A smaller Hungarian Parliament?

A few days ago (January 25) I reported on a new Szonda Ipsos poll that inquired about the population's attitude toward an austerity program. Of all the possible changes the people sampled could choose, the most popular was a reduction in the size of the overblown Hungarian parliament. Ninety-three percent of Hungarians of voting age were most enthusiastic about such a change. The reason for this enthusiasm is a disillusionment with politics in general and the performance of the members in the House in particular. People complain about the large number of absentees during general debates. (I don't know what they would think if they saw U.S. senators making impassioned speeches in a virtually empty room.) Those who are not supporters of Fidesz bring up Viktor Orbán's absence from parliament for weeks on end. A lot of people don't like the Fidesz and Christian Democratic practice of marching out of the chamber when the prime minister speaks. Moreover, they believe that with a smaller parliament a lot of money could be saved (which is not really true; fewer representatives would mean a larger staff). However, it is not so much the savings that counts here but the gesture toward the demanding voters. Another sore point is the members'  bloated, undocumented expense accounts.

For years five-party discussions have been taking place on and off about the size of parliament and improvements in the electoral system. They got nowhere. Each party came up with suggestions in its own favor. By now the population is fed up, but not fed up enough just to let the whole thing drop. As far as compensation is concerned Ferenc Gyurcsány's position has been for some time that base salaries should be raised to an acceptable level but that compensation for expenses would require receipts. Fidesz refused to discuss the question because they claimed that it is outrageous to raise salaries. Indeed, it looks good that a parliamentary member's salary is barely more than the current average salary. To my mind it is more outrageous that compensation received has nothing to do with actual expenses. And it is not taxable income either.

Most likely encouraged by the Szonda Ipsos poll the government decided today at an extraordinary session of the cabinet to propose its own version of electoral reform and to tackle the question of salaries and expense accounts. Admittedly, this is one of the bills that needs a two-thirds majority, but the proposals should be put to a vote. This way Fidesz must come out in the open and vote for or against them, thus making its position public.

At the moment there are 386 members. I don't want to go into the details of the Hungarian electoral system because a whole blog would not be enough to explain it. I once encountered a Harvard graduate student whose dissertation was on the Hungarian electoral system and who claimed that it is the most complicated system in the world! But the upshot of it is that some members come from party lists, a fair number are elected as individuals from their parliamentary districts, and leftover votes for losers are added to their party's final numbers. There are two rounds that allow for all sorts of manipulation during the intervening weeks.

The new proposal is very simple: the number of seats would shrink from 386 to 199. Of these, 176 seats would be decided on the basis of party lists put together by counties. Twenty-three seats would come from votes cast for unsuccessful candidates. Because there would be no need for a second round the expense of national elections would be only four billion forints instead of eight. In addition, the government is planning to raise the base salaries of members to three times the average salary but at the same time compensation for expenses would be made only after the submission of receipts. The government is also preparing a bill that would decrease the number of council members in local governments by fifty percent. Ferenc Gyurcsány at today's press conference announced that these changes would result in a savings of 100 billion forints a year.

That is not good news for Fidesz. So the party machinery and the think tanks close to the party immediately began a campaign against the proposals. Péter Szijjártó, the Fidesz spokesman, was quick to attack the prime minister as well as the whole idea. According to Szijjártó "the prime minister proved for good that he is unfit for his post" because he came up with such constitutional issues in the middle of a financial and economic crisis. Szijjártó recalled Péter Medgyessy's "discredited constitutional proposals" at the time when he was in deep political trouble. The implication is that Gyurcsány is in a similar situation, and we all remember what happened to Medgyessy. He added that Fidesz made several suggestions for a parliament of about this size but MSZP refused even to consider their proposals. Nézőpont (Point of View), a fairly new Fidesz think tank, went even further. They already figured out that Ferenc Gyurcsány "has no intention of coming to an understanding with the opposition on these issues" because his suggestions are helping only MSZP and the smaller parties. The political scientists working for Nézőpont are most likely right about MSZP, at least at the moment. At the last elections out of the 176 MSZP MPs 107 won their districts outright. Today it is unlikely that MSZP would carry so many districts. Nézőpont is also correct in saying that a system based on party preferences and party lists helps the smaller parties. After all, SZDSZ won very few seats outright, the rest came from the list based on the number of votes cast for SZDSZ candidates. MDF won all its seats the same way.

