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Hungary ECONOMIC SYSTEM AND CONTROL MECHANISMS
In the late 1940s, Hungary's Marxist-Leninist leaders
imposed
a Soviet-style command economy that included rigid central
planning, agricultural collectivization, and rapid
industrialization
(see Postwar Hungary
, ch. 1). Faced with
the
need to improve efficiency in the late 1960s, however, the
government undertook an economic reforms and in 1968
introduced
the New Economic Mechanism (NEM), which eliminated
compulsory
plan directives, introduced market mechanisms, allowed
many
enterprises a measure of autonomy, and legalized a narrow
range
of private economic activity. The reform stalled between
1972 and
1978, but trade imbalances and other problems prompted the
government in 1979 to begin implementing a second wave of
reforms
that included ministerial and industrial restructuring.
These
reforms to a great degree differentiated the Hungarian
economy
from a traditional command economy. The Hungarian
Socialist
Workers' Party (HSWP), however, has retained its monopoly
of
political power, and a central plan containing broad goals
still
existed in 1989. After Kadar's resignation as general
secretary
in May 1988, Hungary entered a new era that may see more
energetic implementation of reforms already on the books
and the
enactment of even more radical reform measures.
Data as of September 1989
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