Viktor Orbán promised a post-liberal alternative to the West's failures. After sixteen years, Hungary offers something else: proof that diagnosing problems is easier than solving them.
The only part of Hungary I ever looked into was its family policy, which I consider pretty disappointing.
As an example, if you have several kids then the mother doesn't have to pay income taxes. Sounds great right? But it's just the mother. There is no married filing jointly, no income tax benefit for the father. How many women with lots of children want to work a demanding high paying job? And isn't daycare for four kids really expensive and inefficient?
It would make a lot more sense to have a tax break for both spouses and then maybe they can make it work on the husbands income, but that isn't how Hungary works.
Which is sad because higher post tax earnings for men is basically the number one causation of higher fertility.
There are also benefits that penalize marriage and reward single mothers.
And then there are the various subsidies. If you don't want a particular kind of car or apartment or whatever the subsidy isn't worth it to you. Why not just pay cash?
In short it seems like the kind of thing a Soviet Planner would come up with. Micromanaged, inefficient, just throwing money at a goal.
I completely agree, even Orbán was not able to really go beyond the liberal dogma and go for tax breaks for men - also because it would hurt the budgets much more.
Agree that his ideological frame was wrong, but I honestly think it’s cheaper than free daycare (basically the least efficient way to raise fertility).
Some clarifications from a Hungarian. There ARE tax cuts for fathers as well. Total tax exemption was introduced only for mothers of 2+ children. You correctly pointed out that it sends a mixed message at best: you did well, but you are more valuable as workforce (in line with the mainstream capitalist/feminist zeitgeist). As for the subsidies: they were carefully constructed to not just be 'helicopter money,' and do not subsidize the improductive underclass (to say it tactfully). The previous socialist government was associated with free handouts which (accordig to some radical voices on the right) amounted to 'gipsy-breeding' - or to put it more politically correct, subsidized the welfare-dependent class at the expense of the productive middle class, without providing real breakout opportunities for the former.
Even though gypsies can't access some of these subsidies they are still heavily paid by the government, simply because they can't let their shitstain offspring starve.
If you mean the border fence, it is full of holes and there is an ongoing issue with gangs and human traffickers on the Serbian side shooting at the police for instance. Serbs are not happy of course, either.
As a hungarian, I am very happy and humbled that my favourite contemporary thinker has written a piece about us. Brilliantly, as usual. KB still GOAT.
Hopefully, we are finally going to conduct some fat-man-removal about a month from now, but that of course doesn't mean that things will be hunky dory in no time. In fact, our demographic situation alone suggests that the 2010s were the last chance for us to "catch up to the west" and we squandered it.
Hard to argue with the notion that Hungary under Orbán has not been hugely successful.
But this post significantly understates the degree to which Hungary's outcomes across the board are just as baked-in as its population decline.
1. Given Hungary's situation at the end of the Cold War--and the West's systematic looting of Eastern European capital in the 1990s and early 2000s--there is no way that Hungary was going to be anything other than an economic basket case for decades. That the country is doing as well as it has is no small achievement.
2. Orbán's options for "intensive" as opposed to "extensive" economic development have been severely limited by the fact that Brussels and the Eurocrats, as well as the entirety of the pre-Trump 2.0 US foreign policy establishment (and who knows what percentage of Biden- and Obama-era holdovers!), are all fanatically and irreversibly opposed to Orbán's Government. They have been waging an attempted Color Revolution there for years now. Seriously, what other reason could there be for Samantha Power showing up in Hungary in 2023? If Orbán loses the next election, it will be in no small part due to overt meddling by Brussels. The EU has voted to cut off all oil imports from Russia, scheduled to take effect three days after the Hungarian election.
In addition to simply swimming upstream against inveterate opposition, this has also just drastically reduced the potential for the kind of normal, beneficial economic relationships with other EU countries that one might expect. Yes, there have been some arrangements with German auto manufacturers. There could have been one heck of a lot more industrial integration than there has been if the EU hadn't treated Hungary like a plague victim. Orbán probably didn't want to turn to China for industrial investment, but the EU didn't really give him much in the way of options.
So no, I don't think that Hungary isn't really a "revolutionary success worthy of imitation," but that was never really in the cards. The more important point is that Hungary is not the US, nor even a Western European nation. What it needs, and what it can accomplish, are not the same as other countries.
The article seems a fair assessment of Orbanism. His main success seems to be managing immigration.
