ECONOMIC REFORM IN HUNGARY 9 pate in international economic ralations on a larger scale. In particular terms, enterprises have been given autonomy to trade both inside and outside Hungary and make profit at prevailing domestic and international market prices. In order -to be successful in this endeavour, enterprises have to be conscious of cost and quality, maintain efficiency and must derive economic advantages from a spirit of competition with other enterprises for a share of the domestic and international market. The main efficiency criterion in performances of enterprises from the days of NEM has been profitability. It is still the same today. But all the elements of autonomy have been set within the constraint of a regulatory mechanism. A DIGRESSION ON 'NEITHER PLAN NOR MARKET' MODEL OF HUNGARY DURING NEM Tamas Bauer, a noted Hungarian economist, has characterised the Hungarian model as neither 'plan* nor 'market* during NEM. By plan he meant the particularities associated with the Soviet type of planning whereas by market he wanted to mean the specificities of a capitalist market economy. 'It is the lack of aggregation and disaggregation in planning', Baucr says, 'the fact that plan figures are submitted only for consultation and not for approval, and that enterprises generally have to buy materials and not to apply for them, that makes the system different from traditional Soviet type planning'.2 Bauer's contention therefore is that a plan does not remain a plan if it does not correspond to elaboration, formulation and approval as in the Soviet Union. It is correct as Bauer argues that bargaining has ceased to be the main activity of enterprise managers and state officials with regard to micro-plan tasks.3 In the Soviet planning procedure this used to be until recently a very important activity. In fact what was usually known as 'counter-planning' in the Soviet practice has wide room for bargaining although by definition a 'counter plan' was an improved plan. NEM in Hungary allowed much more flexibility and a precise correspondence between ex-ante and ex-post plan figures was not a requirement. This was definitely an important deviation from the hitherto existing Soviet type of planning. With regard to the nature of market within the framework of NEM one distinct deviation from the Soviet type of planning is the emergence of the market for producers' goods. But the existence of two spheres of money, that is, enterprise money and household money, is a great hindrance to the development of commodity-money relationship to the degree required for the establishment of a developed market. At present however there is a great pressure from knowledgeable circles that the two spheres of money should be merged and no one will be surprised if this takes place very soon. Even without this problem there are many constraints in the market mechanism that NEM created.