Political Business Cycles in Hungary

This morning I ran into this figure depicting government expenditures on education in Central Europe during the last decade. It is not the time for a detailed analysis, but something seems to be clear: in 2006, 2010 and 2014 these expenditures increased more or less in Hungary. The same four years between the pikes… In these years (i.e. 2006, 2010 and 2014) there were parliamentary elections in Hungary, so the government had intention of loosening the fiscal policy. What is more, after the campaigns, the reigning parties and the government returned to the previous fiscal policy and started to curtail these expenditures. In 2006, Hungarian Socialist Party, while in both 2010 and 2014 Young Democrats could form government.

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But the trend is more important: there is a clear downward trend indicating a long-term reduction in expenditures on education, irrespectively of the “colour” of the government. While Hungarian governments do their best to save money and, for them, education is one of the areas where this money can be saved, during election times governments tried to make the people believe in breaking the previous downward trend.

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