The Political Economy of State-Society Relations in Hungary and Poland

The history of Hungarian reformism suggests that Lenin was right. We need only recall how reformist leaders, particularly during the period of the New Course, manipulated Marx's and Lenin's own words in order to justify official deviations from socialist dogma. But how words become deeds is neither a linear process nor a matter of pure political will. As Douglass North has argued, any attempt at purposeful change of a system must build incrementally on the “mental models” already embedded in the organizations comprising that system's broader institutional framework. At the same time, agents of innovation must also exploit windows of opportunity that can close as swiftly as they open. If innovators move too quickly or brazenly, they are likely to provoke counter-moves that block or even reverse their agendas. If they move too slowly or timidly, they risk wasting advantageous circumstances that might never again present themselves. A political-discursive strategy that gives reformers a hold on both the scope and pace of change is an essential part of success.

In 1982, Hungarian reformers managed to bring about a broad institutionalization of private entrepreneurship precisely because they devised and successfully deployed just such a political-discursive strategy. By drawing on the legacies of prior reform experiments, they set out to reinterpret the official ideology's building blocks, thus taking a seemingly “incremental” approach to the transformation of the dominant “mental model.”