I would have liked to hear your assessment of his policies toward the press and education. It is difficult for an American of the non-MAGA right to assess how illiberal his attacks on the press and education are, since some of our supposed mainstream press judge reasonable reforms in these areas to be the end of democracy. My impression is that he crossed the line into actual illiberalism, but I can't be sure.
- Family policy sucks ass, and does nothing frankly
- Due to their voter base being mainly retired people, they just added the utter bullshit called "14th month's pension". Up to now, pensioners got a payment each month, plus a kind of bonus as a 13th month. Now there is a 14th one
- Under 25 you don't have to pay income tax. You may see where the issue lies with the increased welfare state and reduced income. Nonetheless the country keeps taking on loans, of course
- Loans upon loans to get ahead
- Same or worse discrepancy between salaries and property ladder
- Sold out country to Eastern powers (China, Korea) and subsidised them building atrocious, massive factories that poison the earth
- Former point happened on a lot of prime land for farming, and did the same via Western companies
- Built a fence during the migrant crisis, this has not been maintained. Also was not his party's idea, frankly
- Banking is heavily stealing from the people besides the average bullshit.
- Does not represent Hungarian interests in neighbouring countries
Basically, Orban is a jew, and all this is coming from that. People can't understand why he would not be with Hungarians, but fact of the matter is that you won't be represented by a racially different person. Case in point Western states too, or the council of Europe, EU etc.
It seems that if any nation is going to turn around its birth rate then it needs some sense of necessity. As you already touched upon with Israel’s exceptional birth rate as a developed nation, I believe that preventing demographic decline will require a sense of national crisis or shared vision. James Gelvin said it is better for a nation to have a national tragedy than a victory. The Battle of the Alamo and the holocaust are two historical events (while very different) that galvanize national pride because they are seen as tragic instead of triumphant. Humans are more pushed by preventing future shame and loss than trying to build upon previous success.
I can provide more context. I see you’re asking about the source of the regime's popularity further down in the comments, but I think the economic angle is only about a third of the story at best. I believe the economic narrative is quite simple and boils down to two factors.
First, the first eight years of the (second) Orbán government coincided with an incredible economic boom in the region. As the article states, Hungary and its peers were recovering from the GFC and experiencing 4% annual GDP growth, fueled by massive amounts of EU Cohesion Funds and foreign direct investment (FDI). The growth in wages and asset prices was even higher. If I remember correctly, between 2010 and 2016, wages grew by 10% annually with inflation under 3%. Housing prices rose even faster, and since post-communist countries have higher homeownership rates than the West, this felt like a massive wealth gain. Most people attributed this boom entirely to Orbán’s regime; even if they didn't, they were content enough not to care much about corruption or the rule of law, similar to how many Chinese citizens don't question their government as long as their quality of life improves. This growth was also visible: renovated buildings, new highways, economic digitization, and Western brands like Starbucks or KFC popping up in rural cities of only 100k residents, as well as foreign cuisine like sushi.
While the article claims Hungary outperformed its peers (Poland, Czechia, Slovakia, Romania, Croatia, and Bulgaria), that doesn’t align with my recollection. I don’t have the figures in front of me, but having followed GDP data over the last 14 years, my impression is that Hungary was generally "middle of the pack" in nominal terms and below average in PPP (feel free to correct me with data here). In recent years, Romania has all but caught up in PPP GDP per capita, and Bulgaria is also close behind, whereas they were miles behind in 2010. Of course, the average Hungarian voter wouldn't be aware of this. This leads to the second factor: the previous socialist government severely underperformed compared to its peers both leading up to 2009 and during the GFC. Hungary failed to capitalize on the boom and fell harder during the recession than the rest of the region. Afterward, the new government merely hitting the regional benchmark was perceived as a major success.
Regarding the "unorthodox" measures in the first four years, I think the most significant was the nationalization of private pension funds. Adjusted for inflation and my quick napkin math, this was about €15 billion ($17.7 billion), largely used to pay off foreign debt and buy a major stake in MOL, the largest public company. While it stabilized the budget, it put the government on the hook for these pensions in two decades. Kicking the can down the road makes GDP look great now, but the bill will eventually come due, especially since GDP growth has been lower than the market returns these funds would have otherwise accrued. There were also other moves, like introducing retroactive taxes that were struck down by the Constitutional Court, which later led to the rewriting of the constitution to strip the court of its veto. Ultimately, most of these were minor in the grand scheme of things.
