A System with Dominant Regulatory Regimes
As in chapter 11 we proceed to establish structural, behavioural, and competitive characteristics for a system dominated by the regulatory regime. Such a regime is aimed at by the Hungarian economic reforms of 1968 and is called “The Hungarian Economic Mechanism”. Compared to the “old” system characterized by the government directory regime and by a target planning governance the enterprises have acquired substantial autonomy in decision-making about transactions. The basic idea is to use a number of regulators at the government level in such a way as to generate a specific behaviour of enterprises. This behaviour generated by the system of central regulators should, in the first place, ensure the fulfilment of the national economic plan. Note that the objectives of this plan have no obligatory character for the enterprises. The regulatory devices, therefore, should be fixed so as to elicit the fulfilment of plans by enterprises in their own interest. Moreover, it is supposed that the decision-making autonomy of enterprise managers will lead to a re-introduction of competitive markets.
KeywordsRegulatory Agency Technological Progress Enterprise Manager Hungarian Condition Real Marginal Cost
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