Ministry of the Economy and Commerce

Enlivening enterprises: the effects of state market creation and income redistribution, commissioned by the Ministry of the Economy and Commerce

2003 (Éva Voszka)

In the recent past and the present, state aid has once again become a key area of economic policy. Although the concept itself rarely appears, the main point in re-organisation, consolidation, promoting investment and developing small enterprises is the centralised redistribution of incomes. Redistribution is an essential feature of the growing number of comprehensive development schemes and plans: the Széchenyi Plan and the Széchenyi Enterprise Development Programme, Smart Hungary and the Europe Plan, the National Development Plan and the Comprehensive National Plan. For a majority of the state apparatus as well as public opinion, the most important element of Union accession was to obtain and utilise Community subsidies. The study first clarifies the conceptual framework, introducing the concept of the state creating a market. It also provides an estimation for the extent of redistribution. Following that, it explores the propriety of redistributing state income on the basis of experience gained during the fifteen years of transition. It casts light on the advantages and disadvantages of particular forms from the point of view both of the companies concerned and of the whole economy. It also maps the conditions of success and failure which can be generalised by placing special emphasis on the decision making mechanisms due to the assumption of a powerful effect on the consequences.