Taking a wider view, unorthodox policy has been a theme of Orbán's 16-year tenure. The key pillars were:
1. A “High-Pressure Economy”: Maximally stimulating the economy even during periods of solid growth and low unemployment. Allegedly a directive from Orbán himself, the central bank kept rates ultra-low while the government provided heavy subsidies and cheap loans. Hungarian economists raised alarms as early as 2014, warning that if a crisis hit (as it did with the war in Ukraine), the state would be "out of ammunition." They also warned that wage growth was outstripping productivity, fueling inflation. Orbán has always favored high-risk, high-reward strategies, betting heavily on a new world order led by Russia and China. The logic seemed to be that following the standard neoliberal playbook would never allow Hungary to "leapfrog" its peers and catch up to the West.
2. The Chaebol/Zaibatsu Model: The government tried to create "national champions" owned by loyal oligarchs through favorable regulation and handouts. Essentially, foreign companies selling to the domestic market were squeezed by taxes and regulations until they were forced to sell to a government-aligned oligarch. The problem is that these "champions" operate in low-value industries like tourism, agriculture, or telecoms. They don't compete abroad or innovate in IT/manufacturing; they simply collect rent from a captive market, eroding Hungary's purchasing power relative to its peers.
3. Generally, the government takes a highly interventionist role. For example, they forced banks to convert foreign currency loans into HUF, eliminating exchange rate exposure for debtors. This was costly and unprecedented, but it paid off when the Swiss National Bank unpegged the franc, causing it to surge 30%. However, I’d argue the aggregate results are negative. Examples of bad bets include over-reliance on Russian gas, contracting Rosatom for the Paks nuclear plant, and going "all in" on battery manufacturing.
That said, Orbán does follow mainstream policy when it comes to "rolling out the red carpet" for export-oriented FDI. The classic examples are German car plants and, more recently, Asian battery plants. This FDI is courted via massive subsidies, low corporate taxes, cutting red tape, more relaxed labor and environmental regulations. To be clear here, the Hungarian economy is still very highly regulated with a LOT of tax burden, but there were significant improvements on the margin. The more relaxed regulation is also offset by unreliable rule of law, so on the balance it feels like a wash. In any case, while successful in attracting volume, it has created a trap: these are relatively low-value jobs where the competitive advantage is cheap labor, not skill. Meanwhile, the government has neglected the service industry (specifically IT) and higher education, often funneling students into trades rather than STEM (unlike the Chinese/Korean/Singaporean model). This, along with the failed "national champions," is why in my opinion labor productivity has failed to rise.
Finally, one under-appreciated achievement of the last 16 years has been a massive drop in petty corruption. Tax avoidance, fraud, and the informal economy have shrunk significantly, as have more mundane issues like illegal parking and bribes. While this is a positive development, grand corruption via state capture has reached unprecedented levels. I would wager that Hungary has the highest rate of "leakage" from the government budget (and the overall economy via rent seeking) into the hands of the political elite in the entire EU, and it isn't even close. This contradiction between eradicating corruption for the "little man" while institutionalizing it for the elites is I think a major reason why the public has started to care much more about corruption in recent years.
This is fantastic! I'd also love it if you are anyone hear could speak more about a few things:
- Péter Márki‑Zay and why his 2018 victory failed to gain any further momentum
- The 2018 'Slave law' protests and why these also failed to gain traction
Finally, something anecdotal a Hungarian friend told me about. She said there was a policy that paid married couples for having children, but if they got divorced they had to give the money back, which was leading to a lot of domestic violence. I've never been able to find any evidence to prove or disprove this.
1. I don't really remember that much about the "Slave law" protests. The government could backpedal any moment (as it sometimes did before) but they didn't. Fidesz is known for running constant internal polling, so they likely knew exactly how much political capital they could afford to spend. Even if a majority disapproved in the abstract, I suppose it clearly wasn't a wedge issue for most voters; a bit like how approval rates don't move the needle in contemporary US politics outside inflation and immigration. Personally, I remember thinking that calling relaxing the labor regulations "slave law" was populist hyperbole.
2. It's definitely true that having to pay back the subsidy and having to start paying personal loan rates on the interest free loan is something most people would not be able to afford. Marriage rates have been up and divorce rates constant in the period with the government subsidy, so it's very plausible that divorce has been heavily disincentivized. Official numbers on domestic violence did increase in the period (at least since 2019), according to
it went from 400 cases a year to 800 in one set of figures, 3400 to 4600 in a broader analysis by researchers, but I never heard or read anyone making an explicit connection between the subsidies and domestic violence.
