It Takes Two to Tango: The Role of the European Union and Domestic Governments in the Making of Central Bank Reform in Hungary

Abstract

This article addresses how the Hungarian Central Bank gained autonomy in its operations from ruling politicians. While stressing the substantial influence of external actors in exercise of this reform, the article also demonstrates the limits of external influence by shedding light on the domestic political costs of this reform. The high costs of central bank reform in the calculations of the ruling politicians allowed the Central Bank of Hungary to gain partial operational autonomy in 1991, which fell short of fulfilling the Copenhagen criteria for EU accession. The article discusses how partial reform furthered in Hungarian context by unpacking the interplay between domestic and external actors.

Keywords

Central Bank Reform, EU Accession Criteria, Hungarian Politics

Citation

Civelekoğlu, İlke, “It Takes Two to Tango: The Role of the European Union and Domestic Governments in the Making of Central Bank Reform in Hungary”, International Relations, Volume 9, No 36 (Winter 2013), p. 129-148.

Affiliations

• İlke CİVELEKOĞLU, Assist. Prof. Dr., Doğuş University, Department of International Relations