A quiet tax revolution in Hungary? Interview with Dr. György Matolcsy, governor of the Central Bank
Interview with Dr. György Matolcsy, Governor of the Central Bank by Tamás Pesuth
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Interview with Dr. György Matolcsy, Governor of the Central Bank by Tamás Pesuth
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The crisis of 2008–2009 has ended, stockmarkets skyrocketed in 2012–2013, while growth of the real sector remained sluggish in Europe. This article attempts to explain the latter puzzle. Analyzing long term factors, the costs of short-termism in crisis management become obvious. The limitations of EU as a growth engine are highlighted.
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Jenõ Szûcs wrote his essay entitled Sketch on the three regions of Europe in the early 1980s in Hungary. During these years, a historically well-argued opinion emphasising a substantial difference between Central European and Eastern European societies was warmly received in various circles of the political opposition. In a wider European perspective Szûcs used the old “liberty topos” which claims that the history of Europe is no other than the fulfillment of liberty. In his Sketch, Szûcs does not only concentrate on questions concerning the Middle Ages in Western Europe. Yet it is this stream of thought which brought a new perspective to explaining European history. His picture of the Middle Ages represents well that there is a way to integrate all typical Western motifs of post-war self-definition into a single theory. Mainly, the “liberty motif”, as a sign of “Europeanism” – in the interpretation of Bibó’s concept, Anglo-Saxon Marxists and Weber’s social theory –, developed from medieval concepts of state and society and from an analysis of economic and social structures. Szûcs’s historical aspect was a typical intellectual product of the 1980s: this was the time when a few Central European historians started to outline non-Marxist aspects of social theory and categories of modernisation theories, but concealing them with Marxist terminology.
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The reviews of: -“Globalizing Employment Relations. Multinational Firms and Central and Eastern European Transitions” by Sylvie Contrepois, Violaine Delteil, Patrick Dieuaide and Steve Jefferys; Houndsmill: Palgrave Macmillan, 2011, 251 pp. ISBN: 978-0230252431 -“Outcast Labour in Asia – Circulation and Informalization of the Workforce at the Bottom of the Economy” by Jan Breman; New Delhi: Oxford University Press, 2010, 391 pp. ISBN: 978-0-19-806632-3
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This essay attempts to go beyond presenting the bits and pieces of still ongoing crisis management in the EU. Instead it attempts at finding the ‘red thread’ behind a series of politically improvised decisions. Our fundamental research question asks whether basic economic lessons learned in the 1970s are still valid. Namely, that a crises emanating from either structural or regulatory weaknesses cannot and should not be remedied by demand management. Our second research question is the following: Can lacking internal commitment and conviction in any member state be replaced or substituted by external pressure or formalized procedures and sanctions? Under those angles we analyze the project on establishing a fiscal and banking union in the EU, as approved by the Council in December 2012.
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Keynesian policy was quite successful in the post-war decades in Western Europe, but by the late 1960s lost its efficiency due to changes in conditions rather than its mistaken logic. The lesson from the first global crisis erupting in early 1970s and also from the subsequent several crises since then is that the increasing crisis propensity of the world economy is rooted in its inherent disequilibria stemming from deep inequalities, asymmetrical interdependencies and disintegrated socio-economic structures. In view of the failure of the prevailing methods of crisis management, particularly those undifferentiated, antisocial austerity measures corresponding to a neo-liberal monetarist concept which neglects this lesson, many economists prefer the Keynesian recipe. However, since global crises need global solution, and the spread of conspicuous consumption modify the demand constraint, its application must be adjusted to reality, and requires some global governance which may pave the way for a global oeco-social market economy.
