Financial nationalism and its international enablers: The Hungarian experience

Viktor Orban and his centre-right Fidesz party won Hungary's April 2010 parliamentary elections in a landslide, running on a nationalist-populist platform of economic self-rule. This paper explores Hungary's financial nationalist turn and its surprisingly successful resistance to IMF and EU pressures to change course. We open by theorizing financial nationalism, and then trace its ideational roots and contemporary character in Hungary. We subsequently argue that two international factors ironically enabled Orban to take his financial nationalist ideas from theory to practice: 1) IMF and EU policies that first contributed to Fidesz's electoral victory and then made it difficult to counter Orban once in power; and 2) the tolerant behavior of international bond markets. In particular, Orban's willingness and ability to use unorthodox, financial nationalist policies to control government deficits and debt both reduced EU and IMF leverage over Hungary and encouraged bond markets to overlook the unsavory politics that produced those numbers.