The Return of Economic Nationalism? A Comparative Study of the Politico-Economic Policies Pursued By Hungary and Romania after the 2008 Global Economic Crisis

Adam Fabry, Cornel Ban

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Abstract

In recent years, we have witnessed a resurgence in economic policies that claim to prioritise ‘national interests’ over international integration and cooperation. Examples include the imposition of tariffs foreign goods and politicians (US), withdrawal from international organisations and treaties (Israel, UK, US), more restrictive immigration policies (Australia, most EU states, US) and controls on foreign direct investment (EU, US). Such moves have caused liberal economists, mainstream politicians, and pundits to raise alarm bells about the alleged ‘return of economic nationalism’.
This paper contributes to ongoing debates on economic nationalism and illiberalism by analysing the economic policies pursued by the governments of Hungary and Romania in the wake of the 2008 global economic crisis. Since being catapulted back into power in 2010, on a popular backlash against austerity, the national-conservative Fidesz government, led by Viktor Orbán, has pursued ‘unorthodox’ economic policies in order to boost economic growth and defend national sovereignty. For example, the Fidesz government has introduced special ‘crisis taxes’ on banks, large retail companies, and telecommunications companies (all of which are foreign owned), centralised the country’s private pension system worth more than $14 billion), and promoted the expansion of Hungarian investment in neighbouring countries. While such moves have been criticised by neoliberal organisations, such as the EU and the IMF, they have taken little concrete action against the Orbán regime. Romania, in contrast, played a more economically orthodox card until 2017, when the rise of a left-nationalist economic faction inside the ruling Social Democrats ushered in more wage-led growth and adopted, half successfully, financial repression measures that included a Hungarian-style tax on bank assets. Unlike in Hungary, this was a short-lived project, with greater political contestation ushering into government neoliberal political forces that rolled back the left nationalist offensive.

Employing a critical political economy approach, the paper asks to what explains the return of economic nationalism, and to what extent nationalist economic policies represent a break with neoliberal common sense, or whether they instead rearticulate it, producing a specific variety of neoliberalism that skilfully combines the central tenets of neoliberalism with authoritarian measures.
Original languageEnglish
Publication date2020
Publication statusPublished - 2020
EventSASE 32nd Annual Conference 2020 - Virtual Conference: Development Today: Accumulation, Surveillance, Redistribution - Virtual, Amsterdam, Netherlands
Duration: 18 Jul 202021 Jul 2021
Conference number: 32
https://sase.confex.com/sase/2020/meetingapp.cgi/Home/0
https://sase.org/event/2020-amsterdam/

Conference

ConferenceSASE 32nd Annual Conference 2020 - Virtual Conference
Number32
LocationVirtual
CountryNetherlands
CityAmsterdam
Period18/07/202021/07/2021
Internet address

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