Petőcz Kálmán (szerk.): National Populism and Slovak - Hungarian Relations in Slovakia 2006-2009 (Somorja, 2009)

Zsolt Gál: Argentina on the Danube - Populist Economic Policy as the Biggest Enemy of Sustainable Economic Growth

Argentina on the Danube...

that in Sweden in 1989 (Kornai, 1998, p. 84). This further strengthened his earlier opinion that Hungary had become a “prematurely evolved welfare state” that finances social transfers beyond its means and has a similar redistribution rate and welfare spending as countries that often surpass Hungary in terms of economic development.

The ratio between people financed by the market and those financed by the government may perhaps explain the demand for populist economic policy, more concretely the demand for increased public expenditures on the part of groups that “live off the state budget”. The measures adopted by the Hungarian administration comprising socialists and free democrats between 2002 and 2006 (e.g. introducing the 13,h annual pension and the 13,h annual salary for public servants, a 50-percent increase in salaries within the public sector and a 50-percent increase in allowances for people on parental leave) perfectly demonstrate this hypothesis; in fact, the populist handing out covered all principal categories of the government-financed population.

The following table illustrates the ratio of persons paid from private and public sectors in three Central European countries. Due to different social security systems, different statistical methodologies and different time frameworks, the numbers do not always allow for a totally precise comparison; however, they roughly show the ratio between the two principal categories.

Table 4

Number and ratio of persons paid from private and public sectors in the Czech Republic, Slovakia and Hungary in 2008 (,000)

Czech Republic

Slovakia

Hungary

0. Total population

10,430

5,412

10,045

1. State administration and services (public sector)

727

485

722

2. Pensioners

* 2,754* 1,266

3,027

3. Unemployed **

325

230

477

4. People emploved in employment programs

14

» 11

14

5. People on sickness benefits ***

237

97

90

6. People on parental leave ***

358

134

259

7. Categories 1 through 6 total

4,415

2,223

4,589

8.1. Total emploved **»*

5,002

2,434

3,849

8.2. Emploved in the private sector

4,275

1,949

3,127

9. Ratio of categories 7 to 8.2

1.03

1.14

1.47

Note: The data are rounded and represent average values for 2008 in thousands (except line 9), unless specified otherwise. * As of December 31, 2008. ** Number ofjobless registered by employment agencies. *** Data for Hungary are from 2007. **** Data provided by Targeted Labour Force Surveys carried out by national statistical bureaux in the 4Q 2008.

Sources: Czech Republic: Czech Statistical Office (lines 0, I, 5, 8.1), Czech Social Security Administration (line 2), Ministry of Labour and Social Affairs (lines 3, 4): Slovakia: Statistical Office of the Slovak Republic (lines 0, I, 3, 8.1), Headquarters of Labour, Social Affairs and Family (lines 4, 6), Social Insurance Company (lines 2, 5); Hungary: Central Statistical Office (lines 0, I, 3, 5, 6, 8.1), Central Directorate of Pension Security (line 2), State Employment Agency (line 4).

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