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The reviews of: -“Poor Economics. A Radical Rethinking of the Way to Fight Global Poverty” by Abhijit Banerjee and Esther Duflo; New York: Public Affairs, 2011, 320 pp. ISBN 978-1610390934 -“Capitalist Diversity on Europe’s Periphery” by Dorothee Bohle and Béla Greskovits; New York: Cornell University Press, 2012, 304 pp. ISBN 978-0801478154 -“Institutional Trust and Economic Policy. Lessons from the History of the Euro” by Dóra Gyõrffy; Budapest – New York: CEU Press, 2013, 204 pp. ISBN 978-6155225222
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The reviews of: -„European Integration: First Experience and Future Challenges“ by László Csaba, József Fogarasi and Gábor Hunya; Oradea: Partium Press, 2011, ISBN 978-606-8156-17-0 -„Fejlõdés-gazdaságtan (Development economics)“ by Tamás Szentes; Budapest: Akadémiai Kiadó, 2011, 531 pp. ISBN: 978-963-05-8981-9 -„Progress for the Poor“ by Lane Kenworthy; New York & Oxford: Oxford University Press, 2011, 168 pp. ISBN: 978-0199591527
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This article starts from the assumptions that the world can learn a lot from the empirical and theoretical debates and research results of dependency and world systems research. The European ‘political class’ seems to react more slowly to the implications of the global economic crisis. The policy package currently offered by the Commission still relies on open economies as pillar number 1 of any conceivable strategy. A rediscovery of this radical ‘dependency perspective’, first introduced by the Argentine economist Raúl Prebisch and other Latin American thinkers during the Great Depression of the 1930s, and more fully developed in the so-called Latin American ‘dependency debate’ of the late 1960s and 1970s; and the current empirical ‘world systems theory’ mean a fundamental break with the existing dominant thinking on the subject of economic and social convergence. Continuing critical perspectives, initiated by Polanyi, and developed in Hungary by Andor, Inotai and Szentes, and above all in the quantitative investigations by the Swiss sociologist Volker Bornschier and his associates, we show that on a global cross-national scale, very important indicators of the future and well-being of our continent, ranging from the famous ‘European social model’ to tertiary educational enrolment, infant mortality, rule of law, female survival rates, economic growth, inequality, unemployment, and environmental security are significantly being determined by our models, and all the explanations point in the direction of the penetration of multinational corporations (MNCs) and its growth over time as constituting a major and important development bottleneck. Our dependency approach thus re-iterates the substantial findings, proposed by the Bornschier sociological school. A thorough re-thinking of basic premises of policy-making in Europe is thus necessary. In our opinion, European policy-making finally should dare to take the globalization-critical organizations of ‘civil society’ seriously.
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The reviews of: -„Capitalism, Socialism, and Democracy“ by Joseph A. Schumpeter; New York: Harper Perennial Modern Classics, 2008, pp. 464, ISBN: 006-156-1614 -„Trade, Poverty and the Environment. The EU, Cotonou and the African–Caribbean–Pacific Block“ by Adrian Flint; Basingstoke: Palgrave Macmillan, 2008, 204 pp. ISBN: 978-0-230-51678-6
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Being heavily energy dependent, it is not much of a surprise that Europe pays special attention to reducing the use of fossil fuels. Each one of the ten new member states is characterized by relatively low per capita energy consumption and relatively low energy efficiency, and the share of renewables in their energy mix tends to be low, too. The paper examines the problem when policy measures create a decrease in environmental capital instead of an increase. In this case it hardly seems justified to talk about environmental protection. The authors describe a case of a Hungarian rapeseed oil mill which would not be of too much interest on its own but given that almost all similar plants went bankrupt, there are some important lessons to learn from its survival. The enterprise the authors examined aimed at establishing a micro-regional network. They completed a brown-field development to establish a small plant on the premises of a former large agricultural cooperative. By partnering with the former employees and suppliers of the onetime cooperative, they enjoyed some benefits which all the other green-field businesses focusing on fuel production could not. The project improved food security, energy security and population retention as well.
