Introduction

After decades of the Communist regime and the Soviet-type council system, a decentralized local government system was introduced in Hungary in 1990. As autonomy at the local level was considered a cornerstone of democracy, local governments gained wide autonomy in terms of their constitutional protection, service-providing competencies and (formal) financial capacities. The extensive decentralization which occurred during the democratic transition resulted in many deficiencies on the sub-national level: the local level was highly fragmented into more than 3,000 local units without any substantive differentiation in tasks between them, while the middle level (county governments) was designed to be weak with basic service-providing tasks, and thus could not become a strategic planner and coordinator of the regions (see Dobos, 2016). In relation to their tasks, the local governments were under-financed and the fragmented local level could not provide services in a cost effective manner.

Based on the initial experiences of the local governments’ functioning, scholars and practitioners rapidly came to a consensus about the need for reform of the sub-national institutions (Pálné Kovács, 2016a). However, as the prerequisite of a comprehensive local reform was the political consensus of the national parties (as any major changes required a two thirds majority in the parliament), successive national governments were forced to use financial measures to lessen the fragmentation and to enhance the effectiveness of the system (see Dobos, 2020).

In 2010, Viktor Orbán and the Fidesz-KDNP party-alliance achieved a landslide national electoral victory with a two thirds majority in the parliament and quickly began to carry out reforms that fundamentally changed the functioning of the sub-national levels. While the formal autonomy of the local governments remained intact, the reform (which was carried out between 2010 and 2014) affected the fields of service-providing and finance, and fundamentally changed their position within the political system (vertical relations). In addition, the reform affected the relations of the local actors (horizontal relations) by strengthening the mayoral position.

The aim of this chapter is to map these vertical and horizontal changes of the Hungarian local government system. To achieve this, I will use the results of three international empirical research projects: the data of the Local Autonomy Index (LAI) (see Ladner et al, 2019) for the vertical relations and the findings of the two POLLEADER projects (see Bäck et al, 2006;