THE ROLE OF THE HIDDEN ECONOMY IN THE HUNGARIAN TRANSITION

Abstract

The attention paid to the second economy during the last decade and a half before the end of the former socialist system in Hungary, in the transition period toward market type of economy has given a way to the interest on the hidden economy. This latter has had a vigorous expansion. This paper analyses the extent and the role of the hidden economic activities stressing their functional role and the economic survival of small businesses. It reviews different means in which questions and dilemmas are put, judgements articulated, corresponding to different interests, as to those of the administration and economy policy, to those of economic and social interpretations. Is the hidden economy to be prohibited and participants penalised, or should it be tolerated as a regular sub economy with all its costs and fruits? Is the Hungarian new economic pattern a dichotomous one?