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Work culture is an integrative component of the transformation process. At first sight, Hungarian work culture appears globalized, but many of the globalized or “westernized” characteristics remain superficial. The lack of a deeply-rooted democratic culture can easily be traced at the workplace. The entrance of multinational companies in Hungary has provided opportunities and challenges to the Hungarian workforce, including the model of the “globally integrated enterprise”. While multinational enterprises become more integrated and efficient on the global level, their local social and economic contexts disintegrate. If new forms of cooperation and partnership will emerge, a new work culture in Hungary could increase in momentum and flourish. Identifying critical junctures in work culture has underscored the need for new partnerships among employees and employers who together can positively change the economic landscape and prospects for the future. This study is based on empirical research by using the methodology of value sociology and value surveys. Its major conclusion is that reinventing Hungarian work culture might be a difficult and complex process but nevertheless it is possible and also inevitable.
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Since the reform of the Structural Funds in 1988 resulting from the Single European Act, Spain has been a net beneficiary of structural resources from the EU budget (which includes the Structural Funds and the Cohesion Fund). This situation has changed in the period 2007–2013, when significantly less EU funds will be allocated to Spain. The country will need to adapt to a changeover from being a net beneficiary of EU funds to becoming a net contributor.
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Objective: Free Trade Agreements (FTA) have recently drawn public attention due to political populism, alter-globalisation, and tendencies to redefine economic ties, together with the stereotype of mismatching social perception and so-called ‘expert knowledge’. Confronting this stereotype may contribute to better understanding of FTA controversies and identify possible vulnerability sources at the policy implementation level. Research Design & Methods: To analyse FTA impact, meta-analysis of the literature research results was performed using the sample of eight Spanish language papers. We included models in which natural logarithm of a trade measure was regressed on FTA dummy variable with other explanatory variables following Viechtbauer (2010). Findings: With FTA dummy variable increased trade can have its sources both in trade creation and trade diversion. Also, the endogeneity issue might result in overestimation of the effect, as countries that trade more are more likely to establish a FTA. Weighted least squares fixed effects models at both the study and the model level support this notion. Unweighted least squares models for Spanish language papers are the only ones where the positive effect of FTA is not statistically significant. Implications & Recommendations: Spanish language literature gives a lot of support to the notion that FTAs are associated with higher trade. However, the exact size of the effect can be brought to question. Contribution & Value Added: Public opinion in South America seems quite supportive for FTA and economic integration. Meta-analysis results confirm positive FTA effects, supporting its use as a convincing argument for further integration.
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Objective: The aim of the article is to verify how entrepreneurial orientation affects different types of knowledge in various stages of internationalisation of Polish firms. Research Design & Methods: The research method applied in the paper is the critical analysis of prior studies as well as a survey conducted on a sample of 355 businesses from Poland. The research is based on the previously known typology of knowledge: market knowledge and experiential knowledge. Findings: On the basis of the research, it can be concluded that entrepreneurial orientation plays a key role in the use of knowledge in internationalisation of Polish firms. Higher entrepreneurial orientation determines a more intensive use of knowledge on various stages on internationalisation. Network knowledge is used in the initial as well as mature internationalisation. Entrepreneurial knowledge is intensely used on the stage of mature internationalisation. Market and sociocultural knowledge is by far more explored in the initial internationalisation stage. Implications & Recommendations: The study identified the gap in the literature regarding entrepreneurial orientation and knowledge in the internationalisation process. Obtained results have useful value for business practice, especially for managers thinking of going international. Contribution & Value Added: An added value of this paper and at the same time a new view of the studied problem is the inclusion of knowledge and its role in the internationalisation process determined by the influence of entrepreneurial orientation.
