“While informal relations between economic and political actors are prevalent in post-communist economies, proper tools for their quantitative measurement are lacking,” our researchers, Balint Madlovics and Balint Magyar write in their article in Acta Oeconomica.

The paper elaborates the concept of ‘relational economy,’ and discusses “the problem of measuring its peculiar phenomena by existing direct and indirect data.” Towards a set of indices for relational economy, the authors consider “the use of proxies in three ways: (1) a radar chart composed of specific company data; (2) ‘moments of truth’ when property movements reveal an actor's de facto ownership status; and (3) ‘moments of truth’ when adoption to or exclusion from the informal patronal network is accompanied by a significant change in financial situation. Illustrations to each of the three methods are provided from the case of Hungary after 2010.”

Download the paper here.