AS IS THE CASE ANYWHERE IN THE WORLD, in Hungary, the institutions of art are based on three foundations: the artist, the work of art, and the audience. The relations that operate between these three imply different types of institutions. In order to document the situation of contemporary art in Hungary properly, a few words have to be said about the 1980s. During that period, there were three main players in the Hungarian art world: the state museums (the Museum of Fine Arts, the Hungarian National Gallery, the Museum of Applied Art, the Hungarian National Museum, and a few other specialized collections, such as the Falk Art Museum and the Hungarian Scientific Museum); the so-called "Exhibition Halls" (state-owned) that presented the modern masters as well as contemporary art (the Palace of Exhibition, Ernst Museum, Vigadó Gallery); and, finally, commercial ventures such as the so-called Commission Company.

Initially, Commission Company functioned as a regular commission shop. The socialist regime was suspicious of this kind of activity because an art object did not, after all, bear any real value. Yet since this was evidently a flourishing business, the state produced legal institutions through which art trading could be managed. One of these institutions was the so-called Art Fund, a kind of "social net" for artists. Apart from the Art Fund, there was the monopolistic, state-supervised Fine Art Executive Company (Artex); Applied Art Company; and Art Gallery Company, the latter specializing in international trading. Artex was the only one among these institutions that was allowed to sell art abroad. In later years, it was joined by "Artbeourou". Together with Artex, Artbourou showed Hungarian art at international fairs, Biennali, and other festivals. Naturally, the Foreign Trade Ministry, which also organized joint exhibitions with the Art Fund, could intervene in these activities at any time.

In spite of the existing censorship, this system had the advantage that Hungarian artists could, at least to an extent, be present on the international art scene. The institutions mentioned above functioned like other state-owned firms in that there were norms to be fulfilled, sales quota to be met, all topped by a good deal of central control. For example, once it had been centrally decided how much art was needed in Hungary at a given point in time, the respective amount of art objects was ordered and bought by Art Gallery Company. The artists who were allowed to sell to Art Gallery Company were selected by a jury which was once again appointed centrally.
One must not forget that until 1989, Hungary was a socialist country with a one-party system that ruled not only politics but literally all of social and public life, including the arts.

By the late 1980s, political and economic life in Hungary began to undergo important changes and it looked as if the old system would collapse soon. During this period of change, Art Gallery Company with its rigorous set of rules found itself to be utterly out of touch with the local avant-garde. The members of the avant-garde almost never dealt with Art Gallery Company. Instead they tried to build their careers by themselves. When during the late 1980s a network of private galleries emerged, almost all the new gallerists focused on this previously repressed avant-garde.

During the 1980s, the museums and exhibition halls also went through important changes. First of all, the Hungarian art museums had to change their way of doing finances. Under the old regime, they had received subsidies from the State. These were hardly lavish, yet at least there was some kind of secure and regular income. Once the subsidies vanished, the museums were forced to modify their less-than-accommodating opening hours and to provide better services to their visitors. They began to issue leaflets showing their opening hours and exhibition dates. They even introduced guided tours, special hours for kids, and other such unheard-of amenities. At the same time they attempted to collect money from anyone who was prepared to give. Museums started to rent out exhibition halls to anyone who was willing to pay. They also tried to raise entrance fees, but since these were out of reach for the average Hungarian, they were lowered again. Compared to Westerns standards, visiting one of Budapest’s great museums is still very cheap.

After 1989, the official Hungarian art associations transformed themselves into trade unions (such as Fészek Klub or the "Nest Club"), artists’ associations, or other financially independent organizations. In 1992, Art Fund was divided into the Hungarian Art Foundation and the National Association of Hungarian Artists. The membership of this latter association is quite heterogeneous. Anyone who graduated from the Academy automatically becomes a member of the Association, regardless of merit. As a result, NAHA is distinctly conservative. In fact, the principal benefit it offers to its members is that once a year it organizes a large exhibition in one of Budapest’s larger exhibition halls. The other advantage is free entry to all state-owned museums and galleries.

