Lendület-HPOPs Regulatory Change


The transformation of Member State institutional frameworks have for a long time been in the focus of European Union research. Studies in political science, history and legal scholarship have produced analyses of the changes implemented, or indeed the lack of changes, at the national level affecting political institutions, the institutions of governance and regulation, and the legal system itself. These changes were mandated by specific obligations laid down in EU law or followed from the dynamics of broader transformation processes initiated under EU policy frameworks. A significant body of this work pursued a distinctively critical orientation investigating the political basis (democracy and legitimacy), the ideological drive (neoliberal v. social market economy), the scope (uniformisation v. accommodating diversity), the structural hiatuses (policy asymmetry, the gap between the political and the legal), and the local impact (institutional incompatibility) of the changes. The project aims to revisit the findings of these works by carrying out a large-scale legal empirical analysis of changes in economic and social regulation in Hungary and present on that basis a revised theoretical frame of national institutional transformation.

Research aim

To carry out a legal empirical research of institutional change in Hungarian economic and social regulation from 1990 to 2020 and contribute to the theoretical discourse on institutional transformation in the Member States as mandated under EU law.

Time period

1 September 2018 – 31 August 2021

Required human resources:

1 full time PI and 3 part-time researchers

Convenor: Marton Varju, senior research fellow


The project will carry out legal empirical and legal theoretical research concerning the transformation of national economic and social regulation as initiated and executed under EU policy frameworks.

Primarily, it aims to identify and assess the deregulatory impact of EU obligations on Hungarian economic and social regulation from 1990 to 2020, and indicate whether deregulation was caused a) directly by EU legal obligations, b) followed from a cross-border regulatory environment favoured by EU law (i.e., regulatory competition), or c) was the outcome of autonomous national regulatory policy. It will also examine regulatory changes which can be labelled broadly as re-regulation. This refers to the introduction of measures for the protection of non-market, diffuse values and other considerations, or the increasing of the level of protection afforded to them. The project will identify whether these adjustments were prompted by a) EU law (positive legal harmonisation), c) followed from the conscious use of the regulatory autonomy allowed under EU law, or c), as above, was the product autonomous domestic regulatory policy.

On the basis of these empirical results, the project will revisit the findings of the relevant theoretical analyses (e.g., local institutional variety and the politics and law of EU harmonisation, EU economic and social constitutionalism) produced in international political science, political economy and legal scholarship and contribute with new findings to the academic discourse.

The project contains three distinct, nonetheless interrelated research strands:

Research strand 1: Institutional variety, transformation pathways and EU law

Building on our previous work on the sustainability of national institutional varieties within the EU Single Market, this strand of the project aims to develop further the international discourse on the political, constitutional and legal theory of domestic institutional transformations as driven and/or enforced, using different tools and different forums, by EU membership. This in part will be achieved by feeding in the findings of the legal empirical research carried out in the other two research limbs. Our work, which falls predominantly in the field of legal scholarship, will contribute to the discourse, which is pursued in the adjacent disciplines of political theory, political economy, constitutional and legal theory and empirical legal research, by bringing attention to the linkages between the findings of the different discipline areas as well as by developing empirically supported observations concerning the political and legal dynamics of changes implemented in an essentially multi-layered policy and regulatory environment. Specifically, the research exercise planned will identify and distinguish between different transformation pathways, as they influence different areas of national social and economic regulation, and locate the actors and the driving forces of regulatory change, may they be at the European or the national level.

As a central component of this research strand, the project will organise an international network of researchers with the purpose of carrying out a comparative analysis of regulatory transformations experienced in a number of EU Member States. In the choice of the Member States covered, securing a variety of national institutional models that adequately characterises the heterogeneous European Union will be a central factor. The research will thus cover a number of Eastern European Member States, ‘Mediterranean’ Member States, Member States with a liberal market economy, and Member States with regulated market economies. The primary aim of this research task is to identify in the same regulatory domains the diversities and the similarities of regulatory developments in different national arenas as mandated by common EU rules and as conditioned by pre-existing national institutional particularities. The individual regulatory areas selected will reflect the variety of regulatory transformations initiated under EU policy frameworks. Therefore, they will include a) a domain unexposed to a direct requirement of transformation, b) one subject to minimum harmonisation, c) one subject to a higher-degree of harmonisation but permitting Member State flexibility, d) one with explicitly recognised Member State regulatory autonomy, and e) one exposed to cross-border regulatory competition.

In designing and implementing both the general theoretical and the related comparative work, special attention will be paid to the potential regulatory impact of contemporary transformations faced by national economies in Europe. The EU policy responses are already being shaped to address the challenges of digitalisation under the framework of the Digital Single Market strategy and the EU is closely monitoring the current and the potential effects of digital transformation in the economies and societies of the Member States. The project will, therefore, examine the emergence of particular national institutional models through the introduction of individual, currently only exploratory regulatory solutions.

