No abstract

The paper evaluates the convergence paths of Central and Eastern European member states of the EU during the 2010s, when the main task for these countries was avoiding the middle-income trap—when wages are not so low anymore to compete with less developed countries, while innovation is not developed enough yet to compete with developed countries. Using various statistical indicators, the paper shows that while most countries in the region have been on a convergence path during the decade under analysis, not all succeeded in avoiding the trap. While some countries successfully implemented policies to step on the path of productivity- and innovation-led growth (Czechia, Slovenia, Estonia, and Lithuania), in several other states, growth was supported mainly by low costs and loose monetary conditions including significant transfers from the EU. The comparative analysis of Estonia and Hungary illustrates the different growth models and shows how the institutional system plays a key role in exiting the trap.

győrffy dóra felzárkózási pályák Kelet-Középeurópában két válság között A tanulmány fő célja 11 kelet-közép-európai ország (EU11) 2010-es évekbeli fejlődési pályájának a bemutatása. A szerző abból a feltevésből indul ki, hogy ebben az időszakban a fő feladat a közepes jövedelem csapdájának nevezett jelenség leküzdése volt. Leíró statisztikai eszközökkel mutatja be, hogy bár szinte mindegyik régiós ország felzárkózási pályán haladt, a követett gazdasági stratégiák jelentősen különböztek egymástól: míg a régió egyes országai sikeresen állnak át a termelékenység-és innovációvezérelt növekedési pályára, más országokban továbbra is a költségelőny és a kedvező pénzügyi feltételek tekinthetők a növekedés elsődleges hajtóerejének. A tanulmány Észtország és Magyarország példáján keresztül illusztrálja az intézmények jelentőségét az eltérő gazdasági stratégiákban.* Journal of Economic Literature (JEL) kód: O43, O52, P52.* a tanulmányhoz fűzött értékes észrevételekért a szokásos megszorításokkal köszönettel tartozom Csaba Lászlónak és két anonim lektornak.1 a 11 vizsgált tagállam: Bulgária,

The obligation to introduce the euro is widely assumed to provide incentives for fiscal consolidation in the new member states of the European Union. Without questioning the general validity of this thesis this article calls attention to the potential for an opposite effect and the possibility of exacerbating rather than reducing the deficit bias in these countries. The argument proceeds in three steps. First, it shows that, given a weaker institutional environment in emerging economies, the new member states of the EU are particularly prone to deficit bias. Second, the incentives from the EMU are analysed and the potential moral hazard problem is identified for the current members as well as the candidate states. Third, a closer examination of Hungarian fiscal policy developments between 2002 and 2005 illustrates how weak institutions and strong market confidence can result in excessive deficits. The main implication of the article is that without complementing the EMU fiscal framework with mandatory procedural rules at the national level the deficit bias is unlikely to be eliminated in the new member states, which could result in considerable imbalances after these countries join the euro zone.

The recent admission of Slovakia into the Economic and Monetary Union (EMU) stands in sharp contrast with the considerable difficulties faced by Hungary with the fulfilment of the Maastricht criteria. This is a puzzling development for two reasons: first, during the early phase of the transition process Hungary was ahead of Slovakia, and second, the high level of political polarisation and general public disillusionment are shared characteristics of the two countries and not conducive to reforms in either case. In order to address these contradictions a theoretical framework is developed examining the conditions of structural reforms in a low-trust environment, where promises about long-term benefits for short-term costs are not believed. After the identification of three potential factors — perception of crisis, emergence of credible reformers, elite consensus — that can help to overcome the gap in credibility, the theoretical framework is applied to the transition history of the two countries. It is shown that while in the past decade all three factors had been present in Slovakia, the former success of Hungary strongly contributed to the absence of such special circumstances. The continued divergence of the two countries, however, cannot be taken for granted as in both cases reform cycles rather than sustainable progress can be observed. In order to ensure sustainability the difficult tasks of consensus- and trust-building cannot be avoided.