Accountability, governance and finance in Hungarian buy‐outs

countries of Central and Eastern Europe (CEE) has been the subject of considerable debate. Difficulties in establishing guidelines which enable regulated privatisation to avoid the abuses of spontaneous privatisation and meet objectives of fairness, efficiency and speed have frequently delayed the process. Such problems have been particularly evident in Hungary. Regulated privatisation started with the establishment of the State Property Agency (SPA), but initially each deal was strictly controlled by the agency. Only after self-privatisation was introduced did the extent of regulated privatisation increase significantly and then only for small and medium-sized enterprises. In such a system, where enterprises are sold rather than 'given away', purchases by incumbent management and employees have an important role to play, yet raise major issues concerning the achievement of privatisation objectives. The ending of the self-privatisation programme in December 1993 and the entry of Hungarian privatisation into a new phase provide an appropriate juncture at which to examine these issues.