"When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind; it may be the beginning of knowledge, but you have scarcely, in your thoughts, advanced to the stage of science, whatever the matter may be."
Lord Kelvin

The EU funds, Viktor Orbán, and Lőrinc Mészáros, the Hungarian gas fitter: four graphs

8 March 2019

 

CRCB. 2019. The EU funds, Viktor Orbán and the performance of firms owned by Lőrinc Mészáros, the Hungarian gas fitter, in the Hungarian public tenders 2005-2018. Budapest: CRCB.

Based on the empirical analysis of the Hungarian public tenders we pointed out  that the EU funding has perverse effects in Hungary: it helps to reduce the intensity of competition, to increase the level of corruption risk and the weight of price distortion, and it generated the growth of the estimated direct social loss due to weak competition and high level of corruption risks from 2009 to 2016. The analysis on public tenders won by companies related to cronies and family members of the Hungarian Prime Minister Viktor Orbán (Lőrincz Mészáros, István Garancsi, István Tiborcz and Lajos Simicska) shows  that the crony companies have significantly favourable conditions during public tenders than other companies. The corruption risk was significantly higher and the intensity of competition was significantly lower in tenders won by crony firms than other tenders won by ordinary Hungarian companies. In the briefing we included only four graphs concerning the role and performance of one of Orban’s best friends, the gas fitter, Lőrinc Mészáros. The last digits test shows that the price distortion occurs significantly more frequently in the contract prices set by Mészáros then in contract prices set by other winner. This is a clear sign of overpricing.

Lőrinc Mészáros is a close childhood friend of the Hungarian Prime Minister; a gas fitter; the former mayor of Felcsút (the village where Viktor Orban spent his childhood); since 2013 a Hungarian billionaire. ”He founded a small gas-fitting company in Felcsút, the hometown of Prime Minister Viktor Orbán, in 1990. Orban, who founded the Ferenc Puskas Football Academy, tapped Mészáros to be its president. Mészáros’ gas-fitting company, Mészáros & Mészáros Ltd, is now a big player in the construction market thanks to contracts from the government.”
See [ https://www.forbes.com/profile/lorinc-meszaros/?list=billionaires#158d7f7c4868 ]

 

A briefing in English (pdf)
A briefing in Hungarian (pdf )