Document Type

Dissertation

Degree

Doctor of Philosophy

Major

Political Science, International Politics

Date of Defense

8-12-2005

Graduate Advisor

Kenneth P. Thomas

Co-Advisor

Carol Kohfeld

Committee

Scott H. Decker, Ph. D.

Lyman Tower Sargent

Andrew Sobel

Abstract

The study analyzes the continuity in economic and business development in Hungary and Russia from command economy to market. It consists of two parts.

The first part presents an overview of historical development of the planned economic system in Russia and Hungary with the emphasis on two issues ¿ how the system came about and what kind of reforms had been introduced prior to its collapse. The first issue is addressed to demonstrate that the communist regime in either country was not simply imposed on it by some ideologically driven group, in the case of Russia, or by the Soviet Union, in the case of Hungary. The analysis demonstrates that the system was born out of political, economic, and historical circumstances of the time and was subsequently developed differently in each country according to each country¿s specific circumstances and cultures. The second issue is addressed to demonstrate that as a result of these differences, the economic mechanism in Hungary significantly diverged from the Soviet economic mechanism, and that by the 1980s, before the transition to the market started, the Hungarian economy was already saturated with the elements of the market and had laid a foundation for the legal private sector and private initiative.

The second part of the paper presents a qualitative analysis of the results of a survey of managers of industrial enterprises in Hungary and Russia. The main findings of the survey demonstrate that: Hungarian enterprises are more market oriented than Russian enterprises; the institutional environment within which businesses operate affects the work of Hungarian businesspeople, but has very little presence in the life of Russian businesses; economic and political events of the last decades, including the change of regime, have had little or no influence on the life of Russian businesspeople and enterprises, but have played an important part in the life of Hungarian businesspeople and enterprises.

The study concludes with linking the results of the survey to the historical analysis and shows that the differences in the respondents¿ answers can be largely explained through the prism of the countries¿ unique historical developments.

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