TY - UNPB

T1 - Product Market Competition and Economic Performance in Hungary

AU - Gjersem, Carl

AU - Hemmings, Philip

AU - Reindl, Andreas

N1 - Identification number: ECO/WKP(2004)4

PY - 2004/3/2

Y1 - 2004/3/2

N2 - The establishment of competitive markets has been one of the cornerstones Hungarian economic policy over the past decade, alongside a successful strategy of attracting foreign investment. Broad statistical measures show no signs ofendemically weak domestic competition, though the country’s relatively low productivity among domestic business likely signals some sheltering from international competition. The generally healthy level of competition is partly because competition legislation and its enforcement are of a good standard. Nevertheless, room for improvement is suggested in a number of areas. In particular, it is argued that individuals should be able to initiate legal actions directly, i.e. without having to proceed via the competition authority. And, it is suggested that sanctions against individuals in hard-core cartel cases areintroduced. In examining specific sectors, this paper is critical of the pace of progress towards competition in the network industries. The rail network, for instance remains fully state-owned and run. And, problems remain in those industries which have been privatised and opened up to competition. In particular there are instances of continued regulation of consumer pricesas well as state ownership or influence on other aspects of supply chains which contributes to a dominance of incumbentproviders. Concern is also expressed about competition levels in some other areas of the economy. In particular, professionalassociations are judged as often having some rules and regulations that excessively limit competition and it is concluded that onEU membership, the size and structure of agricultural subsidies may not induce rapid restructuring. This paper is part of theOECD’s 2004 economic survey for Hungary and is one of a series of reviews on competition issues across OECD Membercountries.

AB - The establishment of competitive markets has been one of the cornerstones Hungarian economic policy over the past decade, alongside a successful strategy of attracting foreign investment. Broad statistical measures show no signs ofendemically weak domestic competition, though the country’s relatively low productivity among domestic business likely signals some sheltering from international competition. The generally healthy level of competition is partly because competition legislation and its enforcement are of a good standard. Nevertheless, room for improvement is suggested in a number of areas. In particular, it is argued that individuals should be able to initiate legal actions directly, i.e. without having to proceed via the competition authority. And, it is suggested that sanctions against individuals in hard-core cartel cases areintroduced. In examining specific sectors, this paper is critical of the pace of progress towards competition in the network industries. The rail network, for instance remains fully state-owned and run. And, problems remain in those industries which have been privatised and opened up to competition. In particular there are instances of continued regulation of consumer pricesas well as state ownership or influence on other aspects of supply chains which contributes to a dominance of incumbentproviders. Concern is also expressed about competition levels in some other areas of the economy. In particular, professionalassociations are judged as often having some rules and regulations that excessively limit competition and it is concluded that onEU membership, the size and structure of agricultural subsidies may not induce rapid restructuring. This paper is part of theOECD’s 2004 economic survey for Hungary and is one of a series of reviews on competition issues across OECD Membercountries.

KW - Commercial law

M3 - Working papers

T3 - ECONOMICS DEPARTMENT WORKING PAPERS (ECO/WKP)

BT - Product Market Competition and Economic Performance in Hungary

PB - Organisation for Economic Co-Operation and Development

ER -