Controlled Decentralization. Local, Regional, and Central Power in the Making of Hungarian Regional Development Policy

This report analyzes the changing institutional framework for regional policy making in Hungary. Using primary and secondary materials, it examines efforts to prepare a new inter-mediate tier of government for planning and executing socio-economic policy. Although there were significant internal forces shaping this process, regionalization has been strongly influenced by the cohesion programs of the European Union. These programs stressed the importance of building up the capacity of NUTS II regions for establishing development priorities and operating through principles of partnership between private, social, and public sector actors. This report examines domestic settings for regional policy, providing detailed information about South Transdanubia, and then the implementation of the major pre-accession funds, the first National Development Plan, and the first sectoral and regional operational programs. This is followed by a critical examination of the changes brought in by the second National Development Plan 2007-2013. The report confirms that EU funds had an extraordinary impact on institutional building and transformation in Hungary. However, the channeling of post-accession funds has been hindered by the weakness of regional institutions, leading to reluctance by both the central state and the EU to confer programme autonomy on the regions.