Industrial policy, development policy

Retrospection and forecast

Abstract

The study deals with some controversial aspects of development policy and industrial policy, reflecting on Péter Mihályi’s criticism (Mihályi, 2026) of the overuse of the value added in industrial policy. Hungarian structural policy practice has generally reacted to changes in the external environment, serving to correct the unintended consequences of the domestic economic system, and to enforce political preferences. Value added (GDP) is an obvious measure, but actual development policies are context dependent. In Hungary, from 2010 onwards, structural policy has focused on the promotion of domestic champions, and increasing production volumes and employment, neglecting the productivity aspects. The distortion of the competitive landscape and the spread of rent-seeking behaviour have demonstrably impaired resource allocation and lead to a loss of momentum.