ABSTRACT
This chapter discusses the causes of the developments and looks at the state of the Hungarian economy in the first half of the 1980s as well as the major changes made in the system of economic management. It summarizes the most important of the measures and their conceptual background. The chapter also discusses particular measures and shows how they were integrated into the country's economic system and whether they brought about real change. The weakness and eventual failure of the reform measures, the growing dependence of firms on government, and the economic stagnation affected all of Hungarian society. The state of the economy at the end of 1978 and into 1979 led observers to prescribe a policy turnaround. The years 1985 and 1986 saw property rights in large and medium-sized firms turned over to company councils. In manufacturing industries, the base used to establish domestic prices would be the export prices on international markets.
