Investing in human capital : Hungary"s transition to a market economy

to assist in Hungary"s transition to a market-based, private sector-led economy. The report: (1) examines the specific needs of three groups -- entrepreneurs and small businesses, the financial sector, and medium and large enterprises in the agribusiness, industrial, and commercial sectors; (2) assesses 17 Hungarian training institutions (7 institutes of higher education, 2 specialized Western-oriented institutions, 7 management training institutions, and a new "distance learning" institution; and (3) recommends a multi-year strategy to implement the proposed management training program. A.I.D. should aim at a multiplier effect, either by leveraging other funding or by building specific capacities in key Hungarian institutions. Scholarship and technical support to institutions should be defined in terms of time and expectations and should stress the potential for immediate impact, while not ignoring long-term benefits. Given Hungary"s strong and varied training infrastructure, the goal of assistance should be to upgrade the teaching quality of existing institutions rather than to select and train a small cadre of Hungarian managers or create a new institution. Support to the public sector should stress government units with a direct impact on private sector performance, e.g., regulatory agencies, whereas support to entrepreneurs, who have less immediate need for traditional management training, should focus on improving access to information and networking services. The program as a whole should target Hungarian firms as distinct from foreign joint ventures and should be coordinated with efforts of other donors, especially the Group of 24.