hungarian welfare system over the past three years. Although cuts in welfare provisions have occurred repeatedly in response to fiscal crises during the past twenty years, we argue that the recent changes are much more fundamental and are determined by different, more political motivations. The weakening of workers’ rights and consultative institutions, the severe cuts in social protection for the unemployed, the abolition of early pensions, the renationalisation of the private pension pillar and the neglect of equal opportunities policies have substantially weakened the originally relatively generous welfare system in Hungary. This has led to a further polarization of society, deepening poverty, growing insecurity and a rise in emigration. We explore in more detail unemployment provisions, where recent reforms have been the most controversial and discordant with the European Social Model. We show that this has increased the risk of poverty among the unemployed, contributed to a rise in persistent poverty and deepened structural unemployment, which may prolong the process of economic recovery.
The first two sections set the scene by giving a broad-brush description of the Socialist welfare regime and a brief account of the main changes during and after the transition to a market economy. Section 3 outlines changes between 2000 and 2013, focusing on three broad areas of the European Social Model (ESM): workers’ rights and consultative institutions, welfare provisions and equal opportunities. Section 4 assesses the impact of the most recent changes on poverty, employment and the sustainability of the welfare system. Then we turn to a detailed analysis of recent measures affecting provisions for the unemployed (Section 5). Section 6 concludes with policy recommendations on possible amendments to the Hungarian welfare system to improve its performance and sustainability.
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... Confronted with the economic crisis and the aforementioned external pressures to deficit reduction, many of these reforms were designed to consolidate the public finances, and public commentators doubted that he could deliver on his election promises (The Economist 2010). Unlike his predecessors, however, the Orbán government aimed at a deficit reduction mainly through increasing revenues (Mozdzierz 2015), even though specific parts of the welfare state were also cut substantially (Krémer 2017;Scharle-Szikra 2015). Above all, the core ideological claims of "native producerist deservingness", together with a strong rhetoric claim of economic nationalism and independency, figure prominently in the implemented reforms. ...
... Drastic cuts in unemployment benefits and social assistance fostered labor market activation via negative incentives and sanctions, while investment in training and education has been curtailed (Bohle and Greskovits 2019;. 15 The duration of unemployment benefits has been cut from 9 to 3 months (the shortest period in the European Union), and social assistance benefits have been curtailed to 15 percent of the minimum wage (down from 20 percent) (Scharle-Szikra 2015). In addition, social assistance has been tied to the obligation to join the so-called 'public works program', which provides low-skilled jobs for the unemployed and has been massively scaled up under the Orbán government (OECD 2014). ...
... deserving groups in society, who "should receive what they deserve, and not see their pensions decrease"(Orbán 2017) 17 . Already in the election campaign in 2010, Orbán promised to protect pensions from further cuts and end the austerity policies implemented by the former government.Despite this rhetoric, cuts in benefits also took place in the field of pensions, since the government abolished early retirement schemes and implemented harsher eligibility rules for disability benefits(Scharle-Szikra 2015), resulting in expenditure cuts amounting to 0.3 percent of GDP in both 2012 and 2013 (OECD 2012). These cuts, however, were in line with the government's idea of a work-based economy and the aim of boosting labor market participation, while not cutting the general level of pensions. ...
... The Hungarian economy under Viktor Orbán not only drifted away from what one might call a European social model, but it also radically reduced redistributive generosity resulting in dramatic polarization of the society along with poverty, and insecurity (Scharle and Szikra 2015). But the redesign (or, more bluntly, the erosion) of the previous welfare regime was more than reducing entitlements for some. ...
... By totally redesigning social policy and labour programs, populist politicians and their local representatives managed to solidify an unusually strong form of clientelism in the country. Reducing social entitlements, therefore, meant a dramatic change in the Hungarian social model, being part of a much larger social reform wherein the aim was to entirely break away from the past, including the old elite (Scharle and Szikra 2015). ...
... Our study presents Hungary as an example where the social policy has moved away from the European Social Mode since 2010 with the current conservative regime's coming to power (Szikra, 2014;Scharle and Szikra, 2015). According to the European Commission's Country Report (European Commission, 2020) in the last decade, income inequalities have increased, and inequalities in access to public services have further strengthened in Hungary. ...
In this study the authors examine the impact of social incomes on social inequalities and social integration in the post-2010 populist welfare system in Hungary. A detailed quantitative analysis reveals the structure and distribution of social incomes among different groups in contemporary Hungarian society. This analysis includes factors such educational attainment, demographic structure and income of households, number of children, and deprivation index. The results of the research show that welfare redistribution has lost its ability to reduce inequalities and instead serves as a means of perpetuating social disparities.
