Development Paths on Europe's Periphery: Hungary's and Poland's Return to Europe Compared

The authors argue that the successful economic & political development of Hungary & Poland in the 1990s, in part, is due to their relatively favorable "communist legacy" including the continuous existence of their nations & states, their legacies of economic & political freedom; & the relatively modest distortions of their economies. In contrast to these similarities, it is mainly the differences of these countries' strategic choices & commitments after the collapse of communism that explain the divergence of their development paths. In the authors' view, Hungarian capitalism can be called "foreign-led" in the sense that most leading industries & services are oriented toward, & dependent on, foreign markets & finance, & are operated by foreign owners, typically multinational firms & banks. Poland, in turn, seems to have attempted a "national capitalist" trajectory. Unlike the Hungarian, the Polish economy is significantly less export-oriented, & relies much less on foreign direct investment & foreign ownership. Furthermore, at least during the period 1994-1997, the Polish state took responsibilities for a number of strategic sectors. Although this state-capitalist project crumbles down, it still significantly shapes the development path Poland is traveling on today. 58 References. Adapted from the source document.