Acta Oeconomica 46. (1994)
1994 / 1-2. szám - Nagy András: Import Liberalization in Hungary
Acta. Oeconomica, Vol. 46 (1-2), pp. 1-26 (1994) IMPORT LIBERALIZATION IN HUNGARY A. NAGY In the following the Hungarian import liberalization experience is analyzed, and within this special attention is paid to the timing and sequencing of liberalization, to the social forces supporting and resisting the introduction of liberalization measures, and to the social consequences of structural change. The research concentrates on the institutional aspects of the trade liberalization process: how the existing (inherited, reformed and newly created) institutional structure and its interests and conflicts have affected the elaboration, acceptance and introduction of the liberalization measures, and how they have influenced the consequences, the modifications and development of the regulations. The import regime before liberalization In Hungary the import regime of the strict command economy changed significantly with the reform of the economic management system in 1968. It was evident for the radical reformers of the time (see e.g. Nagy 1967) that the introduction of competition was one of the fundamental conditions needed to increase efficiency. This could not be realized if the economy remained monopolized and closed. One of the great successes of the idea of import liberalization and practical convertibility could be found in the resolution on the reform, made by the Central Committee of the Hungarian Socialist Workers’ Party; this resolution included the principle that “the enterprises which have forints1 can import”. The idea was that planned import quotas would be abolished so that companies requiring imports could apply for and automatically receive import licences, and they would be allowed to change forints into convertible currency for this purpose. However, it soon turned out that including such principles in resolutions was not nearly enough to realize these aims. Even if the Hungarian economic reforms of 1968 in many respects proved to be successful and economic activities—including imports—became freer and more efficient, it failed within a few years. Trade was not liberalized and in practice only the system of control and management of trade was changed. The managers of the big state-owned firms supported the reforms inasmuch as it liberated them from many restrictions of the command economy and enabled them to become more independent and powerful. This also meant that they even * * The support of the Institutional Reform and the Informal Sector (IRIS) at the University of Maryland and the Hungarian National Scientific Research Foundation (OTKA) is gratefully acknowledged. xThe forint is the domestic currency in Hungary. Akadémiai Kiadó, Budapest