The structure of the Hungarian banking market - concentration, segmentation, income polarization

Éva Várhegyi

The Hungarian banking system has not developed in the course of a spontaneous process. The reform process of several decades, aimed at the liquidation of the earlier mono­bank system, has not eliminated the distortions deriving from the inherited structures and the artificial division of the market till our very days. This has several consequences which prevent the development of a healthy competition and slow down the emergence of a viable market structure. The article investigates the manifestations of power relations developing on the Hungarian banking market, the causes and tendencies of their coming about through presenting concentration, segmentation and income polarization. On the basis of the processes having taken place until now it outlines the medium­term expectable tendencies of spontaneous developments on the banking market.

Labour market supply of the unemployed - evaluation of the indicators of unemployment

Péter Galasi

The paper aims at studying willingness to work of the Hungarian unemployed. Unobserved market labour supply as an indicator of willingness to work is estimated for both the unemployed and the non­employed. First, using Oaxaca's decomposition, difference in total work hours between ILO unemployed and employees is examined. The average employee works almost twice as much as the average unemployed individual and an overwhelming part of this difference is attributable to the exclusion of the unemployed from the market for paid labour, therefore the unemployed would like to work almost as much as the employees do. Second, market labour supply for the non­employed is estimated by imputing paid work hours for each non­employed person with the help of a work hours equation estimated for employees. Results are consistent with the previous estimation for the ILO unemployed, that is that, on average, they have a considerable labour supply. Both estimations support the view that unwillingness to work can be excluded from the primary reasons of unemployment, therefore an active unemployment policy might play a role in removing the obstacles standing in the way of their employment. Third, relative performance of different unemployment measures are considered with the help of estimated labour supply. ILO unemployment's performance is not bad but registered and insured unemployment can more successfully identify non­employed persons with strong willingness to work.

On the problems of stabilizing agricultural prices

Imre Fertõ

Stabilization of the agricultural prices is one of the most important aims of the Hungarian agrarian policy. The economic theory investigates the impacts of price stabilization on both micro- and macroeconomic levels. The theoretical findings show that there are no satisfying arguments in favour of prince stabilization. Also the experiences of developing countries support that the practice of stabilizing agricultural prices has had limited success up to now.

Public policy analysis

László Urbán

The theme of the paper is public policy analysis as a professional field of activity of preparing political decisions. For the actors of business life the environment of regulations shaped by political decisions (the public policy) is, beside the market mechanism, such a determinant system of conditions with which they have to comply. Under a democratic political system this political regulation does not diminish, it rather gets modified. As a matter of fact, countless social actors make continuous efforts at finding some redress for the violation of their interests, at prompting the political decision­makers - who are anyway specialized in making such public policy decisions on regulation - to take some public policy measure. At the same time, political decision makers in Hungary today take decisions on modifications of the regulating environment without taking into account the costs involved by their decisions.

The public policy analysis considers its task to inform political decision­makers about possible alternative decisions on regulations suited for handling some social problem and about how the eligible modes of handling can be compared as to their expectable social costs and benefits. The responsibility for choice and decision remains with the politicians, yet the expected effect on the allocation of resources may become an important factor in influencing the decisions.

The compensation note: the Jolly Joker of the Hungarian capital market

Márton Radnai

The compensation note has been one of the most interesting developments on the capital market in recent years. It is now one of the most liquid securities on the stock exchange. It is a unique financial instrument, unprecedented in this form by international comparison. Thus, also the literature on the subject is extremely poor, it is mostly made up of newspaper articles. The study has a double purpose: on the one hand it surveys the history of the compensation note, and on the other hand it makes an attempt at working out a few simple economic models for its analysis.


Reforms of telecommunications

Krisztina Heller

The article interprets and evaluates the situation developing in the course of the reforms of telecommunications in Hungary. Analysing the present, the conclusion is that today everything is given for successful telecommunications: demand, capital and up­to­date technology. From among the possible solutions it is probably the present situation that hides in itself the greatest development potential. An important element of the situation is that privatization also meant the privatization of business risks, thus the consequences of possible weaknesses of the solution are borne in the first place by the entrepreneurs. (Of course, the entrepreneurial failures have, in the last resort, a disadvantageous impact on the consumers as well.)

From the aspect of the future, the situation cannot as yet be judged unambigously. Considering the technological and international trends, it has to be expected that the present situation will not stand the test of the future and, in consequence of the built­in dynamisms (privatized risks) it is bound to change further. The key to further development is likely to be how the state will find its adequate role in regulation and in handling the partly objective and partly not necessarily arising problems and whether it will be capable of channelling the expected movements on the telecommunications market into the general trends.