Economy, demography and urbanization, The urban policy context in mid-sized metropolitan areas – Europe

The cases of four capitals, Budapest, Zagreb, Tbilisi and Belgrade presented in this paper help to understand the challenges faced by cities in the post-communist part of Europe. Budapest in Hungary and Zagreb in Croatia are cities in member states of the European Union (EU). Belgrade is the capital of Serbia, a candidate country for membership in the EU and Tbilisi in Georgia is a city in a Eastern Partnership Agreement (EaP). All cities are capitals and not only is their recent history similar, but their early development also shows similarities due to their geographical settings, forming gates between East and West and being melting pots of cultures, religions, and traditions. All inherited a strong vertical hierarchy of political and economic structures and experienced multiple transitions since 1990. The transition from planned to market economy, from one party politics to democratic elections prompted important changes that affected these capital cities. The FDI inflow strongly influenced their economic development after the transition. While their population is becoming older, large cities also started to shrink for several reasons. The fertility rate is falling below the replacement level and instead of people moving from rural areas to the cities, citizens started migrating in the opposite direction. In addition, the urban poor are not able to maintain expensive city housing. The first chapter gives an overview of the four countries’ governance systems and economic development levels. The following sections introduce the four capital cities. Each section follows the same structure, the introduction and history section is followed by the demographic data, then the economic power of the city, its position and relations within the public administration system, the public finances of the country, and of the capital, and finally a discussion of land use issues. Data collection was challenging in many cases. Some cities did not disclose laws or budget information, or only partially disclosed. Some provided all data but merged with abundant non-relevant information and in a format, that makes it impossible to research

Hungary: An Unfinished Decentralization?

This paper is part of the IMFG Papers on Municipal Finance and Governance series. For a full list of papers, please visit http://bit.ly/2ylAa2D.After 1990, Hungary took steps toward decentralizing public administration and decision-making power. Administrative decentralization, however, was not matched by the same level of fiscal decentralization, creating tension and disparities among Hungarian municipalities. The revenue-raising ability of local governments in Hungary—especially after the economic downturn in 2008—is very low. The debt service of municipalities is also considerably higher than before 2008, a situation that can be explained in part by the change in the value of Hungarian forint relative to the Euro and the Swiss franc, the currencies in which half of Hungarian local debt is denominated. This situation is sharpened by unhealthy municipal financing practices, such as financing operating expenses from investment revenues or from loans. The indebtedness of the municipal sector increased 12.6 times from 2001 to 2007, and in 2007 about 83 percent of municipal borrowing was not backed by immobile assets or any revenue stream. This paper examines the system of municipal finance in Hungary with special attention to the current changes in the regulation and finance of Hungarian municipalities and the change in central control over municipal finances in general after 2008 (in part precipitated by the failure of borrowing rules created during the transitional period to prevent the current crisis in municipal finance), and suggests possible reforms to solve the financing problems of Hungarian municipalities.Institute on Municipal Finance and Governanc

Strategic Planning in Hungarian Municipalities

The paper gives a summary of the most recent literature on strategic planning in local governments, while placing the fi ndings in a historical context. It focuses on planning in postsocialist countries, the impact of the heritage of<br />decades of central planning and the relationship between decentralization and planning. The study concludes that while strategic planning improves the performance of local governments, special aspects, such as the fi nancial dependency of municipalities, focus on daily operation and on short-term results and enhanced need of institutional and personal capacity management must be taken care of while implementing strategic planning in local governments