ABSTRACT
This chapter analyses the recent institutional changes in Hungary from the point of view of science and technology (S and T) policy via pulling together some theoretical developments in the economics of innovation and a fairly descriptive approach. It outlines the theories and models of innovation as theoretical foundations for S and T policy. Competition is a crucial idea both in neo-classical economics and economic reality. Policy proposals arising from the neo-classical paradigm are based on the so-called market-failure argument. Evolutionary economics has provided a new policy rationale, a different one from that based on neo-classical economics. The chapter analyses the recent changes in the science and technology institutional system, and presents policy conclusions. Although transition has brought about a number of crucial political and economic changes effecting the S and T system, no systematic science and technology, innovation or industrial policies have been implemented since the early 1990s.