Therefore, I'm almost certain that the two small parties will be willing to go along with the government's suggestion. In fact, Károly Herényi, head of the MDF caucus, already indicated that it is an acceptable basis for negotiation. This didn't come as a surprise to me because MDF all along championed for a system based on party lists. This evening Ibolya Dávid talking with Olga Kálmán (ATV) reiterated her belief that such an electoral system is the fairest and the simplest. She added that that most people vote not so much for the person but for the party the person represents. Nézőpont decided to frighten the public a bit by predicting that under such a system it could easily happen that the far-right Jobbik could send as many as ten members to parliament. Thus, they added, Gyurcsány's suggestions indirectly could strengthen the extreme right. The political scientists of Nézőpont admitted, however, that it will be difficult for Fidesz to say no because of public demand for a small and cheaper parliament. Nézőpont's final conclusion: Gyurcsány crafted these proposals in such a way as to make sure that Fidesz wouldn't vote for them.


  1. “That is not good news for Fidesz”
    That depends on whether you believe that FIDESZ will somehow be able to manipulate the two-round, majoritarian elements in the current electoral system to win a two-thirds majority by achieving a knock-out blow (K.O.) in the first round and therefore to demoralise their opponents in the second. This is certainly theoretically possible if FIDESZ achieves a healthy lead (say 8-10%, and finishes within 4-5% of the 50% mark) in the popular vote in the first round of a parliamentary election.
    But, they tried this in 2002 – indeed on the day before the first round Magyar Nemzet got into trouble for sticking the letters “K.O.” on their front page, in a direct reference to this strategy. In order to bump up this lead they tried to mobilize as much of the right-inclined vote as they could to beat the MSZP. However, in so doing they also mobilized everyone that didn’t like them behind the MSZP, and lost an election, that really they should have won (and probably would have won had they not overreached themselves).
    Of course, they may say, this time things are different. Well, every election is different from the previous one, but it is probaly not so different as they like to think. The polls show a huge FIDESZ lead, but only because large sections of the population sympathetic to the MSZP would stay at home. And, many of them in part are saying this because the election is relatively distant, and the prospect of an Orbán government (and with a two-thirds majority to boot) is not yet uppermost in their minds. When, it is much of that lead will vanish as quickly as snow in the summer sun (that’s not, of course, to say that FIDESZ doesn’t have a very good chance of beating the MSZP).
    So, once you get rid of the two-thirds majority “illusion”, what is there for FIDESZ to oppose? There is a chance that Jobbik might hold the balance of power – but possibly no more than in the current system (and maybe it might force Hungary’s parties to develop something like the arranagements that have existed in the Czech Republic and New Zealand, where in the past the major opposition party has allowed the largest vote getter to form a government, and thus moderate tendencies towards polarization).

  2. FIDESZ should copyright its ideas. They proposed smaller parliament before, and voted down by MSZP 67 times. Now it’s coming from Gyurcsany, so it’s good. Of course most Hungarians may not read the fine print, and miss the point: the word “representative” will become meaningless, the public will not have a chance to select and elect their representatives any more. We should do the opposite of what Gyurcsany wants and do away with the “party-list” completely. We need a lot more independent MPs, all current parties are useless.

  3. I completely agree with the argument of Mark. I neither think that the arguments of the Nezőpont Intézet are valid. Jobbik has the same chance to get into the Parliament as with the current system. As well as, SZDSZ and MDF have the same chance to drop out. It is unclear yet which system would be more better for FIDESZ. In the current system, also, there are the inbuilt mechanism of compensation votes, which may ensure that MSZP would have enough MPs in the new Parliament, save a disaster for MSZP. But such a major shift of votes could ensure the two-third majority for FIDESZ in the new proposed system.
    What is important, though, that the proposal a very serious attempt to reduce the size of the political class both at national level and at local level. This is a very important self-constraining act on behalf of the MSZP. It also ensures lower costs, which is very important for Hungary now in the midst of a major crisis. Also, by reducing the number of political decision makers, it also likely to reduce level of corruption and number of lobbying agents within the political class.
    Still, it is only half job done. There is a need also to have effective and realistic regulation on party financing. Without such a regulation, institutionalised corruption would be the prevailing rule and would effectively bar any serious attempt to reduce corruption in Hungary.

  4. It must be noted that not only MDF but SZDSZ also supports this proposal! As usual, Fidesz is fighting a rearguard battle against the forces of reform. As the recession bites, Hungarians will recognize, which party blocks consistently their path to better living and will punish that party.
    It is too early to talk about two-thirds majority for Fidesz! First they have to achieve simple majority. With this populist political direction, even that will be tall order!