With your first question I assume what you’re really asking is why Péter Márki‑Zay (MZP) failed to build an opposition movement as successful as Péter Magyar’s six years later. To me the answer seems simple: MZP was too early. Taking the broadest view possible, the Hungarian economy was still relatively healthy between 2018 and 2021; while inflation became a concern in 2021–2022, things were still "okay-ish." In contrast, the period from 2022 to 2026 has been quite bleak, characterized by stagnation and a "cost-of-living crisis". While many factors worked against MZP and in favor of Magyar, it isn’t unreasonable to think that this economic shift is sufficient to explain everything. However, I know this is a boring answer so we can take a closer look at the specific mechanics of how MZP's failure unfolded. Also, keep in mind I am not an expert and have not lived in the country for quite a while, I am only following the news and some social media.
When MZP won the mayoralty of a small city in 2018, Fidesz was still at the height of its popularity and as already stated the economy was still booming (GDP up 4.9%, inflation just below the central bank target with 2.8%). His victory over the Fidesz incumbent was a local outlier, meaning he lacked the national momentum needed to build a center-right movement. Furthermore, he had a city to run; how could he find the time to build a new party? If he had failed to prove himself as mayor, his political career would have been over, which was no easy task given the government was actively setting him up for failure. Without a major center-right party behind him, he was forced into the 2022 opposition coalition, a "mish-mash" of mostly left-wing and liberal parties. Becoming the prime ministerial candidate for what was perceived as a failed liberal movement ultimately torched his credibility and "political capital" with right-wing voters. Relying on existing, low-approval opposition parties instead of having his own platform essentially set him up for failure.
Some argue he made more communication blunders than Magyar, allowing the Fidesz-aligned media to successfully dismantle him, but I don't think he ever stood a chance. Being tied to a group of deeply unpopular politicians made him an easy target, especially at a time when far fewer people were questioning the Fidesz media machine. In 2022, the wheels were only just starting to come off the economy; inflation was elevated, and while voters were concerned, they didn't yet realize things were about to get much worse. Many could still be convinced that Orbán would manage a "return to normal." In fact, many opposition supporters actually hoped for a loss in 2022 (including me!), believing that whoever held power for the next four years would become the scapegoat for the coming disaster. A shaky coalition with zero governing experience (united only by their opposition to Orbán) trying to navigate an economic crisis against a Fidesz-controlled "deep state" and media would have likely discredited any opposition to Fidesz for a decade. Indeed, Fidesz won the battle in 2022 against MZP, but they are about to lose the war to Magyar who is now capitalizing on the economic fallout.
There is also the argument that Magyar learned from MZP’s failure. He has strictly avoided any association with established parties or political figures (including MZP himself) opting instead to build a movement from a "clean slate." This allows him to appeal to disillusioned Fidesz voters while still capturing the existing opposition, who are now willing to vote for almost anyone with a real shot at challenging Orbán. It is also worth noting that Magyar has made building this movement his full-time job; while he technically took his seat in the European Parliament to maintain a political platform and obtain legal immunity, he has been neglecting his MEP duties to focus on his national campaign.
There has also been an evolution in the opposition's political pragmatism. 2018 saw the first experimental coalition between tiny left-wing parties as a response to Hungary’s disproportionate election system. By 2022, nearly the entire opposition had consolidated into a single coalition with a joint list and a primary system, their voters were focused enough on getting rid of Fidesz to back any unified front. Now, in 2026, it’s essentially a given: as long as Magyar promises to restore checks and balances and maintains a more moderate posture than Orbán, he will secure the entire opposition vote by default. This frees him to focus almost exclusively on chipping away at Fidesz’s core base through his political positioning.
Wow. REALLY appreciate this thoughtful and thorough answer! I follow what's going on in Hungary, but not deeply. But like everyone else I'm really curious to see what happens in April.
We’ll pass it on to our author, an in-depth look at that could prove to be of interest to others as well. No promises though. @Kaiser Bauch, if you’re up for it.. ;)
And this is why God made wonderful platforms such as Substack, so other voices can cut through the noise and spin, and just deliver the plain facts. We're doing our part. ;) Thank you for your suggestion, we'll see what we can do!
The only part of Hungary I ever looked into was its family policy, which I consider pretty disappointing.
As an example, if you have several kids then the mother doesn't have to pay income taxes. Sounds great right? But it's just the mother. There is no married filing jointly, no income tax benefit for the father. How many women with lots of children want to work a demanding high paying job? And isn't daycare for four kids really expensive and inefficient?
