The Thorny Path to Implementation: Bismarckian Social Insurance in Hungary in the Late 19 th Century

Abstract

This article analyses the first Hungarian social insurance law, enacted in 1891, which made health insurance compulsory for all industrial employees (including commercial clerks) in Hungary. Its timing and content suggest that it was modelled on German and Austrian legislation. But, in contrast to Germany and Austria (where the implementation of the legislation was quite successful), implementation of the legislation in Hungary encountered several difficulties. This is the reason why the proportion of de facto insured individuals in Hungary was much less than in Austria and Germany.

The article attempts, first, to fit Hungarian social insurance legislation into the wider context of European welfare development. It gives a precise definition of de jure insured persons with particular reference to the situation of day labourers. It then analyses some organisational issues, e.g. the funding of the ‘district insurance offices’, and the crucial problem of establishing an effective procedure for collecting contributions.

The failure of the latter and the shortage of doctors led to failures in implementation. By the turn of the century, the majority of the de jure insured had not become de facto insured and many of those who were insured did not get sufficient health provision. The first problem was a long lasting one: if one compares the proportion of insured persons in Austria and Hungary over time, the difference actually widens in the period before World War II.