  5. MSZP shills can be amazing. The “forces of reform”, MSZP and SZDSZ have shown their incompetence for many years. If there’s one meaningless word in Hungary, it’s “reform”.
    Gyurcsany loves to talk, he can go on for hours without ever giving more than empty promises and silly ideas, none of which will solve any problems. He’s really painful to listen to, so most people get tired in the first 5 minutes and just read the “important” parts in next day’s newspaper. His latest “tax package” shows how little he knows about economics, and his latest “smaller parliament” shows that he’s not familiar with the basics of democracy. He despises people and he don’t want to allow them to select their own representatives. I’m familiar with the Churchill quote: “The best argument against democracy is a five minute conversation with an average voter.”, but I’m not a big Churchill fan, and it’s too early to give up on democracy in Hungary, we should at least try it first. The more independent representatives we can elect the better. All parties are inherently dumb.

  6. No, Fidesz supports its own initiatives, which would maintain the current system, just halves the number of MPs evenly. This was rejected by MSZP as it reduces so much the number of Mps on the compensation lists, that surely that would produce a 2/3 majority for FIDESZ based on winning the individual districts. Now, Fidesz suggests that the proposal of Gyurcsány is good for MSZP and robs the 2/3 majority of FIDESZ. So we would have a new stalamate.
    Unfortunately, Hungary is heading towards a colossal crisis with mass unemployment combined with forint devaluation, which would hurt the whole society. Let’s hope won’t happen the worst, an Argentina style collapse. The strategy of FIDESZ is making impossible to Gyurcsány to do any meaningful reform and large scale restructuring, which may help Hungary to lower its debt. To a certain extent, the worse the better for FIDESZ, as was noted by http://mozerandras.blog.hu/, to be able to re-start Hungary based on its own vision.
    Gyurcsány, on the other hand, is a very good short term tactician, he does not have the strategic vision and gut to maintain the political line around that vision. I guess, the reason is that he has a split personality between a modern market-oriented leftist and a traditional welfare approach. His whole political carrier is about to be on the middle line between these two diverging lines and muddling through. It was fine in good times, but good times ended too early and we are in a major trouble. He seems to be unable to embark on large scale reforms even at the brink of collapse.
    But this crisis wont go away, it would bite more, and it would fall back on the MSZP. I really think, that this is a last moment for MSZP to call early elections. Maybe, after the rejection in the Parliament the Gyurcsany proposal on new elections rules, MSZP could usurp the situation, and call for an early elections and come out with a elections program based on large scale reforms. That would not win the elections for MSZP, but may help a comeback on 2013, 2017 or who knows when.
    Gyurcsány really is a failed politician. His characted was killed by Öszöd, and now falls on him the reponsibility the disastrous policy between 2002-2006, which took place mostly under his watch. He was unable to get through a good reform program between 2006 and 2008. Now, the disaster is here. He is good at solving problems, but again failed to come out with sensible major reforms in due time.
    Still remains open what FIDESZ would do after winning the elections. It is still unclear whether Járai or somebody else will be the key economic adviser. Navracsics in his latest interview in the inforadio made hints, without mentioning the name, that rather the economic program of Járai would be the program of FIDESZ. In this case, finally, we would have a real right-wing party! and we would not suffer anymore from the infighting of two left-wing populist parties under different banners.
    But this is democracy. One fails, and the next takes over the governing position. Than slowly begins the erosion of winners, and after 4, 8, or who knows when comes the alteration.

