The soft budget constraint II
The authors propose a clarification of the notion of soft budget constraint, which is widely used in analysis of socialist, transitional and market economies alike. The inter-pretation in the study is broad enough to embrace most existing approaches to soft budget constraint phenomena and provides a classification of the causes and consequences of these (Part I). In the light of this, the study goes on to review the theoretical literature on the subject and compare it with work in other dynamic commitment problems in econom-ics (Part II).
The Stabilization and Growth Pact in the light of the new EU member-states
The paper sets out to examine the fiscal characteristics of new members in the light of the requirements of the SGP and criticisms levelled against the pact, and to see in what ways new members’ initial conditions differ from those faced by current Euro-zone countries, in the run-up to adoption of the Euro. Overall, because of the lower debt levels and greater yield convergence already achieved, the new members will be able to rely less on gains from yield convergence than the current Euro-zone members were able to do. EU accession will also have a negative net impact on the budgets of new members in the early years of membership. The authors look at the cyclical sensitivities of the budgets and find that for new members, the smoothing capacity of the automatic stabilizers may be weaker than for current Euro-zone members. Also emphasized, apart from these general characteristics, are large differences in the starting fiscal positions of new mem-bers. Some policy implications of these findings are discussed.
Trust, goodwill and identity on electronic markets
The trust on which even the simplest exchange transactions rely has particular impor-tance on electronic markets. Starting out from a game-theory model, the author clarifies how casual partners can overcome shortage of information about each others’ strategic choices, and how they can improve their payments in repeated games by applying the ‘trigger’ or ‘eye-for-an-eye’ strategy. Buyer-seller relations on the Web are usually casual and call for innovative confidence-building measures to reduce the risk. Examples of such measures are efforts to institutionalize fellow feeling among buyers, through actions designed to build up or knock down reputations. In principle, buyers can only decide on the efficacy of software and other intellectual products once they possess them, but until they are convinced of their efficacy, there is no sense in buying them. The inconsistency can be dispelled, however, by other buyers retailing their experiences on the Internet. By adopting an advisory or warning role, they help their fellow buyers to reach their deci-sions. Distrust between partners is also dispelled by intermediaries trading on their own good name (from auctioneers to standards institutions). The study also looks at the spe-cific constraints on the development of trust in electronic transactions, with special re-gard to the scope for identity changes.
Economic relations between Russia and the expanded European Union. Rapprochement impeded by disputes
Hungary’s EU accession in May 2004 has made it part of a multifarious system of rela-tions taking shape between the European Union and Russia, with the economic strands, like the political ones, assuming ever more importance. The EU was Russia’s most im-portant economic partner even before the enlargement, while for the EU, Russia has importance primarily (and increasingly since the enlargement) as an energy supplier. The appreciating value of the system of relations understandably raises the question of the optimum institutional frameworks, especially commercial forms. A key role will be played by Russia’s impending WTO membership. However, the new members will pre-sumably bring new problems as well as new opportunities into the existing dialogue between the EU and Russia.
Műhely
Relations between universities and business in the transition period
The article examines the change in relations between the universities and business asso-ciations brought by Hungary’s transformation into a market economy, in the period up to accession to the EU. To investigate the types and characteristics of these relations, it uses innovation system theory and the triple helix model. There is analysis of how the govern-ment has spurred such relations and how businesses relate to the universities. An impor-tant part of the research was made up of the findings of four innovation surveys analysed from the point of view of university-business relations. Examining university-business cooperation from the innovation side shows how influential universities are as knowl-edge-generating bodies to the inception of innovations and to their penetrating or gradual character, and how commercial thirst for innovation affects the development of univer-sity research. University/industry interactions still contribute only to a limited extent to the development of the knowledge-based economy.
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