Abstract

This paper systematically evaluates patterns of change in socio-economic models in Hungary and Slovakia, highlighting the role of state in the process. While the cases share general similarities in their type of capitalism, a closer overview of institutional domains reveals that important differences exist in critical junctures, character of change and the role of key actors. In terms of the overall reform paths, Slovakian path especially since the late 1990s stands out to be more coherent and is overwhelmingly in a liberal direction, while Hungarian reforms appear less radical and encompass liberal elements but active state involvement in most institutional domains as well. The key difference in industrial policy that we select as exemplary institutional domain is that Hungary adopted a more comprehensive and vertical industrial support geared towards upgrading and introduced relatively early schemes aimed at the development of domestic SME sector. The Slovakian state was initially more subject to pressures from the local business groups and only after the turning point in 1998 adopted foreigners-favored approach and developed its industry more through regulation than a direct intervention, neglecting any attempt to nurture domestic bourgeoisie.