... This represents an unprecedented level of labour market activation, even if we know that 2010 was the year hardest hit by the crisis. This increase in the number of employees had a different effect on the occupational class structure in the period under review: in the first half of the decade, the share of unskilled workers increased mainly in the lower segment of the occupational structure, presumably due to public work programmes (Scharle & Szikra, 2015). However, in the last two years of the decade (2018-2019), the direction of the processes changed somewhat: the number of white-collar workers increased significantly, and the proportion of unskilled workers decreased, ending the polarisation trends in the labour market. ...
The paper aims to summarise the role of social integration in the labour market processes of the 2010s in Hungary. We have left behind a key decade when employment growth reached unprecedented proportions. However, this unprecedented growth had serious social costs, as those excluded from the labour market during the break-up of the welfare state were left without social protection, and because the financial situation of those entering the labour market improved in absolute terms. Still, their relative deprivation did not change or worsened, and in the meanwhile their ability to enforce their interests has been significantly reduced. That is, today’s Hungarian government wants to integrate the members of society into the labour market. To this end, it provides increasingly weak protection for those who, due to old age, long-term illness or unemployment, are forced to stay out of the labour market. Disintegration affects those with the fewest resources, the least capable of conflict and those unable to articulate their problems in public most: these are women, young people and older workers who are ‘traditionally’ in a worse position in the labour market, in addition to those who are forced out of the labour market. The question is whether the current social model or the situation of those who disintegrated from the labour market will continue to deteriorate after the economic slowdown.
... While actual policies increased the polarization of the middle class, enriching a narrower circle of new middle class and letting othersteachers, doctors, or the largest part of professionals squeezed into increasingly precarious market jobs-suffer the effects of downward mobility, government communication continued to address the middle class as the universal subject of the nation. Reorganizations of social policy or housing support that increased social polarization were expressed in the general language of "families" (Scharle & Szikra, 2015), translated on billboards and loan advertisements into images of middle class family life. The ideological use of the idea of the family was completed by a communication campaign that promoted traditional female roles as a symbolic cover for increasing the burden of care work on women while denying the fact that it is work (Csányi, 2019;. ...
... The waves of measures affecting budgetary developments in 2021-2022, while being broadly based in terms of beneficiary groups, overall tended to disproportionally favor the (upper) middle classes reflecting the social policy preferences of Fidesz (Ádám, 2020b;Scharle & Szikra, 2015;Szikra, 2014). From 2021, additional generous supports were introduced to homeowners with children as part of the investment stimulus package. ...
The paper provides a case study on how the Orbán regime in Hungary has dealt with coronavirus disease 2019 (COVID‐19) in 2020–2021. Despite having led worldwide rankings in pandemic‐related death rates since the second part of 2020, the government was not politically shaken by COVID‐19. Institutionally unrestrained, the governing majority periodically renewed emergency legal regimes to control public discourses and curtail the financial resources of opposition‐led local governments. The policy conduct of the regime is discussed in the context of authoritarian populism, which is conceptualized along a strategy‐based approach to populism. In this, authoritarian populism is seen to generate democratic legitimacy for dismantling the institutional foundations of liberal democracy and the rule of law. This had been happening in Hungary well before COVID‐19 kicked in, but the pandemic provided enhanced opportunities for this strategy. Meanwhile, fiscal policies became increasingly expansionary, signalling a partial return to the practice of preelection overspending.
W badaniach nad współczesnym populizmem zaznacza się relatywny deficyt całościowych, a nie tylko przyczynkarskich opracowań poświęconych konkretnym politykom publicznym, jakie prowadzone są zwłaszcza przez rządzących samodzielnie populistów. Celem artykułu jest próba określenia specyfiki oraz porównawcze spojrzenie na trzy różne odmiany populistycznej polityki społecznej: latynoamerykańską, zachodnioeuropejską oraz środkowo-wschodnioeuropejską. W sytuacji dość słabego rozpoznania tematu w literaturze naukowej, szczególnie w ujęciu porównawczym, zaprezentowane tu uwagi nie są rygorystyczną, wysoce zdyscyplinowana analizą komparatystyczną wybranych przypadków. Jest to raczej wsparty ogólniejszą refleksją teoretyczną generalny ogląd sytuacji oraz garść empirycznych ilustracji pokazujących obserwowane w różnych częściach świata modelowe wzory populizmu socjalnego (takie jak szowinizm socjalny czy klientelizm socjalny), które wykazują wobec siebie pewne podobieństwa, ale też wyróżniają się swą własną regionalną i krajową specyfiką.