There is now a separate section of the Hungarian Artists’ National Association, the Association of Young Artists (www.c3.hu/fkse) that was created especially for the younger generation (aspiring members must be under 35 years old). This association ("Studio") is one of the most successful Hungarian art institutions. The governing board of "Studio" invites foreign curators and art historians to whom it tries to "sell" the members of the association. They maintain small studios that can be rented for a symbolic price, and they organize slide shows and artists’ talks. Two or three times a year "Studio" organizes a large-scale curated exhibition. Recently it has tried to expand its business by inviting foreign artists to become members and exhibit their works. One of the better known regular events organized by "Studio" is the "Gallery by Night", a one-nighter exhibition that usually takes place at the time of the Hungarian Spring Festival in March.

The most flexible and inventive elements of the Budapest art scene are its galleries. In the late 80s, more and more private galleries opened. By 1994, nearly 200 galleries existed in Budapest. Almost half of them were simply antique shops, yet sometimes the owners of these shops became the best contemporary art collectors and gallerists. The galleries in Budapest can roughly be classified into seven groups: commercial (including the showrooms of the big hotels and restaurants); galleries established and run by artists; galleries that not only deal in fine and applied art but that also provide services such as interior design, publishing, or real estate; non- profit galleries owned by local governments; non-profit galleries controlled and financed by the ministry, such as museums, libraries, or universities; and finally, the galleries run by the various foreign culture institutes.

Naturally, almost every Budapest gallery specializes in some more or less well-defined style, trend, or era. For example, Bolt Gallery is a gallery for photography, while Artpool P60 exhibits Hungarian and international Fluxus, as well as mail art. Tolgyfa Gallery usually exhibits young applied artists. The manager of Liget Gallery, Tibor Várnagy, stages provocative shows focusing on social and political issues. There are some galleries usually owned by foreigners that focus on international art. Gallery owner Hans Knoll, for example, also runs a gallery in Vienna and tries to promote artists in both countries. Gallery 56 is run by the American-born Hungarian Samuel Havadti who also happens to be the husband of Yoko Ono. The most interesting exhibits, however, take place in those galleries that are owned by the artists themselves. Tzolto (Fireman) Gallery was established in 1991 by a group of young, dissident artists who took over an old, ruined bath house where they began to stage performances, exhibitions and festivals of alternative music. Later they moved into an abandoned cinema, the Uljak, and started calling themselves the "Ujlak Group". They also invited other artists to show in this rather unique exhibition hall. After the building was razed, the artists took over an old food factory in Tzolto Street (hence the gallery’s name). In 1997, this building was demolished, too. When the local government decided to tear down the factory, the gallery was eventually closed. However, the artists managed to secure an alternative place for themselves. The gallery is now called the "U.F.F." and has become a regular exhibition hall that shows mostly young progressive artists from the margins of contemporary art.

Apart from museums and galleries, the foreign culture institutes also play a role in the Budapest art scene. For instance, the British Council, L’institut francais, the Austrian Kulturinstitut, and Pro Helvetia provide great financial support for exhibitions and artists-in-residence-programs. Through a program called Soros Contemporary for Art (SCCA), the Soros Foundation has also been supplying financial aid for the curating of exhibitions, the publishing of catalogues and art magazines, the creation of a database of Hungarian artists, etc. Parts of this SCCA have been transferred to a new program within the Soros Foundation, the C3 Center for Culture and Communication (www.c3.hu), which is now turning into an independent media institution. C3 represents the high tech media art in Budapest. The institution itself works as a media-lab where artists can apply for using the computers and digital facilities of C3. In addition, C3 organizes yearly large-scale media events and exhibitions ("Butterfly Effect"; the Flusser Symposium, or the ongoing Perspective exhibition [www.c3.hu/perspektiva]). Thanks to the persistent activity of C3, almost every contemporary art gallery in Budapest now has internet access and maintains its own homepage on the C3 server. In this way, they can publicize artists and exhibitions to a much broader audience. Moreover, new art magazines have been created exclusively for the web, such as "Nightwatch" (www.sztaki.hu/nightwatch).

The government still plays a crucial role when it comes to subsidizing art. Unfortunately the Hungarian tax system does not at all encourage support for the arts, which is why only the second-rate art dealers are able to survive. Experimental non-profit galleries can barely exist. There are no tax reductions for buying art or for the support of artists. In Hungary, the notion of government subsidies is problematic, since it recalls the censorship and the kind of centrally controlled art familiar from the Communist regime. When a democratic government makes a decision as to which artist or which institution to support, it necessarily becomes inconsistent with itself. Needless to say, the decision to subsidize the Ujlak Collective was not a majority decision.