Orbán’s Illiberal State
My Cato podcast with Johan Norberg
This week on the Cato Podcast, I interviewed my colleague Johan Norberg about his new paper, How Viktor Orbán’s Hungary Eroded the Rule of Law and Free Markets.
A taster…
On Orbán’s vision of government:
Orbán had previously said during his time in opposition that we have only to win once, but then properly. But because if we win properly, then we will be in a position to be in charge —to rewrite the constitution— and that's what they did. He said explicitly that checks and balances have only meaning in countries like the United States, it's a US invention that for some reason of intellectual mediocrity European countries have adopted. He wanted complete power for parliament and the government that the parliament has elected. So he started doing this, and changing the system accordingly. Fidesz, his party got a two thirds majority, it made it possible for them to rush through a new constitution through parliament in a very short time without any consultation.
On Hungary’s economic performance:
economic growth in Hungary has actually been below average of post-communist EU countries. They used to be richer than Poland. The average Polish citizen is now 11% richer than the average Hungarian, and the Polish are as rich as the Japanese, while Hungary is lagging behind. Countries like Romania, Bulgaria, Croatia, they've grown faster than Hungary, so it doesn't seem to work, even though they've received some 4% of GDP annually in EU funds. So you have to start to wonder what, where did that money end up?
On economic policy:
We could call it crony capitalism, but I'm not even willing to call it capitalism because it assumes some sort of market exchange. But this is a system where economic success is dependent on proximity to power, and it's not just an unintended consequence of lots of EU money lying around or of post-communist or anything like that, this was an explicit project. Viktor Orbán said that early on that he thought that one of the mistakes of previous center right governments in Hungary was that they didn't build their own system of loyal capitalists.
On efforts to boost fertility:
Since 2021, the fertility rate has declined every year. So the latest estimate from the Hungarian Statistical Office is that it's back to 1.31, the fertility rate, one of the lowest in central and eastern Europe and births are now the lowest on record in Hungary. And this tells me that subsidizing births, even if you go to such lengths, 5.5% of GDP, it might give you an initial bump because people bring births forward in response to the subsidies, but it doesn't change the basic fact that they don't want more children over their lifetimes. So you just delay the decline in the fertility rate. So if even 5.5% of GDP annually does not have an effect on the fertility rate, it seems like there's something fundamentally wrong with this idea of subsidizing births.