View metadata, citation and similar papers at core.ac.uk brought to you by CORE Poverty and the Traps of Postcommunist Welfare Reforms in Hungary: The new challenges of EU-accession JULIA SZALAI* Izvorni znanstveni članak Institute of Sociology UDK: 364.2(4-67:439) Hungarian Academy of Sciences Primljeno: prosinac 2005. Budapest, Hungary During the transition and accession process in Hungary the questions of the fairness and efficiency of the welfare arrangements came to the forefront of public discussions and political contestation. The key questions concerned the type of welfare state arising on the ruins of the old state-socialist regime. The author investigates whether new welfare state resembles any of the “three worlds of welfare capitalism”, what is the role of the EU in their formation, and whether differences are merely a matter of the level of economic develop- ment or deep-rooted systemic causes and policies. The first part of the paper outlines competing visions on the transformation of the socialist state and it is followed by the presentation of ideological and political arguments standing behind the implemented measures in the field of social policy and the wider role of these measures in overall economic transformation. The author argues that the consequences of these measures in social policy, most notably increased poverty, though often considered as transitory, proved to be more permanent. Also, economic recovery has not brought the improvement of social services and local welfare assistance as expected. The second part of the paper offers a critical review of causes that brought about such a contrast between the declared goals and the actual results of the reform. The author argues that, contrary to the initial expectations of increased efficiency, batter targeting, and more social justice, the combined steps of funding cuts and decentraliza- tion of decisions failed to decrease poverty, while at the same time increased stigmatizing of recipients. The author concludes that Hungary’s recent devel- opments point toward the crystallization of a distinguishable fourth type of the welfare state developing more or less independently from the influence of supranational welfare arrangements of the EU. Key words: Welfare state; post-socialist welfare policy; poverty; ethnici- ty; racial/ethnic conflict * Julia Szalai, Hungarian Academy of Sciences, Institute of Sociology, Department of Research on the So- cial History of Social Policy, Uri u. 49, 1014 Budapest, Hungary, [email protected] 309 Rev. soc. polit., god. 13, br. 3-4, str 309-333, Zagreb 2006. Szalai J.: Poverty and the Traps of Postcommunist Welfare Reforms... INTRODUCTORY REMARKS new Western-type welfare state? If they Backed by the controversial experiences have: do the new structures resemble any of the decade-long history of post-com- of the “three worlds of welfare capitalism” munist transformation, a range of pressing so eloquently outlined by Esping-Andersen questions on the fairness and efficiency some 15 years ago (1990)? If they have of the prevailing arrangements in welfare not: are the departures merely a matter of came to the forefront of public discussions time and economic growth? Or, are there by the late 1990s in Hungary. The arising deep-rooted systemic causes, ill-shaped debates were fuelled by widely shared dis- policies, and sharp social conflicts in the appointments. Criticisms of the undimin- background of failing to fulfil the funda- ished insecurity of daily living, the unjust mental functions of welfare in compromis- and lasting sacrifices that “ordinary people” ing labour and general well-being, regulat- have had to make in the coupled processes ing and controlling inequalities, and provid- of marketization and privatization, and also ing the necessary safeguards to prevent so- for the evidenced incompetence of the new cial exclusion and political disintegration? democratic institutions of governance to Are the deplorable records of the Hungarian halt the unstoppable growth of inequali- welfare state due solely to the unfavourable ties and the spreading of deep poverty all external conditions of the otherwise press- around have become increasingly sharper. ing task of economic adjustment, or does The preparation for accessing (since then: one have to seek the explanation in the joining) the European Union has turned retardant historical heritages and binding these accusations to acute political conflicts structural deficiencies still at play? about the envisioned scope, role, and com- It is perhaps needless to argue at length petence of the country’s future “European- why these questions are of great importance ized” state. With an eye on the inescapable for the theoretical and political concerns structural reforms, and at the same time, alike. As to the theoretical implications, by well aware of the current limitations on exploring the deep-rooted causes behind the maneuvering, politicians, policy-makers, prevailing massive socio-economic segre- scholars and diverse vocal groups of the gation that proves resistant to any welfare general public have urged a thorough and policies for tackling poverty and social ex- critical exploration of the causes behind the clusion, studies of the post-communist wel- serious shortcomings of the near past in or- fare regimes can inspire the revision of ear- der to better navigate the country amid the lier assumed one-to-one relations between altered conditions of the enlargement. certain policies/measures and actual social The key questions brought up for con- development. Further, these discussions sideration are the following: What type can bring to the forefront a rather rich set of of welfare state has arisen on the ruins of formerly unidentified interests, traditions, the old state-socialist regime? What have customs and attitudes with a great and un- been the consequences of the unequivocally mediated impact on the shaping of welfare. claimed rapid institutional decomposition Thereby, they can significantly enrich our of the once omnipotent party-state with its scholarly understanding of the socio-politi- all-embracing domination over the lives cal, economic and cultural functions that of its subjects? Have the recently evolved welfare policies can convey much beyond democratic arrangements and the constitu- their ascribed professional roles. tional acknowledgement of basic citizens’ The political implications of the above rights concluded in the advancement of a short list of questions seem to be of equal 310 Rev. soc. polit., god. 13, br. 3-4, str 309-333, Zagreb 2006. Szalai J.: Poverty and the Traps of Postcommunist Welfare Reforms... importance. Whether the post-communist the future of the entirety of the “old conti- societies of East and Central Europe actu- nent” and beyond. ally develop toward fitting into one of the Obviously, the above questions and coveted models of Western democratic their broad implications cannot be explored capitalism, or they take their own route at once, and certainly not by a single author with meaningful departures – this is a mat- in a single paper. My aim is much more lim- ter with far-reaching consequences beyond ited here. Through the study of the Hungar- the boundaries of the affected nation states. ian developments of the past decade and a After all, unmet social rights, socio-eco- half, I will present a case with lasting de- nomically founded sharp discrimination in partures from the classical paths of welfare practicing political rights, rapidly expand- state formation where the deviations can be ing economic and social marginalization, studied in their making. As I will argue, and the subsequent endangerment of social the root of the departures can be identi- cohesion in a cluster of societies beyond the fied in the unprecedented historical task of Elbe also have multifaceted implications converting the one-time party-state and its for the West. In the short run, the gradual planned economy to a modern democracy departure of Europe’s “new democracies” with the unchallenged domination of the from the main track of modern welfare market, and what is more, to accomplish state development – often conceptualized the swift conversion with one and the same by the Western public as “ethno-cultural 1 motion in all the decisive fields of political, otherness” – feeds Euro-skepticism and economic and social life. weakens the democratic attempts within the EU to speed up the integration beyond the Although the rapid decomposition of free flow of capital. In the longer run, the the old institutions was a unanimous claim departing “worlds of welfare capitalism” articulated by all the major political actors might end up in providing legitimization at the start of the transition, it has led, how- to policies on freezing (or, at least, seri- ever, to unforeseen troublesome results. The ously restricting) the free move of citizens, process has quickly turned to the desertion closing the “European border” before the of the state (Standing, 1997.), and simulta- eyes of migrants and refugees from the po- neously, to the strengthening of sharpened litically shaken and/or poorer parts of the social struggles over its remnants. A most world, and (re)creating the invisible walls serious consequence of these developments of separation much in ideological-political has been the evolvement of a dual structure concordance with the once so extensively with the increasingly deeper captivation of suffered cold war. In short, the direction in the coexisting corporatist and liberal drives