It would make a lot more sense to have a tax break for both spouses and then maybe they can make it work on the husbands income, but that isn't how Hungary works.
Which is sad because higher post tax earnings for men is basically the number one causation of higher fertility.
There are also benefits that penalize marriage and reward single mothers.
And then there are the various subsidies. If you don't want a particular kind of car or apartment or whatever the subsidy isn't worth it to you. Why not just pay cash?
In short it seems like the kind of thing a Soviet Planner would come up with. Micromanaged, inefficient, just throwing money at a goal.
I completely agree, even Orbán was not able to really go beyond the liberal dogma and go for tax breaks for men - also because it would hurt the budgets much more.
Agree that his ideological frame was wrong, but I honestly think it’s cheaper than free daycare (basically the least efficient way to raise fertility).
Some clarifications from a Hungarian. There ARE tax cuts for fathers as well. Total tax exemption was introduced only for mothers of 2+ children. You correctly pointed out that it sends a mixed message at best: you did well, but you are more valuable as workforce (in line with the mainstream capitalist/feminist zeitgeist). As for the subsidies: they were carefully constructed to not just be 'helicopter money,' and do not subsidize the improductive underclass (to say it tactfully). The previous socialist government was associated with free handouts which (accordig to some radical voices on the right) amounted to 'gipsy-breeding' - or to put it more politically correct, subsidized the welfare-dependent class at the expense of the productive middle class, without providing real breakout opportunities for the former.
Even though gypsies can't access some of these subsidies they are still heavily paid by the government, simply because they can't let their shitstain offspring starve.
You’re not a valid person to judge their culture. Ridiculous
If you mean the border fence, it is full of holes and there is an ongoing issue with gangs and human traffickers on the Serbian side shooting at the police for instance. Serbs are not happy of course, either.
As a hungarian, I am very happy and humbled that my favourite contemporary thinker has written a piece about us. Brilliantly, as usual. KB still GOAT.
Hopefully, we are finally going to conduct some fat-man-removal about a month from now, but that of course doesn't mean that things will be hunky dory in no time. In fact, our demographic situation alone suggests that the 2010s were the last chance for us to "catch up to the west" and we squandered it.
Thank you very much!
Hard to argue with the notion that Hungary under Orbán has not been hugely successful.
But this post significantly understates the degree to which Hungary's outcomes across the board are just as baked-in as its population decline.
1. Given Hungary's situation at the end of the Cold War--and the West's systematic looting of Eastern European capital in the 1990s and early 2000s--there is no way that Hungary was going to be anything other than an economic basket case for decades. That the country is doing as well as it has is no small achievement.
2. Orbán's options for "intensive" as opposed to "extensive" economic development have been severely limited by the fact that Brussels and the Eurocrats, as well as the entirety of the pre-Trump 2.0 US foreign policy establishment (and who knows what percentage of Biden- and Obama-era holdovers!), are all fanatically and irreversibly opposed to Orbán's Government. They have been waging an attempted Color Revolution there for years now. Seriously, what other reason could there be for Samantha Power showing up in Hungary in 2023? If Orbán loses the next election, it will be in no small part due to overt meddling by Brussels. The EU has voted to cut off all oil imports from Russia, scheduled to take effect three days after the Hungarian election.
In addition to simply swimming upstream against inveterate opposition, this has also just drastically reduced the potential for the kind of normal, beneficial economic relationships with other EU countries that one might expect. Yes, there have been some arrangements with German auto manufacturers. There could have been one heck of a lot more industrial integration than there has been if the EU hadn't treated Hungary like a plague victim. Orbán probably didn't want to turn to China for industrial investment, but the EU didn't really give him much in the way of options.
So no, I don't think that Hungary isn't really a "revolutionary success worthy of imitation," but that was never really in the cards. The more important point is that Hungary is not the US, nor even a Western European nation. What it needs, and what it can accomplish, are not the same as other countries.
The article seems a fair assessment of Orbanism. His main success seems to be managing immigration.
I would have liked to hear your assessment of his policies toward the press and education. It is difficult for an American of the non-MAGA right to assess how illiberal his attacks on the press and education are, since some of our supposed mainstream press judge reasonable reforms in these areas to be the end of democracy. My impression is that he crossed the line into actual illiberalism, but I can't be sure.
