The Post-Liberal Laboratory: Sixteen Years of Orbán’s Hungary (Kaiser Bauch, 2/25/26, LEO)
[I]t is important to acknowledge that the period between the financial crisis and COVID was a great economic time for the whole East-Central European region, propelled mostly by advantageous global conditions. The post-communist EU member states were all growing rapidly—on average about 3.2%.
While Hungary grew above the average and was among the top performers, the problem is that Hungarian growth was driven primarily by rising employment and hours worked. ‘Orbánomics’ was based on attracting foreign capital investment into factories, mostly but not exclusively in automotive, to create jobs. In this, Hungary was successful, yet this growth model—which economists call ‘extensive’ rather than ‘intensive’—started to break down around 2019, before the COVID crisis hit.
It is a model that requires more and more capital and more and more additional labor every year to maintain economic growth. Yet the Hungarian labour force is declining and the country started to experience labour shortages. Moreover, if one looks at labour productivity growth measured as GDP per hour worked in the same period (2013-2019), Hungary was among the worst performers in the region—growing 1.7% on average while the regional average was 2.3%. It also had by far the biggest mismatch between labour productivity growth and GDP growth—meaning that this growth was not sustainable unless the labour force (or working hours) continued to expand. But more on that later.
Since COVID, things have only gotten worse.
At the End of History, there is no viable alternative to liberalism.