In 1962, six years after the Hungarian Revolution of 1956, the 8th Congress of the Hungarian Socialist Workers' Party declared the period of "consolidation of socialism" after 1956 to be over and that the "foundations for the establishment of a socialist society" had been achieved which enabled a general amnesty of most people sentenced in connection with 1956. The party, under János Kádár, gradually curbed some of the excesses of the secret police, and introduced a relatively liberal cultural and economic course aimed at overcoming the post-1956 hostility toward the Kádár government. In 1966, the Central Committee approved the "New Economic Mechanism" which eased foreign trade restrictions, gave limited freedom to the workings of the market, and allowed a limited number of small businesses to operate in the services sector. Though liberal in comparison to Stalinist socialism, the first relaxation of economic control was far from posing the same threat of the 1956 reforms. Official policy employed different methods of administering the collectives, leaving the pace of mechanization up to each cooperative. Additionally, rather than enforcing the system of compulsory crop deliveries and of workdays credit the collectivizers used monthly cash wages. Later, in the ‘60s, cooperatives were permitted to enter into related and then general auxiliary businesses such as food processing, light industry, and service industry.
Goulash Communism showed a far greater concern for public opinion and an increased focus on the present (rather than future) material well-being of the citizens than had been the case in the period preceding 1956. It provided a wider latitude for dissent within the limits of the socialist system, modified the role of the party in the development of socialism (now interpreted as "serving" rather than "commanding"), reduced the formality of relations between the party and the populace at large, increased the scope of societal self-expression and self-management, and refined the guiding Marxist-Leninist ideology with modified means of dissemination. Marxist-Leninist ideology is invoked in the desire to reform as seen in Imre Nagy’s 'Reform Communism' (1955-6). He argues that Marxism is a “science that cannot remain static but must develop and become more perfect”. He attributes Marx to having created a method, meant to guide yet not entirely encompass socialism or its development. “The theory of Marx - as Lenin stated – gives general guiding principles, which must be utilized in Britain in another fashion than in France, in France differently than…”. This interpretation was not shared by the Soviet leadership, Khrushchev’s response to Hungary in 1956 and Brezhnev’s to Czechoslovakia in 1968 and the resulting Brezhnev Doctrine stating that though “each socialist country had the right to determine the concrete form of its development along the path of socialism by taking account of the specific nature of their national conditions… the Soviet Union would not tolerate deviation from the principles of socialism and the restoration of capitalism”.
Being a comparatively well-organized country in the East bloc, Hungary was the destination for tourists from other communist nations, for whom visits to the West were much more difficult. Queues for groceries, for instance, were virtually non-existent, unlike in other communist countries in the 60s and 70s. Hungary's economic resources were mobilised to better satisfy consumer demand by providing a more extensive assortment of consumer goods. Some economic reform measures were introduced to integrate limited market mechanisms into the framework of the planned socialist economy. An unfortunate result of this policy were rising economic stresses and high indebtedness which became evident by the late 1980s. Yet these economic crises were prevalent throughout the collapsing communist world. Hungary’s mild diversity left it slightly better equipped.
Since 1989, after the general disintegration of Communist control in Central Europe, Hungary has adopted a Western-style democratic political system and introduced thorough reforms aimed at establishing a capitalist market economy, enabling European Union membership and integration into a global market economy.