- Family policy sucks ass, and does nothing frankly
- Due to their voter base being mainly retired people, they just added the utter bullshit called "14th month's pension". Up to now, pensioners got a payment each month, plus a kind of bonus as a 13th month. Now there is a 14th one
- Under 25 you don't have to pay income tax. You may see where the issue lies with the increased welfare state and reduced income. Nonetheless the country keeps taking on loans, of course
- Loans upon loans to get ahead
- Same or worse discrepancy between salaries and property ladder
- Sold out country to Eastern powers (China, Korea) and subsidised them building atrocious, massive factories that poison the earth
- Former point happened on a lot of prime land for farming, and did the same via Western companies
- Built a fence during the migrant crisis, this has not been maintained. Also was not his party's idea, frankly
- Banking is heavily stealing from the people besides the average bullshit.
- Does not represent Hungarian interests in neighbouring countries
Basically, Orban is a jew, and all this is coming from that. People can't understand why he would not be with Hungarians, but fact of the matter is that you won't be represented by a racially different person. Case in point Western states too, or the council of Europe, EU etc.
It is essential a mafia state or a feudal state. The level of corruption is simply staggering.
Phillip Pilkington gives a radically different position on the polls and Hungary’s contemporary condition.
It seems that if any nation is going to turn around its birth rate then it needs some sense of necessity. As you already touched upon with Israel’s exceptional birth rate as a developed nation, I believe that preventing demographic decline will require a sense of national crisis or shared vision. James Gelvin said it is better for a nation to have a national tragedy than a victory. The Battle of the Alamo and the holocaust are two historical events (while very different) that galvanize national pride because they are seen as tragic instead of triumphant. Humans are more pushed by preventing future shame and loss than trying to build upon previous success.
https://captainfransentim.substack.com/p/europe-must-wake-up-internal-fracture?r=5jmmex&utm_campaign=post&utm_medium=web
I can provide more context. I see you’re asking about the source of the regime's popularity further down in the comments, but I think the economic angle is only about a third of the story at best. I believe the economic narrative is quite simple and boils down to two factors.
First, the first eight years of the (second) Orbán government coincided with an incredible economic boom in the region. As the article states, Hungary and its peers were recovering from the GFC and experiencing 4% annual GDP growth, fueled by massive amounts of EU Cohesion Funds and foreign direct investment (FDI). The growth in wages and asset prices was even higher. If I remember correctly, between 2010 and 2016, wages grew by 10% annually with inflation under 3%. Housing prices rose even faster, and since post-communist countries have higher homeownership rates than the West, this felt like a massive wealth gain. Most people attributed this boom entirely to Orbán’s regime; even if they didn't, they were content enough not to care much about corruption or the rule of law, similar to how many Chinese citizens don't question their government as long as their quality of life improves. This growth was also visible: renovated buildings, new highways, economic digitization, and Western brands like Starbucks or KFC popping up in rural cities of only 100k residents, as well as foreign cuisine like sushi.
While the article claims Hungary outperformed its peers (Poland, Czechia, Slovakia, Romania, Croatia, and Bulgaria), that doesn’t align with my recollection. I don’t have the figures in front of me, but having followed GDP data over the last 14 years, my impression is that Hungary was generally "middle of the pack" in nominal terms and below average in PPP (feel free to correct me with data here). In recent years, Romania has all but caught up in PPP GDP per capita, and Bulgaria is also close behind, whereas they were miles behind in 2010. Of course, the average Hungarian voter wouldn't be aware of this. This leads to the second factor: the previous socialist government severely underperformed compared to its peers both leading up to 2009 and during the GFC. Hungary failed to capitalize on the boom and fell harder during the recession than the rest of the region. Afterward, the new government merely hitting the regional benchmark was perceived as a major success.
Regarding the "unorthodox" measures in the first four years, I think the most significant was the nationalization of private pension funds. Adjusted for inflation and my quick napkin math, this was about €15 billion ($17.7 billion), largely used to pay off foreign debt and buy a major stake in MOL, the largest public company. While it stabilized the budget, it put the government on the hook for these pensions in two decades. Kicking the can down the road makes GDP look great now, but the bill will eventually come due, especially since GDP growth has been lower than the market returns these funds would have otherwise accrued. There were also other moves, like introducing retroactive taxes that were struck down by the Constitutional Court, which later led to the rewriting of the constitution to strip the court of its veto. Ultimately, most of these were minor in the grand scheme of things.
