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From Financial Centralisation to Political Centralisation. The Focal Points of the Municipal Reforms from the Transition Until Present Day Hungary

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Contemporary Trends in Local Governance

Part of the book series: Local and Urban Governance ((LUG))

Abstract

After the transition in 1990, Hungary copied Western European examples in the political sense. As a result, the traditions of German and French public administration exerted a considerable impact on the Hungarian municipal system. However, Hungary has recently turned away from this trend and developed its public administration structure in a state-centred way. The structure, which was decentralised at the beginning, displayed signs of fiscal centralisation at first, with elements of political centralisation becoming more and more dominant. From the aspect of our examination, the course that the municipality system has run within the relation system of central power since the transition era is a core issue. For independent research, we examined how the population perceived access to local public services and what subjective population expectancies were associated with the objective conditions of the public services system. How important is it for them whether the given service is provided by the state, the local authority, a non-profit or a for-profit organisation?

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Notes

  1. 1.

    Le Galés 2011: 143.

  2. 2.

    In this form, the municipal formal-legal institutions are mixed with complementary social systems. The citizen in this case is not only the market consumer of the common wealth and services but also an active agent in consuming them – while (s)he practices these roles not only as a voter or as a “citizen”.

  3. 3.

    Osborne 2010.

  4. 4.

    Both the governance paradigm and new public management, that dominated the Anglo-Saxon and Western European public administration for a long time, are part of the same neo-liberal economic philosophy that tried to harmonize private interest and public good, drawing a parallel by this between “political” and “private” market, as well (Johnson 1999).

  5. 5.

    G. Fodor and Stumpf 2007, 2009.

  6. 6.

    Kákai 2013.

  7. 7.

    Kákai 2013.

  8. 8.

    This means that the state offers possibilities, outsources, involves, bargains, and builds partnerships and networks by which it saves or mobilizes public sources.

  9. 9.

    Peters and Pierre 2006.

  10. 10.

    Peters and Pierre 2006.

  11. 11.

    Dreschler and Kattel 2009.

  12. 12.

    The main issues and content of the reform cycles are properly summarised by Krisztián Kádár’s paper, introducing the main public administration ideas and output of certain governmental eras. (Kádár 2006)

  13. 13.

    Integration of the exercise of functions, both from the point of view of the organisation of public administration and in terms of the politics of public administration.

  14. 14.

    It is important to emphasise the fact that this distribution is not only apt to describe territorial structures.

  15. 15.

    This means that the constitution acknowledges the right of self-governance of the settlements, however, it does not give any content details, not even in terms of municipal tasks. This model assures a narrower scope for local authorities (e.g. the operation of municipalities can only be regulated by act, thus the charging of taxes, the method of collecting it as well as the authority and income resources of local governance).

  16. 16.

    Perhaps the term decentralised Unitarian is more precise.

  17. 17.

    Government Financial Statistics.

  18. 18.

    The proportion of the income of governments amounted to 16% of the complete income of the governments with a view of GFS; this proportion exceeded 31% by 2008. The greatest part within this (the proportion exceeded 54% of the incomes in the given year) is represented by local taxes (this proportion was only 15% in 1991).

  19. 19.

    It was approximately 18% after the change of the political system. Today (2013), it has decreased to 8%.

  20. 20.

    Ending in 2003.

  21. 21.

    According to the Report no. 0012 of 2000 of the State Audit Office of Hungary, the central government burdened 3464 functions and responsibilities on the municipalities between 1195 and 1999, which were regulated in 351 legal measures (including 133 acts). (www.asz.hu/ASZ/jeltar.usf).

  22. 22.

    This practically meant that 23–27% of state expenditure was used at the local level, which meant 12–13% of the GDP (Horváth et al. 2014b: 337). By international comparison, this was a strong expenditure decentralisation (the average in the 27 EU countries was 17 percent).

  23. 23.

    According to the data of 2012 by the Central Statistical Office, in 54% of the local municipalities, the population was below 1000 and was less than 5000 at 37% (1152). All this means that in 90 percent of the settlements, the population was under 5000.

  24. 24.

    Act. No. CLXXXIX. on the local governments of Hungary (Mötv.).

  25. 25.

    The core of this and its difference from New Public Management (NPM) is that while NPM strives to make the state switch over to market operation principles, the neo-Weberian model focuses on reconsidering the role of the state in terms of making it stronger.

  26. 26.

    In this spirit, the requirement of qualitative services and their professional provision, the extension of citizen and public administration consultations and the dissemination of result-based attitudes were given a stronger emphasis than in the previous governmental periods.

  27. 27.

    The model calculations made by Ilona Pálné Kovács et al. (2014) proved “the bigger the settlement, the more services provided” connection that shows bigger leaps in the population categories of 2000 and 10,000 people; this picture is in line with the rules of the obligatory responsibilities allotted to local governments (Mezei 2014: 5).

    http://docplayer.hu/5950391-Zarotanulmany-a-hazai-onkormanyzatok-finanszirozasi-helyzeterol.html (downloaded: 2 July, 2018.)

  28. 28.

    Since the year 2010, in the course of the fundamental transformation of the decentralised system, the amount of tasks performed at the locality decreased by 29%.

  29. 29.

    The research was implemented within the framework of the flagship project no. KÖFOP-2.12.-VEKOP-15-2016-00001, entitled “Public service development basing good governance ”.

  30. 30.

    This analysis method treats the 11 statements as having equal importance, showing the primary atmosphere in connection with the examined topic. However, because of the high number of hesitant persons, it is worth investigating the finer opinion structures and interconnections hiding in the background. Doing a factor analysis, we have discovered two, clearly separated opinion dimensions behind the 11 attitude questions. The first one includes the statements examined from a quality and efficiency perspective whether it is the local government or the state that should provide local services. The second group includes the questions concerning task division from the financial and cost efficiency aspects. With the help of the two factors created this way, we were able to do a cluster analysis and examine the patterns appearing along these opinion dimensions in Hungarian society, along with the type and size of the groups characterised by these patterns.

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Kákai, L. (2020). From Financial Centralisation to Political Centralisation. The Focal Points of the Municipal Reforms from the Transition Until Present Day Hungary. In: Nunes Silva, C. (eds) Contemporary Trends in Local Governance . Local and Urban Governance. Springer, Cham. https://doi.org/10.1007/978-3-030-52516-3_4

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