State Capitalism in Poland and Hungary

Abstract

Abstract We discuss the emerging economic systems of Poland and Hungary using the state capitalism approach and suggest some general lessons. We define state capitalism in the broad and narrow senses and propose six major manifestations of state capitalism of the populist variety, and five major state capitalism tools. Applying this framework to the post-Soviet, transition economies context, we discuss the origins of state capitalism formation in Poland and Hungary. We focus on specific features of the populist variety of state capitalism in these countries, including the relative importance of political capitalism, oligarchy, and the use of state-owned enterprises (SOEs) as the source of rents, as well as the varieties of state control over the enterprise sector. We point out that the specific economic policies implemented in the two countries are conditioned by the past. We also underline the discrepancy between the features resulting from post-communist path dependence and the contemporary influences, mainly related to the membership of both countries in the EU.