Taking a wider view, unorthodox policy has been a theme of Orbán's 16-year tenure. The key pillars were:
1. A “High-Pressure Economy”: Maximally stimulating the economy even during periods of solid growth and low unemployment. Allegedly a directive from Orbán himself, the central bank kept rates ultra-low while the government provided heavy subsidies and cheap loans. Hungarian economists raised alarms as early as 2014, warning that if a crisis hit (as it did with the war in Ukraine), the state would be "out of ammunition." They also warned that wage growth was outstripping productivity, fueling inflation. Orbán has always favored high-risk, high-reward strategies, betting heavily on a new world order led by Russia and China. The logic seemed to be that following the standard neoliberal playbook would never allow Hungary to "leapfrog" its peers and catch up to the West.
2. The Chaebol/Zaibatsu Model: The government tried to create "national champions" owned by loyal oligarchs through favorable regulation and handouts. Essentially, foreign companies selling to the domestic market were squeezed by taxes and regulations until they were forced to sell to a government-aligned oligarch. The problem is that these "champions" operate in low-value industries like tourism, agriculture, or telecoms. They don't compete abroad or innovate in IT/manufacturing; they simply collect rent from a captive market, eroding Hungary's purchasing power relative to its peers.
3. Generally, the government takes a highly interventionist role. For example, they forced banks to convert foreign currency loans into HUF, eliminating exchange rate exposure for debtors. This was costly and unprecedented, but it paid off when the Swiss National Bank unpegged the franc, causing it to surge 30%. However, I’d argue the aggregate results are negative. Examples of bad bets include over-reliance on Russian gas, contracting Rosatom for the Paks nuclear plant, and going "all in" on battery manufacturing.
That said, Orbán does follow mainstream policy when it comes to "rolling out the red carpet" for export-oriented FDI. The classic examples are German car plants and, more recently, Asian battery plants. This FDI is courted via massive subsidies, low corporate taxes, cutting red tape, more relaxed labor and environmental regulations. To be clear here, the Hungarian economy is still very highly regulated with a LOT of tax burden, but there were significant improvements on the margin. The more relaxed regulation is also offset by unreliable rule of law, so on the balance it feels like a wash. In any case, while successful in attracting volume, it has created a trap: these are relatively low-value jobs where the competitive advantage is cheap labor, not skill. Meanwhile, the government has neglected the service industry (specifically IT) and higher education, often funneling students into trades rather than STEM (unlike the Chinese/Korean/Singaporean model). This, along with the failed "national champions," is why in my opinion labor productivity has failed to rise.
Finally, one under-appreciated achievement of the last 16 years has been a massive drop in petty corruption. Tax avoidance, fraud, and the informal economy have shrunk significantly, as have more mundane issues like illegal parking and bribes. While this is a positive development, grand corruption via state capture has reached unprecedented levels. I would wager that Hungary has the highest rate of "leakage" from the government budget (and the overall economy via rent seeking) into the hands of the political elite in the entire EU, and it isn't even close. This contradiction between eradicating corruption for the "little man" while institutionalizing it for the elites is I think a major reason why the public has started to care much more about corruption in recent years.
pretty awesome answer!
This is fantastic! I'd also love it if you are anyone hear could speak more about a few things:
- Péter Márki‑Zay and why his 2018 victory failed to gain any further momentum
- The 2018 'Slave law' protests and why these also failed to gain traction
Finally, something anecdotal a Hungarian friend told me about. She said there was a policy that paid married couples for having children, but if they got divorced they had to give the money back, which was leading to a lot of domestic violence. I've never been able to find any evidence to prove or disprove this.
With respect to your other questions.
1. I don't really remember that much about the "Slave law" protests. The government could backpedal any moment (as it sometimes did before) but they didn't. Fidesz is known for running constant internal polling, so they likely knew exactly how much political capital they could afford to spend. Even if a majority disapproved in the abstract, I suppose it clearly wasn't a wedge issue for most voters; a bit like how approval rates don't move the needle in contemporary US politics outside inflation and immigration. Personally, I remember thinking that calling relaxing the labor regulations "slave law" was populist hyperbole.
2. It's definitely true that having to pay back the subsidy and having to start paying personal loan rates on the interest free loan is something most people would not be able to afford. Marriage rates have been up and divorce rates constant in the period with the government subsidy, so it's very plausible that divorce has been heavily disincentivized. Official numbers on domestic violence did increase in the period (at least since 2019), according to
https://lakmusz.hu/2025/02/05/hogyan-ertelmezzuk-a-statisztikat-ami-szerint-5-ev-alatt-megduplazodott-a-kapcsolati-eroszak-aldozatainak-szama-magyarorszagon
it went from 400 cases a year to 800 in one set of figures, 3400 to 4600 in a broader analysis by researchers, but I never heard or read anyone making an explicit connection between the subsidies and domestic violence.