  7. “Gyurcsány, on the other hand, is a very good short term tactician, he does not have the strategic vision and gut to maintain the political line around that vision. I guess, the reason is that he has a split personality between a modern market-oriented leftist and a traditional welfare approach.”
    You are right – Gyurcsány’s problem of credibility is not primarily because of his notorious speech, but he is incapable of following a single, clear political line. When he worked for Medgyessy he talked about the “nemzeti közép”; then about “daring to be left-wing”. Then after 2006, he recast himself as a Hungarian Margaret Thatcher, braving unpopularity to cut back the state, and since the referendum and with the economic crisis he doesn’t know what to do.
    The issue, I think, is not one that can be reduced to Gyurcsány’s personality, but to the crisis of identity of the MSZP. If you look at who votes for it, it looks like a western European social democratic party – its support is concentrated mostly in formerly industrial urban areas. On the other hand, as an organization at both local and national level it is embedded in networks linked to private business and committed to the continuance of market-based policies, and this shapes the party’s overall institutional organization. There is a deep-seated contradiction between these two arms of the party. This is exacerbated by the fact that the left is a minority (albeit a large one) within the Hungarian electorate, and requires the liberals (who maybe be left-wing on cultural issues, but are right-wing economically) to become a majority, capable of beating the real right.
    The way in which pre-Gyurcsány the MSZP tried to deal with this contradiction in government was to attempt to adapt some of the governing practices of MSZMP to democratic circumstances. So, the party attempted paternalism, the careful balancing of different interests, and a “sticking plaster” policy of pacification to contain social conflicts. The problem was that as the 1998 elections, and the fate of Medgyessy showed this was not a viable strategy when there was a serious, organized competitor for power (and we know from the explosion of public debt under Medgyessy that the ability of the MSZP to do this economically was limited).
    Gyurcsány thought he had the answer – which was that all he had to do was to adapt the philosophy of the “third way” from western Europe to Hungarian circumstances. After all, the problems on a superficial level seemed similar – in the 1990s Labour in the UK, or the SPD in Germany had to accomodate to an environment in which liberal economic philosophies had won and the organised working class had dissapeared. Therefore it seemed to offer a way of bridging the contradiction.
    But, this superficial impression was always misleading. The problem that Labour faced was that by 1992, liberal economic ideas (privatization, low personal income tax, a small state) were absolutely hegemonic in the UK, and they had to find a way to ditch their previous committments to full employments, and a universal social safety net, without upsetting their core constituency too much to be elected. In Hungary, however, the same liberal economic ideas are only accepted by a relatively small minority outside of some wealthy districts on the Buda side of the Danube in the capital. The state – and I suspect there is a longer tradition of this that goes back to the nineteenth century transplantation of Austrian bureaucratic practices to Hungary – is more important to the creation and reproduction of the middle class in Hungary, than in the UK, and even than in (western) Germany. And whereas during the long, finance-based boom in the UK that started in 1993 and ended in 2007, social conflicts could be masked by historically high economic growth, Hungary’s economic trajectory and position have been more difficult and painful. Therefore Gyurcsány’s solution to the contradictions of the MSZP as a political institution has been no solution at all. And now, the “third way” as a political formula is collapsing even in the UK.
    Perhaps the best thing in the long-term for the MSZP and the left is a very serious defeat – one more decisive than its 1998 loss of power, and one that would force it to reconstruct itself from first principles. But then, what happens in the meantime …..

  8. Mark, excellent analyses! Especially important that you shed light the major difference between the third way in Uk and the Hungarian version of it. The real problem of the Hungarian system is that somehow we have left-wing populist parties both at the left and the right side of the political scale. Against this background, the adoption of economic liberalism doomed to fail by the left. The left were not able to carry out any major liberalisation attempt, but engaged into a major spending spree. We know already, that despite the liberal slogans, in reality, there was a massive traditional leftist state-assisted economic policy between 2002 and 2006. What is really funny, that this period was coined by Fidesz as “banker-government” – a metaphore for neo-conservative policies.
    Gyurcsany historic mistake was that for winning the 2006 elections, did not rein the public finances. He had the chance to be Dzurinda, but he ended up being Kádár (as far as economic policy outcome concerned).
    Now, I don’t think hat he has the chance now to reconstruct himself into Dzurinda. Time has changed. After so many U-turns, two years of recessions, and in the midst of a major depression against a vital, strong, angry and vengative FIDESZ – trouble looms. For Hungary an outcome, what is happening now in the Baltic states – http://euobserver.com/9/27534 – would be a disaster. I really think that the only thing he could do now to avert such a disaster is the call for early elections as soon as possible.
    Until we do not have political and economic disaster, Hungary could stay within the broad framework of political democracy.
    Maybe Fidesz would shift the nature of Hungarian democracy towards a Guallist style presidential one. France had that after the collapse of the IVth Republic. In the first 10 years of its existence, until De Gaulle was in power, it was fairly above political parties. But after he left the stage, political parties re-established the liberal democratic working of the system through renewal of left and right parties.
    I think, the worst scenario now is an outburst of uncontrolled political protest. We are still far away from this. But the strong devaluation of forint, the looming job crisis and the consequent social troubles could lead to events unseen yet, which may trigger economic collapse. This is a black swan situation. I think, it is the outmost democratic responsability of any democratic politician to avoid the turn of black swan into great unwind.

