Public Economics and Public Policies

leader: Tóth István János

Group members: Bakó TamásKálmán Judit, Reiff Ádám, Tóth G. Csaba

Description of research area

The Community Economics and Public Policy Group deals with the microeconomic foundations of economic development, its social and institutional background, the means of its influence and its distributional effects. It examines the means by which economic development can be promoted, the effectiveness of the tools used, and the impact of development on society. His main research subfields include empirical development and welfare economics, subjective well-being, health, the pension system, the examination of policy programs, the finances and management of local governments, corruption in Hungary and the state-employee-employer relationship system.

Research topic

In the field of relations between levels of government, the research examines the management of local governments, the inequalities in their budgetary situation, the determinants of decisions regarding local public services, local tax policy and tax competition, the demand of population groups for local public services, and the malleability of the division of labor between levels of government. The question is to what extent the appreciation of the sub-regional and regional level can improve the efficiency of the new, but essentially unchanged, since 1990 local government system, alleviate regional inequalities in public services, and articulate local economic development efforts. The research can help to rethink which public services should be assigned to which levels of government, and which forms of support and local income are more effective. In the case of local government systems that provide a variety of services and are based on representative decision-making, in addition to approaches based on the median voter model, it may be appropriate to analyze the weight of local public service consumer/voter groups and the correlation of local decisions, to examine the impact of political preferences and election cycles. The analysis of the impact of local economic policy on the behavior of companies, combining the economics of local governments and the new economic geography approach, is one of the most dynamic international research directions, which can also be well connected to the analysis of regional differences in the Hungarian economy.
Research on the public education services of local and central governments in public education, the impact of the reduction in the number of students on the efficiency of schools and school expenditures on student performance, the relationship between the income of the people living in the settlement and educational expenses, the obstacles to the effective education of the disadvantaged, the catch-up surplus -resource redistribution effects of subsidies are investigated, and the simultaneous analysis of local government demand for education and education production functions is envisaged. The question to be investigated is the competition between schools to increase the number of students, its effect on the effectiveness of education, and the effect of educational expansion, domestic and other educational reforms on student performance. The transformation of the theoretical and public policy questions of higher education financing in line with the Bologna Process gives it special relevance. Based on the analysis of the Hungarian practice, the research looks for means to harmonize the contradictory goals of expansion, quality, wide accessibility and equal opportunities from an international perspective (covering developed and new EU countries). It examines the possibilities of resolving the tension between the positive (high individual returns) and negative (limiting access and equal opportunities) effects of tuition fees. By analyzing quasi-market models serving expansion and quality at the same time, as well as methods of attracting private funds (so-called graduate contribution systems), they are able to increase the role of tuition without reducing the breadth of access.
In the field of relations between the state/government and economic actors, he examines the behavior of companies through the tax discipline of large and medium-sized companies and the employment practices of smaller companies. The research develops estimation methods that can be used to create a more accurate picture of hidden (undeclared) employment, evasion of contribution payments, and the forms and weight of activities belonging to this segment of the economy. By repeating the company questionnaire, the research tests the hypothesis of improved tax discipline, and continues to examine the changes and effectiveness of tax administration and control policy. Based on the empirical analysis of well-known cases of the past decade and a half, the investigation of corruption related to tax behavior creates a theoretical framework that can be used to describe and explain the driving forces behind the creation of corruption situations arising from the preferences, interactions and institutional effects of individual actors.
In the field of state-employee-employer relations, the research is looking for the answer to how the labor relations system developed in the course of system change and economic transformation can be fitted into the traditional Industrial Relations conceptual framework, how it fits into the systems operating in the old and new EU countries, and how the Hungarian economy is a market , institutional and regulatory system. The analysis of the bargaining power and strategy of the state, trade unions and employers, and the organization rates, contract coverage and indicators of labor conflicts aim to give an idea of the content and scope of collective bargaining. It also examines what the individualization of labor relations means for us, how the old-new informal bargaining continues to live on in wage determination. It places the analysis of bargaining activity and government policies, corporate behavior (corporate management) and economic processes (e.g. working capital flows) into domestic and international contexts, looking for an answer to the extent to which the assumed relationships between institutions and (macro)economic processes prevail , partially empirically verifiable relationships/changes in Hungarian labor relations.
Approaching the efficiency of the government from the side of decision-making, the research aims to analyze the economic policy decisions of the Hungarian government and their effects embedded in wider contexts, with the help of economic models describing the government’s behavior, as well as government documents and corporate empirical records. With special regard to why the Hungarian political elite does not consider it necessary to examine the decision alternatives from an economic perspective, or the preliminary impact assessment of the decisions.

Other data

Projects

Public procurement, political corruption and corporate efficiency in Hungary 2005-2014
Tenderer: NKFIH
Period: 2015-2017
Project Manager: Tóth István János

Leadership and Urban and Regional Development
Tenderer: Visegrad Fund
Period: 2014
Topic leader: Kálmán Judit

Effects of Labor Market Status and Education on Subjective Well-Being of the Youth In Europe
Tenderer: CERGE-EI Foundation
Period: 2015
Topic leader: Kálmán Judit

Buy or produce? Food demand of Hungarian households after 1990
Tenderer: OTKA
Period: 2013-2015
Topic leader: Molnár György

Cartels, competition restriction methods and corruption risks in the Hungarian public procurement market  (2005-2010)
Tenderer: GVH
Period: 2013-2014
Topic leader: Tóth István János

Joint modeling of the tax and pension systems
Tenderer: OTKA
Period: 2010-2014
Topic leader: Simonovits András

Are older workers crowding out younger workers?
Tenderer: OTKA
Period: 2012-2014
Topic leader: Cseres-Gergely Zsombor

Investigating the pension system with bounded rationality and agent-based models
Tenderer: OTKA
Period: 2014-2017
Topic leader: Simonovits András

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