The Pre-1989 Origins of Neoliberalism in Hungary

  • Adam Fabry


This chapter challenges exogenous accounts of the neoliberal transformation in Central and Eastern Europe (CEE) and the former USSR by analysing the gradual ascendancy of ‘proto-neoliberalism’ in Hungary before the regime change in 1989–90. Through a case study of the influential Financial Research Institute (Pénzügykutatási Intézet, FRI), the official research institute of the Ministry of Finance, and an in-depth analysis of ‘Turnabout and Reform’ (Fordulat és Reform), a document published in 1987 by a group of radical reform economists associated with the FRI, the chapter looks at how they interpreted the deepening crisis of the Kádár regime and what methods they employed in order to reorient reform debates along neoliberal lines. The chapter demonstrates that neoliberalism was not an ‘imported project’, which arrived ‘from the West’ on the eve of the transition, but rather a largely ‘home-grown’ programme, developing in dialogue between radical reform economists and reform-minded political elites. In this regard, the essential aim of the ‘neoliberal turn’ was to reconfigure the Hungarian economy in line with the exigencies of the capitalist world economy, while ensuring that the political transition went as smoothly as possible. While obviously a repudiation of past policy, policymakers in Budapest thus pursued similar objectives as central planners under ‘actually existing socialism’.


Financial Research Institute Hungary Market reforms Proto-neoliberalism State capitalist economies 


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Authors and Affiliations

  • Adam Fabry
    • 1
  1. 1.Centre for Study on Culture and Society National Scientific and Technical Research CouncilNational University of CórdobaCórdobaArgentina

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