Defragging the System: Functional Rescaling and Municipal Splits in Hungary

In 1990, a decentralized local government system was established in Hungary with the re-establishment of the fully autonomous elected local governments under the guiding principle of ‘one municipality – one local government’. The more than 3,000 local governments created a system that was both administratively and financially difficult to manage. The aim of the study is to examine the reform attempts of the central government to rationalize the operation of the fragmented system in the last 25 years. On the one hand, the cabinets had to reduce the effects of fragmentation. Since the autonomy of the local communities proved to be untouchable, the cabinets had to find ways to force the municipalities into more manageable units without violating their formal autonomy. While in the first two decades the central government dominantly used financial instruments to force local governments into effective units, one can observe a clear shift following the 2010 national election. After its landslide parliamentary victory, the right-wing Fidesz had the tools (the two-third majority) to introduce a number of dramatic changes, which affected local political relations and local governments’ operations and finance. The paper argues that the functional rescaling reforms and the changes in competences seemingly left the formal autonomy of local communities unharmed, but the result was a significant shift of local government’s position in the political system. On the other hand, the cabinets had to face further fragmentation of the system as many local communities expressed their wishes to split following the democratic transition. In the first decade, the municipal de-amalgamations were mainly results of the communist era, as local communities were forced to merge by the past regime. In these cases, the ‘one municipality – one local government’ principle helped the local communities to became autonomous. The study focuses on the municipal splits of the last 20 years, when the problems of local level fragmentation became apparent. It examines the changes in legal regulation on de-amalgamation and investigates every attempted (successful or failed) splits from 1997, by mapping the main drivers/motives of the splits, arguments of proponents and opponents and the causes of success or failure. The results show that while the splits were relatively easy to carry out in the first period and the success depended basically on the local community’s will, after 2010 (following the Fidesz cabinet’s new regulation), municipal splits became virtually impossible.