Research strand 2: Trends in economic and social regulation in Hungary and their causes

The principal aim of this empirical research strand is to map the major changes in significant pieces of social and economic regulation in Hungary from the period between 1990 and 2020, determine their impact on the so-called level of protection provided (i.e., regulates/deregulates/re-regulates), and identify and analyse their political, policy, social and economic, and, if applicable, legal causes. In the latter part of the exercise, the project will pay special attention to the question of whether the cause of change was external (followed from international or EU obligations, or from requirements imposed by transnational organisations) or internal (developed in the domestic political process, emerged from domestic policy needs). In this part, the project will also collect the explanations and justifications provided for the specific regulatory changes in official documents (e.g., statutory text, ministerial explanations, preparatory materials (if there were), impact assessment reports (if there were and if available) and in reflections from the relevant epistemic communities active at that time (e.g., trade unions, employer organisations, chambers of commerce, business or professional interest groups, policy analysts). Ultimately, this mapping and labelling exercise should enable drawing general conclusions as to the model(s) followed by the national economy in Hungary and locate the actors responsible.

The baseline for this research exercise is the state of economic and social regulation in Hungary in 1990-1991. The mapping and the analysis of major legislative changes will be carried out with reference to the level of regulatory protection provided then. If necessary or justified, the regulatory reference basis can be shifted to (a) later date(s), or the impact of one-off significant events, such as economic and fiscal crises can be factored in. The research task will distinguish between regulatory areas where Hungary has different degrees of regulatory autonomy and discretion, and between different periods of the timeframe covered when different constraints applied to the regulatory activities of the Hungarian State. For a balanced coverage, we will examine, within the substantive scope of the project, regulatory domains that have been subject to different degrees of harmonisation obligations. Our aim is not to provide another scrutiny of the local business environment. Apart from major pieces of sectoral economic legislation, we will examine redistributive policies, labour regulation, and diffuse policy domains, as we aim to cover the non-market dimensions of the national economy too.

As a specific focus, the project will undertake an exploratory mapping of regulatory responses introduced to address the narrower and broader socio-economic challenges of digitalisation, or the lack of such responses. In these domains, there is a growing European impetus for pushing national economies towards particular institutional solutions, and possibly towards a specific general institutional model. It is, therefore, necessary to examine, using empirical methods, the regulatory frame developed in Hungary and its relationship with the EU’s emerging framework.

Research strand 3: Implementing obligations of local regulatory transformation

This empirical limb is included in the project with the purpose of complementing the general overview and analysis of significant regulatory alterations in Hungary with a focused scrutiny of a very specific and supposedly very intensive, and therefore highly controversial source of Member State regulatory adjustment. The interpretation and the enforcement of the EU fundamental freedoms by the EU Court of Justice have been the cause of fundamental regulatory changes in the domestic arena. The framing and the intensity of the Court of Justice’s scrutiny have led to obvious deregulatory consequences, unleashed regulatory competition between the Member States, or have confirmed national regulatory autonomy and thus allowed the maintaining of domestic institutional models. During the 12 months of completing this research strand, we will focus on the implementation of Court of Justice judgments handed down in preliminary ruling cases involving Hungarian economic and social regulation in the judgments of the referring courts and in any other subsequent rulings by lower and higher courts as well as in legislation. This research exercise will also follow up the fate, if any, of key rulings from the Court of Justice with potential regulatory implications for Hungary in the Hungarian legal system.

By carrying out this work, we aim to answer a number of questions concerning the details of regulatory transformation in Hungary. If the Court of Justice’s ruling had a deregulatory impact, was that identified and were its boundaries specified? Was the deregulatory consequence of the judgment given effect, and if yes, to what extent and with what caveats? If the Court of Justice’s ruling exposed national regulation to cross-border regulatory competition, was that identified and were its boundaries specified? What was the Hungarian response to the possibilities and constraints arising from regulatory competition? How autonomous was that response and how did that fit in with the national policy and regulatory framework? If the Court of Justice’s ruling confirmed national regulatory autonomy, was that identified and were its boundaries specified? Was the regulatory autonomy granted exploited and to what end was it used? What was the overall regulatory strategy of Hungary when confronted with such Court of Justice judgments? Did it act proactively in the national arena (to achieve compliance/exploit the regulatory leeway)? Did it choose to wait for an EU response (e.g., infringement procedure, or harmonisation proposal)? Did it initiate EU political action or try to shape the agenda of such actions?


In order to achieve the above mentioned research objectives, the following methodologies will be used in the project. The theoretical and theoretical/comparative research limb will rely on a combination of legal doctrinal, legal analytical, legal comparative (functional) research as well as on law and context research methodology. These involve working with the theoretical frame offered by EU economic and social constitutionalism in a doctrinal and legal analytical context and combining its findings with parallel analyses of EU economic integration of political science and political economy. These will provide the basis of the functional comparative exercise of exploring different national responses to EU-driven, or at least initiated, regulatory change. The research work planned for the empirical research strands will be carried out using primarily legal empirical research methodology. This involves identifying the relevant legal (legislative, judicial) material, selecting the relevant legal content (the level of protection afforded, the regulatory changes required etc.), organising the legal information thus gained in a mapping report developed specifically to record regulatory transformations. Further empirical research work includes the carrying out of a series of interviews with government experts responsible for general codification or EU codification work, and the judges that sat in cases in which a preliminary ruling was given by the EU Court of Justice.