Modern model of hungary's approach towards foreign capital in the context of a "patriotic Turn"

Abstract

Modern Hungary seems to move away from the pre-crisis trajectory towards a less liberal course (the so-called "illiberalism"). Since foreign capital plays an important role in Hungary's development model, it is useful to to analyze how changes in the country's policy can affect the attitude to foreign capital as one of the backbone factors of country's economic development. The study showed that the economic poli-cies of the incumbent government is characterized by absolutely unorthodox instruments, which helps Hun-gary to pursue a more independent economic course as well as to not "scare off" foreign investors. At the same time, the attitude to foreign capital has not changed significantly, otherwise this would mean a funda-mental change in the development model, which seems almost impossible, given the dominance of foreign capital in the whole economy and in certain key sectors. At the same time, a departure could be seen from the long-term post-reform trend of reckless stimulation of foreign capital inflows towards a more balanced and cautious approach to the import of foreign investment from the government and economic agents. Authors argue that the increase in certain taxes in the banking sector was caused not so much by the desire to "get rid" of the dominance of foreign capital as by supranational requirements for the implementation of effective budget consolidation.