Because of the NEM, Hungary in the 1980s had a higher ratio of market mechanisms to central planning than any other Eastern Bloc economy.
Many Soviet and Eastern European people enjoyed going to Hungary (for example, on work assignments or on vacations) because of the economic and cultural environment there.
The tensions and harmonies between market mechanisms and central planning, with neither having sole control, are a perennial challenge in all societies that temper capitalism with socialism or vice versa.
On 7 May 1966, the Central Committee of the HSWP announced Kádár's plans for the reform of the economy, known as the New Economic Mechanism (NEM).
The NEM represented a move away from the Soviet economic system of compulsory plan indicators in favor of a policy that states profits as the enterprise's main goal.
Free prices were assigned to goods that formed small parts of individual expenditures or were regarded as luxuries.
[1] Because of the pre-existing quota system which placed an emphasis on quantity, not quality, Hungarian goods were inferior and did not meet Western technological standards.
Decentralization provided enterprises with the opportunity to better align with the world market by giving them more freedom in deciding which products and technologies to invest in and manufacture.
[2] The primary concern of the New Economic Mechanism was in improving foreign trade and establishing a relationship between success in exportation and a firm's profitability.