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Objective: This article investigates the dynamics of internationally-oriented patenting activity in Russia, with the objective of exploring the link between innovation and entrepreneurship in an emerging economy. Research Design & Methods: By using the Patent Cooperation Treaty (PCT) statistics, we create a typology of PCT applicants. Patent categories are compared based on their technological footprint, measured as consequential patent references. Findings: The article reveals a shortage of domestic companies engaged in internationally-oriented innovation in Russia. The majority of international patent applications published by WIPO in 2013 were filed by individuals. Russian companies, as well as individual applications, demonstrate lower technological impact, measured as citations, than foreign subsidiaries operating in Russia. Implications & Recommendations: The innovation capability of Russian business, small or large, must be prioritised and strengthened via creating the right incentives and providing a stable institutional and infrastructural foundation. Contribution & Value Added: This project discovers the weak role of the domestic private sector in international patenting, which points to the imbalanced nature of the Russian national innovation system (NIS).
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Objective: This article explores the conceptual link between the development stages of a startup and organisational learning with the aim to conceptualise the practices of organisational learning levels emerging in specific life cycle stages of a global startup. Research Design & Methods: This article presents a review as well as a synthesis of the extant literature. The research integrates the theories of organisational learning and international entrepreneurship, and offers a conceptual framework that reveals interactions between the constructs in question. Findings: The results suggest that the ontological level and the processes of organisation learning can vary in global startups at different life cycle stages. In addition, the research findings also indicate that, for a global startup, for a successful transition from one cycle to another, learning processes of cyclical entrepreneurship learning have to take place. Implications & Recommendations: The findings of the study have implications in particular for global startup founders and their team members who would like to establish entrepreneurial businesses. Organisation learning practices should be applied in enterprises from the very beginning of the bootstrapping phase with the goal to develop a culture of learning and sharing knowledge when developing the startup idea. Contribution & Value Added: The originality of this work lies in proposing a conceptual framework that examines the organisational learning in startup development and international growth and a set of important considerations for further research, as well as contributing to the literature on international entrepreneurship.
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The article analyses changes on modern labour market and an expansion of non-standard forms forms of job execution in the so-called digital economy, focusing on individual, social and public factors. The role of non-standard forms of job execution for labour market flexibility is developed, in the context of digital economy and online platform work. At micro level, the concept of individualism is considered. At social level, changing social roles are described. In the last part, the article focuses on transformation of modern state and public expectations.
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Prohibited agreements as an unauthorized form of competition in competition law in our country are regulated by the Law on Competition of Bosnia and Herzegovina (“Official Gazette of Bosnia and Herzegovina”, No. 48/05, 76/07 and 80/09, hereinafter referred to as BiH Competition Law) , and it is the same regulated issue of the appearance of these agreements, the permissible exemptions, the consequences of prohibited agreements, the procedure of initiating and conducting the proceedings, and establishing the existence of prohibited agreements as well as sanctions for the same. These agreements are also called monopoly agreements. The BiH Competition Law is almost entirely in line with EU regulations in this area, and this compliance stems from the fact that harmonization used the technique of “rewriting” European legislation. The subject of this paper is the presentation and analysis of legal sources of prohibited agreements as an unauthorized form of competitive action in competition law at the level of the European Union and at the level of Bosnia and Herzegovina.
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The development gap between the “Old” and “New” member countries of the European Union is an important problem challenging the efficiency and strength of the European single market. In this regard, a subsequent question arises: which actions in the policy making must be undertaken, by both national and supranational authorities, to stimulate cohesion in the EU and which directions should be followed? The present paper tries to answer this question considering the perspective of the Eastern European nations and their economic development premises analysing the aspects of governmental participation in the economy and the influence of entrepreneurship upon long run competitiveness. The research results explicitly underline that entrepreneurship in the Eastern European nations is a determinative driver of long-term economic competitiveness due to its favourable impact upon the formation of human capital, enhancement of innovation potential and overall intellectual resources of nations. The effects of governmental participation in the economy upon the economic growth premises are heterogeneous including on the formation of physical and intellectual capital. Consequently, it was reached the conclusion that the Eastern European Nations should prioritise entrepreneurship since it is capable of boosting human capital creation and, at the same time, they should improve the institutional quality to minimise the factors undermining the business including corruption and red-tape, etc. In such a way, the Eastern European countries can overcome, in the long run, the development gap with the Western EU states and raise their economic potential.
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