EU accession in 2004 has confirmed Hungary’s successful transformation from a centrally planned economy into a functioning market economy operating within the framework of a multi-party democracy. However, the country’s output per capita is still well below the EU average, and public expenditures exceed revenues by a large margin. This report looks at ongoing efforts to restore fiscal balance and promote sustainable growth to accelerate the convergence process. Drawing on the experience of OECD member countries it proposes structural reforms to achieve these objectives, covering the following topics: fiscal policy, health care reform, pension reform, employment and social policies, education reform, small and medium enterprise promotion, innovation, energy policy and the environment, public administration reform, and e-government.

Chapter 1. Overview: Reforms for Stability and Sustainable Growth
Chapter 2. Fiscal Policy: Deficit Reduction and Making Taxes and Expenditure More Growth Friendly
Chapter 3. Healthcare Reform: Improving Efficiency and Quality of Care
-Annex 3.A1. International Experience regarding the Function of Gatekeeping
Chapter 4. Pension Reform: Providing Old-Age Income Security in the Face of Population Ageing
Chapter 5. Employment and Social Policies: Making Formal Employment More Attractive
Chapter 6. Education Reform: Improving Human Capital Formation
Chapter 7. SME Promotion: Increasing Competitiveness and Fostering Successful Entrepreneurship
Chapter 8. Innovation: Fostering Rapid Productivity Growth
Chapter 9. Energy Policy and the Environment: Responding to the Threat of Climate Change
Chapter 10. Public Administration Reform: Improving the Performance of the Public Sector
-Annex 10.A1. Examples of Public Service Delivery in Rural Areas in OECD Countries
Chapter 11. E-Government: Using Technical Progress to Improve Public Service Delivery