Redistribution instead of privatization

The fate of the state assets between 1998 and 2001

The government has lacked a clear privatization policy since the summer of 1998. Retrospective analysis, based on official publications and press statements from the central asset management authority and conversations with other participants of the process, suggests that earlier trends have altered in many respects since the parliamentary elections in 1998. The assets of State Holding Company (SHC) have increased instead of decreasing. SHC has consumed rather than increased public funds and its main activity has become extra-budgetary redistribution of state revenues. The author assumes this does not derive from any comprehensive, secret plan. The strongly centralized decisions have been driven by short-term political interests, by creative interpretations of several experiments, and in some cases by constraints or by their absence. The events and their results in the field of state asset management reflect well the ideas and behavior patterns of the government, also applied in other economic and political areas.

Közgazdasági Szemle ? Economic Review, XLVIII. évf., 2001. September pp. 726 - 744.