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Hungary-Role of Party and Government Bodies

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Hungary Index

As of mid-1989, the HSWP was the dominant political institution in the government and the ultimate authority on all political, economic, and social issues (see Hungarian Socialist Workers' Party , ch. 4). The party's leading organs passed resolutions that functioned as basic guidelines for government bodies making economic decisions, and party leaders also exercised formidable informal influence. Primary authority lay with the Politburo and the Secretariat (particularly the latter's committee for economic and social welfare policy, the working group for economics, and the department for economic and social welfare policy). In the 1980s, the party assumed a lower profile in economic decision making than it had before the reform, and it consulted more with ministers, enterprises, and other government and economic organizations.

The Council of Ministers was the government's highest administrative decision-making body. Its State Planning Committee concerned itself with long-term economic issues. The council's Economic Committee oversaw the economy's day-to-day operation (see State Apparatus , ch. 4).

The government consolidated the ministerial structure in the late 1970s and 1980s in order to reduce the ministries' influence on managers of enterprises. In 1989 four branch ministries-- industry, agriculture and food, construction, and communications- -set policy, assisted in allocating resources (especially investments), promoted development, and ensured achievement of export targets. Hungary's functional ministries were the Ministry of Finance and the Ministry of Trade. The Ministry of Finance supervised the banking system and worked out many of the economic regulators that guided the economy. The Ministry of Trade developed and implemented foreign and domestic trade policy, granted export and import licenses and certain subsidies, and controlled the balance of payments.

The National Planning Authority and the National Price Office acted much like functional ministries. As with traditional centrally planned economies, the National Planning Authority was one of the most powerful economic organs in the government. It participated in almost all of the central government's economic decision making, and its chairman presided over the State Planning Committee. After the NEM was instituted, however, the planning authority has focused primarily on medium- and long-term planning. Prices were supposed to reflect "justified" costs, and enterprises had to report price increases to the National Price Office, which could intervene formally or informally if it deemed a price increase unjustified. With the Council of Ministers' approval, the National Price Office could issue administrative commands to enterprises in case of actual or possible economic disruptions. However, the National Price Office usually used persuasion or adjusted one of the economic regulators to implement its decisions.

In the late 1980s, to oversee economic policy the National Assembly had committees on planning and finance, industry, agriculture, and commerce (see National Assembly , ch. 4). The assembly's role in economic policy making was growing, but it was still far less important than its Western counterparts.

Data as of September 1989

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