The economic consequences of the Fidesz government on the Hungarian economy and the regional economic inequality in Hungary

Abstract: The Fidesz government has likely had an impact on the Hungarian economy through the “nationalistic” policies implemented. The analysis in this thesis aims to calculate the extent of the economic impact of the Fidesz government on the Hungarian economy in the period 2010 till 2018. Moreover, in Hungary the regional economic inequality is significant. The second aim of the analysis is to see how the Fidesz government influenced the regional economic disparity. The causal effects of the Fidesz government are measured by using the synthetic control method. With the synthetic control method, Hungary and its regions are compared with their “synthetic” counterparts. The “synthetic” counterparts consist of other European countries/regions which best resemble the economic output determinants of Hungary and the Hungarian regions in the pre-Fidesz period. With the synthetic control method, it was found that there was likely no slowdown experienced by the Hungarian economy. Moreover, it seems that the Fidesz government has resulted in an increase in regional economic inequality.