Recentralization in Hungary: Consequence of an Authoritarian Regime or an Economically Driven Step?

Abstract

The article analyzes the reasons and causes of the recentralization process in Hungary, which has been taking place since 2010. The paper highlights the legislative, economic and political aspects of functioning of decentralized Hungary. It was pointed out that Hungary demonstrated an extremely strong fragmentation of governance, which prevented the efficient provision of administrative services at the local level. Moreover, there was an inconsistency between the wide, legally set autonomy, lack of financial resources for the implementation of all the given competences and a relatively strong political dependence on the leading national political parties. The consequences of such policy were demonstrated as they have actually led to the incapacity of a large number of Hungarian communities due to their economic and technical incapacity. Because of that the incapable communities were forced to take out loans for the implementation of their mandatory duties and provision of administrative services. The situation became even more acute after the 2008 crisis, when the majority of the communities were not able to pay off the loans as they were predominantly issued in foreign currency. The authors have also analyzed the positive (increasing the capacity level of communities, “ranging” the communities depending on their size, transfer of provision of a number of services to a higher, more economically viable, level) and negative (threat of violation of citizen rights and the establishment of an authoritarian regime) sides of recentralization. Also analogies were drawn with the process of power decentralization in Ukraine and the rather professional approach to the implementation of the stated reform was emphasized. Namely, the involvement of international donors and projects of international technical assistance also with the aim of receiving advisory support, which allowed to take into consideration at least part of the mistake of decentralization in Hungary.