A Long Way to Go: The Hungarian science and technology policy in transition

Central European countries highlight the importance of institutions as they are of somewhat different nature in this diverse group of countries, given their different history. Briefly, before World War II there was a market economy in place in Central Europe – as opposed to most Eastern European countries and former Soviet republics – based on private property. These economies were linked to the wider European economic space via foreign trade, subsidiaries of, and joint ventures with, foreign firms operating there and subsidiaries of Central European firms active abroad. Then they went through the planned economy period and right now the transition process. As three rather distinct socio-economic systems and their impacts on the national system(s) of innovation can be observed in these cases, it is a ‘living’ laboratory where evolving institutions, including re-emerging old ones, can be explored. Thus it seems worthwhile studying these cases in-depth as they might provide a number of important, perhaps eye-opening, lessons for more general theorising. This chapter analyses institutional changes in Hungary from the point of view of science and technology (S&T) policy by pulling together some recent theoretical developments in the economics of innovation and a fairly descriptive approach. The underlying question is whether it is possible to devise a coherent, feasible S&T policy and implement it in an efficient – or at least a satisfactory – way in a transition economy, or whether S&T policy, together with other major institutions, is also evolving. In other words, is S&T policy an outcome of conscious, well-designed and co-ordinated efforts in this period (can it be?), or should it be seen as a resultant of deliberate and unintended consequences of actions and interactions of a host of actors? Theories and models of innovation as theoretical foundations for S&T policy are briefly outlined in section 2. Then section 3 describes the legacy of central planning in Hungary. Recent changes in the ...