The article identifies as the cause of the slowing of economic growth in Hungary on the 'premature welfare state' and its propensity to diminish the factors conducive to economic growth (labour supply, investment, savings, and increase in productivity). It shows how the conditions for economic growth are undermined by an extensive welfare system substituting for labour-market incomes, state care that stands in for personal savings, and high taxes (progressive income tax parallel with social security contributions). Also following from this overgrown welfare state is the fluctuation of domestic economic policy.
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