ABSTRACT
Hungary was one of the earliest of the former East bloc countries to liberalize its economy. One form of organized entrepreneurial behavior that is likely to become an enduring feature of Hungarian capitalism is the local-level collective works organization. This institution combines the market coordination of individual producers with the social relations and political governance of village life. The most obvious characteristic of an economic system in transition is that new mechanisms for ordering economic activity must be institutionalized. The most obvious characteristic of an economic system in transition is that new mechanisms for ordering economic activity must be institutionalized. The organization of economic activity, then, depends largely on the collective norms and models of behavior prevailing in different communities. Both market and community regulate cooperation among entrepreneurs. The neocorporatist form of governance has relied less on state monetary and fiscal management and more on controlling economic actors through bargains made between producer groups.
