Hungarian Local Government

Abstract

he transition in East-Central Europe from the centrally planned economy to the market economy turned out to be a very complex process. The debate of shock therapy versus gradual change has been overcome. Recent approaches to the transition focus on the economic crises and the necessary restructuring process for the adaptation to the world market system, termed as ‘structural adjustment’. However, recent analyses realized that successful transition had to go deeper into the social life of these societies and that the behaviour of the economic actors had to be radically changed in order to achieve the expected result; this is termed ‘institutional adjustment’. This chapter will focus on both the structural and institutional adjustments of the local government sector.

The first version of the chapter was prepared for the Conference on Regional and Inter-regional Development in Transition Societies: Economic, Legal and Political Dimensions, 13–15 June 1996 at the University of Essex. The chapter uses studies and research done by MRI (Metropolitan Research Institute, Budapest) and The Urban Institute, Washington sponsored under USAID programmes to Hungary. The author would like to thank Judit Kálmán, Robert Kovács and Andrea Tönkö, researchers at MRI, for their contributions.