From Reciprocal Social Networks to Action Groups for Market Exchange : “Spontaneous Privatization” in Post-Communist Hungary

Following previous research on the significance that social networks have had for the economic and social survival of Latin American and Soviet state-employed middle classes, this paper explores the role of social networks (connections) on the process of privatization and market liberalization of Post-Communist Hungary. Based on former academic studies and on field research conducted for several months in Budapest, we will try to show that social networks are central intermediary structures on which individuals and groups construct solutions that allow them to cope with the deficiencies resulting from the formal system. From this perspective we will explore the importance of manager’s connections in the first period of the Hungarian privatization process known as “spontaneous privatization”.