Zoltán Pogátsa Aborted Regionalisation in Hungary

SÜDOSTEUROPA, 53. Jg., 4/2005 Zoltán Pogátsa* Aborted Regionalisation in Hungary 1. Introduction Membership in the European Union has brought about significant changes for Central European new member states in terms of regional policy and subnational governance structures. Accession countries agreed to adopt the acquis through a process of "self-Europeanisation." This process was supported by the general electorate and elites. Throughout the accession process the central government largely monopolised the process of negotiating with EU bodies, namely the Euro- pean Commission. Accession state governments thus maintained a much stronger gate-keeping role than other governments in EU member states. Throughout the accession process almost all EU-related news that had reached the population at large were about the government’s negotiation efforts in Brussels vis-à-vis the Commission. Sub-national entities in these states were non-existent or lacked competencies and political power. The first wave of decentralisation came to Central Europe with transition. Real autonomy was restored to local municipalities, at least in political, legal and administrative terms, if not necessarily in financial terms. The central government became stronger, and local governments also benefited, but the mezzo level came out of this phase as a loser. A second wave of decentralisation was connected with the EU accession process, particularly conditions related to regional policy and to the principle of subsidiarity. Regional reforms were carried out to conform to structural fund objectives and the NUTS system. Strong financial incentives also played a part as governments and other actors realized the additional source of funding they could gain from structural and cohesion funds. It looked for a long time as if this time the mezzo level would be the main beneficiary of the EU accession process. The question of the public administrative structure in Hungary has remained unsolved in Hungary, however, even with the pressures of EU integration and the management of the structural funds. This paper attempts to analyse these changes in Hungary throughout the 1990s transition to Hungary’s accession to the EU. The main question the paper poses is whether the window of opportunity for regionalization opened by the EU accession process has been closed – or, in other words, do we see "aborted regionalization" in Hungary, as well as in other new EU member states? The paper suggests that the two outstanding questions are related to the lack of a real mezzo level of governance between the local level and the central government and the threat to local government sovereignty through increased dependency on the centre. These issues are the essence of the future of * Dr. Zoltán Pogátsa, University of Szombathely / Berzsenyi Dániel Főiskola, Szom- bathely Aborted Regionalisation in Hungary 521 self-governance in Hungary. The fact that EU accession makes these problems more pressing only helps to create awareness and debate. Without these pressures, the central government encounters no resistance or strong local or regional initia- tives. 2. Hungarian Administrative Structure The planning, programming and implementation of EU structural policies are relatively new tasks for the public administration of new EU member states. In many of them regional policy has been in existence for decades, but in a very different form than EU regional policy. Firstly, development bodies have had very limited resources at their disposal. Secondly, development policy during the decades of communism was greatly determined by the logic of the planned economy. Free market mechanisms were almost non-existent. Regional policy in states like Hungary, where it existed at all, was dominantly characterised by attempts to even out development amongst the different parts of the country. This basically involved a redistribution of funds away from better performing regions towards disadvantaged ones. It was almost never driven by the "pull" of development ideas and projects in the subsidized regions. In this sense absorption capacity never really presented a problem: allocations were decided in the centre, and they were to be spent, regardless of efficiency or necessity. The most important principles of EU structural funding present a radical de- parture from the logic of regional policy in the previous regime. In a centrally planned economy subsidiarity goes directly against the logic of the system. Addi- tionality is almost a senseless term when all resources and all sources of funding are state owned and come from the same central bodies.1 Concentration was em- phasised, but never really enforced. As for partnership, not only was it lacking, but it was also completely against general practice in a country where the ideo- logically motivated party state operated secretively, and civil society and private partners were almost completely absent. It is therefore important to state that the implementation of structural funds, as well as the decentralisation it involves, re- quires a significant learning process on the part of public administration. The process of institution building is therefore just as important as the adop- tion of the acquis itself. A member state has relative autonomy in deciding how it chooses to manage structural resources. The General Regulations stipulate that the member state might decide to carry out programming at both a central and a regional level. It might also set up a more centralised or a decentralised system for implementation and monitoring. Numerous arguments support either solution. On the one hand, it might be argued that a more centralised approach can be more 1 It must be mentioned here that from 1968 onwards Hungary, alone in the Eastern Bloc, experimented with a certain degree of decentralisation and various elements of market co-ordination, which mitigate the strength of these statements. However, these experi- ments were never allowed to break away from the essential logic of the centralised system. 522 Zoltán Pogátsa efficient. On the other hand, decentralisation is important for a number of rea- sons: the consolidation of democracy, the development of partnership, and last but not least the facilitation of economic efficiency. As a consequence we need to consider the possibilities for either solution based on past developments in the Hungarian system of public administration. The most important characteristic of public administration and regional policy in Hungary today is that they are excessively centralised. Out of all the resources available in the national budget for regional development approximately 4.5 billion Hungarian Forints are administered by the ministries at a central level. Only 2.8 to 3 billion are allocated to lower levels of administration. These lower levels consist at the mezzo level of "planning and statistical" regions, counties, peculiar institutions called "towns with county rights," and at the local level of local municipalities. Table 1 summarises the hierarchy of the Hungarian territorial and administrative units, including average size and population, and a comparison with EU-15 averages. Table 1: Hungarian Territorial and Administrative Units Unit NUTS No. State I 1 Region II 7 County III 19 County right towns 22 Microregion IV 150 Municipality V 3130 A. Municipalities Municipalities as autonomous units benefited greatly from transition. Their rights are guaranteed by Act LXV of 1990 on Local Governments. Smaller municipalities were, for the first time, granted the experience of local autonomy and self- governance. This often resulted in the emergence of local political power, espe- cially initially.2 During the Communist regime smaller settlements were force- fully brought together and controlled by a single municipal council. Many small municipalities that had not been priority areas for development in the previous 2 For an overview of the municipal system see Csefkó, Ferenc: A helyi önkormányzati rendszer [The System of Local Self-Government]. Budapest, Pécs: Dialóg Campus, 1997). For a critical assessment, see Pálné Kovács, Ilona: Regional Development and Local Government in Hungary. In: Hajdú, Zoltán (ed.): Regional Processes and Spatial Structures in Hungary in the 1990s. Pécs: MTA RKK, 1999, pp. 53–76; Pálné Kovács, Ilona: The Basic Political and Structural Problems in the Workings of Local Govern- ments in Hungary. MTA RKK Discussion Papers No. 14. Pécs, 1999. Aborted Regionalisation in Hungary 523 regime were now in the position to carry out much needed developments in public and social infrastructure. This in turn increased the legitimacy and the stability of the system. In fact local autonomy has become so important for settlements that they have continued to defend their sovereignty up until today. They have re- jected initiates to form common municipalities amongst several settlements even where the situation would have justified such a step (a common phenomenon not only in Nordic countries, but also in Portugal and neighbouring Austria). Hungary today consists of some 3130 municipalities, many of them very small. Nearly 40 percent of all Hungarian municipalities have populations under 10,000 inhabitants. The Hungarian average – 3,269 inhabitants – is amongst the lowest in the EU.3 Only Finland, France, Greece and Austria have smaller average number of inhabitants. While significant variation exists in Europe in the size and structure of municipal government, two general patterns emerge. The

Load more