With your first question I assume what you’re really asking is why Péter Márki‑Zay (MZP) failed to build an opposition movement as successful as Péter Magyar’s six years later. To me the answer seems simple: MZP was too early. Taking the broadest view possible, the Hungarian economy was still relatively healthy between 2018 and 2021; while inflation became a concern in 2021–2022, things were still "okay-ish." In contrast, the period from 2022 to 2026 has been quite bleak, characterized by stagnation and a "cost-of-living crisis". While many factors worked against MZP and in favor of Magyar, it isn’t unreasonable to think that this economic shift is sufficient to explain everything. However, I know this is a boring answer so we can take a closer look at the specific mechanics of how MZP's failure unfolded. Also, keep in mind I am not an expert and have not lived in the country for quite a while, I am only following the news and some social media.
When MZP won the mayoralty of a small city in 2018, Fidesz was still at the height of its popularity and as already stated the economy was still booming (GDP up 4.9%, inflation just below the central bank target with 2.8%). His victory over the Fidesz incumbent was a local outlier, meaning he lacked the national momentum needed to build a center-right movement. Furthermore, he had a city to run; how could he find the time to build a new party? If he had failed to prove himself as mayor, his political career would have been over, which was no easy task given the government was actively setting him up for failure. Without a major center-right party behind him, he was forced into the 2022 opposition coalition, a "mish-mash" of mostly left-wing and liberal parties. Becoming the prime ministerial candidate for what was perceived as a failed liberal movement ultimately torched his credibility and "political capital" with right-wing voters. Relying on existing, low-approval opposition parties instead of having his own platform essentially set him up for failure.
Some argue he made more communication blunders than Magyar, allowing the Fidesz-aligned media to successfully dismantle him, but I don't think he ever stood a chance. Being tied to a group of deeply unpopular politicians made him an easy target, especially at a time when far fewer people were questioning the Fidesz media machine. In 2022, the wheels were only just starting to come off the economy; inflation was elevated, and while voters were concerned, they didn't yet realize things were about to get much worse. Many could still be convinced that Orbán would manage a "return to normal." In fact, many opposition supporters actually hoped for a loss in 2022 (including me!), believing that whoever held power for the next four years would become the scapegoat for the coming disaster. A shaky coalition with zero governing experience (united only by their opposition to Orbán) trying to navigate an economic crisis against a Fidesz-controlled "deep state" and media would have likely discredited any opposition to Fidesz for a decade. Indeed, Fidesz won the battle in 2022 against MZP, but they are about to lose the war to Magyar who is now capitalizing on the economic fallout.
There is also the argument that Magyar learned from MZP’s failure. He has strictly avoided any association with established parties or political figures (including MZP himself) opting instead to build a movement from a "clean slate." This allows him to appeal to disillusioned Fidesz voters while still capturing the existing opposition, who are now willing to vote for almost anyone with a real shot at challenging Orbán. It is also worth noting that Magyar has made building this movement his full-time job; while he technically took his seat in the European Parliament to maintain a political platform and obtain legal immunity, he has been neglecting his MEP duties to focus on his national campaign.
There has also been an evolution in the opposition's political pragmatism. 2018 saw the first experimental coalition between tiny left-wing parties as a response to Hungary’s disproportionate election system. By 2022, nearly the entire opposition had consolidated into a single coalition with a joint list and a primary system, their voters were focused enough on getting rid of Fidesz to back any unified front. Now, in 2026, it’s essentially a given: as long as Magyar promises to restore checks and balances and maintains a more moderate posture than Orbán, he will secure the entire opposition vote by default. This frees him to focus almost exclusively on chipping away at Fidesz’s core base through his political positioning.
Wow. REALLY appreciate this thoughtful and thorough answer! I follow what's going on in Hungary, but not deeply. But like everyone else I'm really curious to see what happens in April.
We’ll pass it on to our author, an in-depth look at that could prove to be of interest to others as well. No promises though. @Kaiser Bauch, if you’re up for it.. ;)
And this is why God made wonderful platforms such as Substack, so other voices can cut through the noise and spin, and just deliver the plain facts. We're doing our part. ;) Thank you for your suggestion, we'll see what we can do!