  9. “He had the chance to be Dzurinda”
    I’ve said what I thought of the “neo-liberal” prescriptions of most Hungarian economists on this blog before …. I really don’t understand the idealization of the Slovak course in much Hungarian debate. OK, Slovakia has had very rapid GDP growth – on that measure it has overtaken Hungary (and it’s in the Euro – but I suspect that may turn out to be not such a great idea). What people forget is that gross monthly average wages still remain significantly lower in Slovakia than in Hungary. And then pensions – in 2007 when the Axa financial group surveyed twenty-six countries as part of its “Retirement Scope” survey(a selection of European, East Asian and North American states at varying stages of development)it found that Slovaks had the lowest retirement incomes of any of the countries surveyed (and their survey included states like Indonesia, Thailand, and Morocco). Its recorded unemployment rate – at 9.4% is still higher than Hungary’s. That’s not to mention the general downsizing of the welfare state – and the chasm that has opened in terms of wealth and income between the west and east of the country. And while the 2008 third quarter growth statistics look very good, the falls in industrial production recorded in the latest statistics available suggest that even GDP growth is in question.
    Given that pursuit of the Slovak road would lead to lower living standards, and much lower levels of social security than at present – even at a higher GDP level, why would Hungary want to try the Slovak road? And do you think any democratic government could implement the “reforms” necessary, and sustain them, even in a period of economic growth? I don’t.

  10. Mark, I don’t think that we have the space here to discuss this thing in depths. Slovakia during the Meciar years were a looser country. It was propelled out. Maybe pre-september 2008 Slovakia still had lower standards of living, but had an incredible fast development and maybe had the chance to upgrade standards of living also. Pre-september 2008 Hungary maybe had higher standards of living, but at the expense of piling up debts both at state and at individual level. We know that Hungary already had an unsustainable development path. Of course, in September 2008 everything had changed. Hungary is suffering like hell and will be suffering. Slovakia, due to the euro-zone membership, escaped that first batch of the crisis. That is already something. Now, sure, it entered into the euro-zone with overvalued currency, and soon will join to the exclusive club of PIGS, and together with the mediterran countries face with deindustrialisation, stagnation and deflation or the very difficult adjustment towards a lower wage level. This is the way of Japan. Hungary, unfortunately, faces the way of Zimbabwe, with declining currency. If it manages to escape the collapse, than it may have better chance to re-ignite the export led growth, once core European countries and US consumption rebound. But still, the jury is out which way would be better, lets say 10-15 years later on.

  11. Let’s hope both countries arriving in safety to the other side of the crisis! If everything goes well, global warming makes them a nice, easy going mediterranian country with orange trees and good wines. Although, one of the crucial condition of such a development, that US citizens could continue to carelessly burn gasoline in their oversized xxx cars.

  12. Yes, let’s hope everyone keeps safe during difficult times ……
    I don’t doubt that governments have made terrible policy mistakes, but I don’t think the story of Hungary’s indebetedness is just a story of feckless politicians buying votes. There are structural factors at work that I’ve described in earlier comments on this blog that would have made it very difficult for governments to do anything else.
    Nor do I think that fault for Hungary’s indebetedness lies purely, or even largely within its borders. Surely the responsibility for the debt trap in which Hungarian households will find themselves in lies partly with the greed of certain large, primarily Austrian and Italian owned banks, who sought to expand market share and thus increase their profits by using the open markets created by EU accession to lend to borrowers in Euro, or in Swiss Francs, despite the fact that they must have known that over the typical 20, 25 or 30 year term of a home loan large fluctuations in the value of a tradeable currency are quite normal. It seems to me to be up now to the Hungarian government to make these points forcefully to national governments in Rome and Vienna, and to the Commission in Brussels.
    What I reacted to were two things. I’m not sure had Hungary followed the Slovak strategy from 2000, things would have been very much better. They would have been different, certainly, but surrounded by all those states keeping their wages and social provision low, Hungary’s living standards would not have improved at the rate they did, I’d guess that without the fiscal stimulus provided by deficit spending (and I know my opinion is different to the economists’ consensus – but I really think they are wrong) the economy would have been in a state of near stagnation since 2002, and not just since 2006, the country would now be entering the international crisis with an even smaller social safety net, and that’s not to mention how much stronger political tension would be.
    Nor do I think either Gyurcsány or Orbán could get away with being Dzurinda. Dzurinda himself barely got away with them. When the Slovak “reforms” were introduced in 2004, they met with widespread civil unrest in the east of the country. And despite the economic growth, he didn’t win, but lost the elections in 2006.
    And even then, I suspect one long-term impact of the economic crisis, will be that there will be far fewer banks loans around for those companies that think they can boost profits through greenfield investment in Central and Eatern Europe. So, there just won’t be as much FDI to compete for …..

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