Would Hungary benefit from the Nordic Model of economics?

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Hungary is currently considered as one of the most thriving states in Central and Eastern Europe because of its developed economics. The country usually attracts lots of tourists from all over the world who regard Hungary as an attractive destination. The Healthcare system, transport infrastructure, and the education system are just a few of the reasons why everybody in Europe is so fascinated about the country. For more than a decade the economy has been in the upper ranks as currently, the economic score is 66.4 and the unemployment rate is pretty low but still, but still, revision of already existing policies is always important to stimulate further development. This is why some people believe that Hungary can benefit a lot if they take a look at the Nordic model of economics.

The Nordic model of economics frequently gets at the center of attention of economic experts. It’s an economic model practiced in some Scandinavian countries, such as Sweden, Norway, Finland, and Denmark which are usually known for their high living standards, therefore, high quality of life and low incomes. Today the success of the Nordic economic model is popular all over the world as it’s regarded as an example of economic equality and development.

Possible benefits for Hungary

Many European countries have been trying to implement some features of the Nordic model but considering the current economic model of Hungary. The market is mainly focused on exports and especially, international trading. Although the Hungarian market is really successful, being in the 25th largest export economy of the world, the mixed elements of capitalism and socialism would definitely benefit the country. However, for now, it’s very unlikely for Hungary to have the same approach to government-owned businesses as some Nordic countries. For example, we can certainly say that there is no possibility at all at the moment for Hungary to implement a Norway-like approach.

For example, we can compare some of the leading industries in these countries, such as gambling. Norway is one of the leaders in the industry in this region. Gambling there is strictly regulated as it’s monopolized by the government. However, based on the large gaming news outlet from Norway, that is soon to change as legislators have already spoken about amendments in this law. But it doesn’t mean that the law needs to be changed. The reason why they try to make a change is that the government acknowledges that the law needs to be occasionally revised to keep pace with the current challenges of the country and the world. If we take a look at today’s digitalized world, it’s not easy to guess why they need to implement some new technologies in the gambling market to benefit more. But even now, today casinos in Norway have thousands of customers and the market continues to increase.

But with Hungary, the situation is different. Even though the official permission to take part in the Hungarian online casinos that’s considered legal in the country, the gambling industry in Hungary is not as popular as in Norway which is why implementing some characteristics of the Nordic model may even benefit the gambling sector of Hungary, not to mention possible advantages for other sectors, like healthcare or education.

What is special about the nordic model?

In case you wonder what makes the Nordic model truly special, we will tell you that it’s a mixed market economic system where some features of capitalism and socialism are combined. The success of the past few decades proves that this combination actually works and is favorable for Nordic countries because it results in economic growth. In fact, these countries have implemented a comprehensive welfare state where household transfers and social services that are provided publicly are priorities. The citizens feel safe in those countries because these countries usually invest in human capital and try to satisfy the needs of all of their residents equally. And as a result, the benefits for the people are so many that it’s even hard to name. Specifically, Scandinavians have advantages such as free education and free healthcare, and also they have satisfying pensions with guaranteed payments for retirees.

This model is the main reason why citizens have high trust levels towards the government because the reduced gap between the rich and the poor actually works and makes people believe their contribution to the country is actually praised. The model is based on the capitalist economy where creative destruction is highly encouraged. In these countries, the jurisdiction works in a way that companies have opportunities to implement transformative business models and benefit from social welfare programs. Not surprisingly, the result is encouraging workforce participation, social equality, and a thriving economy.

However, the implementation of the policies of the Nordic model is not easy for other countries because the key element of their success is the shared history of these countries. Most of the Nordic countries were formed by family-driven agriculture and small businesses and many of them had the same kind of problems and challenges. Even now, because of the many similarities, they often have the same kind of problems, and therefore, if one of them finds the solutions, it’s highly likely that this solution can be used by other Scandinavian countries as well.

Bottom Line

Therefore, despite the many benefits and advantages of the Nordic model that would definitely be favorable for Hungary as well, it would probably be difficult to replicate the Nordic model and apply their features and characteristics to the economy of Hungary. However, we can say that for this moment the economy of Hungary is not under big challenges and even more, the country’s economic model is considered as attractive even for the US. According to Bloomberg, even Trump declared that he dreamed of Orban’s Economic model. Therefore, instead of applying other countries’ success, it would probably be more beneficial to develop some new economic practices specifically customized for Hungarian citizens.