This paper examines the experience of Hungary with the development and implementation of its industrial policy. Hungary is a particularly interesting case study for several reasons. First, industrial policy is particularly important for Hungary. It is a small country with few resources beyond bauxite and fertile soil. Thus, like Japan, it is highly dependent on foreign trade for its economic welfare. Second, Hungary has undertaken significant reforms in its economic system, moving from the dirigisme of Soviet-style central planning in the 1950s to the market-oriented reforms introduced by the New Economic Mechanism (NEM) of 1968 and the additional reforms implemented In the 1970s and 1980s. Finally, Hungary is interesting because it differs from other East European countries in that agriculture appears to be-if not a conscious element of Industrial policy per se-at least a sector perceived to be progressive and Important to Hungary's foreign trade performance.