Usurping Social Policy: Neoliberalism and Economic Governance in Hungary*

Abstract

This paper takes issue with arguments emanating from the global social policy literature that neoliberal policy agendas have been largely a consequence of the interplay of international agencies with indigenous reform interests. While relevant, such arguments grasp only part of the story of social policy change. By means of a case study of Hungary between 1990 and 2002, this article emphasises the role played by the bureaucratic reconstitution of the state and changing forms of national economic governance in the explanation of social policy change. We show how the bureaucratic redesign of the Hungarian state generated a ‘finance-driven’ form of economic governance with the state bureaucracy reconfigured around the fiscal control of the Finance Ministry. These changes had significant implications, not simply for social expenditure, but for the intellectual nature and bureaucratic space for social policy-making. Whereas critiques of neoliberal social policy reform tend to focus on the ideological nature of the projects, this analysis highlights the need to develop visions of, and arguments for, an alternative to the finance-driven forms of economic governance that have become the de facto bureaucratic archetype for re-designing welfare states.