In this study, we examine the narratives of Hungarian entrepreneurs with disabilities (EWD) of the post-socialist era, using microhistory. Our research question concerns how ableism appears in the lives of EWD and how the aftermath of socialism emerges in their experience of ableism. We believe that a state-socialist past influences the lives and careers of EWD in a way that is unique in entrepreneurial and disability literature. Drawing on the accounts of 29 Hungarian entrepreneurs, we identified four mechanisms that make post-socialist ableism specific: invisibility; passivity and welfare dependency; the legitimacy of disability organisations; as well as the limitations of economic participation. Our research suggests that these effects, embedded in the current political, social, and economic environment, can only change slowly and over a long time.
The new millennium has seen the rise of right-wing populism all over the world. Central and Eastern Europe offers an interesting case study insofar as populism has become a mainstream political movement. By focusing on Czechia, Hungary, Poland and Slovakia (known as the Visegrad 4), the chapter demonstrates that the rise and consolidation of populism in the region can be best interpreted as a Polányian countermovement, i.e., a firm reaction to the neoliberal agenda of economic and political transformation. The high cost of the transformation along with the disillusionment in European integration, as the latter has not managed to secure the living standard at the Western European level for new member states of the European Union, made these countries highly susceptible to such countermovements against neoliberalism in the economy and the traditional party system in politics. Countermovements, however, occurred in the form of populism.
East-Central European countries have been hit by the economic crisis especially hard. This article argues that reactions to the crisis by the Hungarian government of Viktor Orbán have been distinct in several ways. The crisis has been used by the cabinet as a rationale to carry out paradigmatic reforms in nearly all policy fields within a very short period of time while the two-thirds parliamentary majority provided an opportunity for this. There have been no widespread protests and no veto players have prevented the implementation of reforms, partly because checks and balances, including the Constitutional Court, have been put aside. The direction of reforms has been diffuse and often contradictory, consisting of neo-liberal, étatist and neo-conservative elements. Early assessment of changes indicates the increasing polarization of society not only in terms of income but also of ethnicity.
This article analyses the first Hungarian social insurance law, enacted in 1891, which made health insurance compulsory for all industrial employees (including commercial clerks) in Hungary. Its timing and content suggest that it was modelled on German and Austrian legislation. But, in contrast to Germany and Austria (where the implementation of the legislation was quite successful), implementation of the legislation in Hungary encountered several difficulties. This is the reason why the proportion of de facto insured individuals in Hungary was much less than in Austria and Germany.
The article attempts, first, to fit Hungarian social insurance legislation into the wider context of European welfare development. It gives a precise definition of de jure insured persons with particular reference to the situation of day labourers. It then analyses some organisational issues, e.g. the funding of the ‘district insurance offices’, and the crucial problem of establishing an effective procedure for collecting contributions.
The failure of the latter and the shortage of doctors led to failures in implementation. By the turn of the century, the majority of the de jure insured had not become de facto insured and many of those who were insured did not get sufficient health provision. The first problem was a long lasting one: if one compares the proportion of insured persons in Austria and Hungary over time, the difference actually widens in the period before World War II.
More than two decades after the post-communist constitutional transition, Hungary entered the spotlight again. The winner of the 2010 elections gained two-thirds of the seats in Parliament, which made constitutional revision exceptionally easy-bypassing political and social deliberation. On April 25, 2011 (Easter Monday), on the first anniversary of the 2010 election, the president promulgated a new constitution, called the Fundamental Law. The new document has attracted the attention of scholars, politicians, media and the general public, both at home and abroad. While it is the first newly made constitution to originate from a democratically elected parliament in Hungary, the way the text was drafted as well as the content of the text itself, according to many views, are in conflict with some of the basic features of democratic constitutionalism. This is a book about the new Hungarian constitution. It is meant as a comprehensive account of the Fundamental Law's main attributes and its underlying principles. Focusing on both the constitution-making procedure and the substance of the text, the authors outline and analyze how the current constitutional changes are altering the basic structure of the Hungarian state. This is a particular story, but it is of global relevance. The aim of the contributors is to examine a constitutional transition from the perspectives of comparative constitutional law, legal theory and political philosophy.
This is the first comparative-historical study of welfare states (social policies) in the former communist region of East Central Europe. Inglot analyzes almost one hundred years of expansion of social insurance programs across different political regimes. He places these programs in a larger political and socioeconomic context, which includes the most recent developments since the advent of democracy. Based on this research, he argues that despite apparent similarities the welfare states of East Central Europe, Czechoslovakia (Czech Republic and Slovakia since 1993), Poland, and Hungary have pursued distinct historical paths of development and change. He examines the highly unusual evolution of these welfare states in detail, tracing alternating periods of growth and retrenchment/reform, which he links to political and economic crises under communist rule. Inglot uses this comparative analysis of welfare systems to examine the continued influence of history over the politics and policies of the social safety nets in Eastern Europe.