Discussion Papers 1990. No. 9. 
New Basis for Regional and Urban Policies in East-Central Europe
CENTRE FOR REGIONAL STUDIES 
OF HUNGARIAN ACADEMY Or SCIENCES 
DISCUSSION PAPERS 
No. 9 
New Basis for Regional and Urban 
Policies in East-Central Europe 
by 
ENYEDI, Gyorgy 
Series editor: HRUBI, Laszlo 
Pecs 
1990 




Discussion Papers 1990. No. 9. 
New Basis for Regional and Urban Policies in East-Central Europe 
CONTENTS 
Introduction 
p. 1 
Characteristics of Regional Policies 
p. 2 
Phases of Postwar Regional Policies in East-Central Europe 
p. 4 
New Trends in Urban and Regional Development and Policies 
p. 10 
Conclusions 
p. 14 
Notes 
p. 22 
Bibliography 
P. 24 




Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe. 
Pécs: Centre for Regional Studies, 1990. 27. p. 
Discussion Papers, No. 9.
.INTRODUCTION 
Regional and urban policies have hitherto played a subordinated role in East-
Central European development. Regional planning was integrated within a strongly 
centralized planning system. Regional development targets, e.g. industrial 
deconcentration, were formulated according to sectorial interests rather than local 
(regional) interests or desires. In the strongly centralized political power system there 
was no room for regionalism or local initiatives. Official ideology declared the 
homogenization of society; thus, the homogenization of needs for housing and urban 
services. Consequently, urban planning has applied national standards everywhere. 
The omnipotent party state assumed the responsibility for all aspects of urban 
development. 
East-Central European countries had adopted the Soviet model of urban and 
regional development by the late-1940's. In this paper I intend to summarize the 40-
year history of urban and regional development. It could be stated that the repeated 
efforts to reform the Stalinist economic model did not really touch the spheres of 
regional planning. The governing Marxist parties expected to modify the mechanism 
of economic management without changing the political model. Reforms in regional 
development would have made it necessary to accept the influence of local 
government which did not fit into the policy of centralism. 
Centralized development policies were supported by the nature of economic 
processes. Industrial take-off needed concentrated investment efforts, especially in 
the given industrial structure. (Postwar industrial take-off started with energetics and 
heavy industry.) In this simple structure central planning directives were more 
convenient to apply than in a more sophisticated industry. Planning authorities were 
able to define their targets in natural units, i.e. in tons of output; thus, the lack of 
market and a real price system were not very disturbing. In the early-1950's the 
technics of a war economy were used in managing East-European economy. 1  Heavy 
investments plus abundant Soviet raw material shipments contributed to a rapid 
industrial growth at that time. However, the resources for this type of development 
were soon exhausted. Since the 1960's East-Central European countries have 
formulated two types of responses for developing more complex, more modern 
economies. One group of these countries (GDR, Czechoslovalda, Albania, Rumania, 
Bulgaria) decided to improve the central planning system by introducing new 
planning methods, new sectorial organization, etc. Another group (Hungary, Poland, 
Yugoslavia) decided to introduce substantial reforms in economic management. 
(Czechoslovakia was among the pioneers of economic reforms until the 1968 Soviet, 
intervention.) 2  
By the end of 1989 rapid political changes radically transformed the political 
scene. Currently, remains in only two East-Central European countries the one-party 


Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe. 
Pécs: Centre for Regional Studies, 1990. 27. p. 
Discussion Papers, No. 9.
Communist system: Albania and Yugoslavia. But I assume the diverging experiences 
of the last two decades will strongly influence further political and economi ∎  
development in the whole region. 
The introduction of market elements into the state socialist system  without 
changes in the key elements of the Stalinist political model has met with failure. The 
state socialist system is in crisis. In the "reform countries" there is an almost general 
consensus — also held by the Communist parties — for replacing the Stalinist political 
model with a new one. The decades of economic reforms despite all the failures were 
useful as a learning period during which knowledge was gained about 
entrepreneurship and successful methods to form interest groups. Thus, the 
populations of Poland, Hungary, Czechoslovakia and Yugoslavia are ready for change 
and perhaps they can handle a peaceful transition into a new social model . 3  
The comprehensive changes that have just started in the East-Central 
European societies have impacted upon their regional and urban development and 
settlement policies. In this paper I intend, first, to characterize the principles of 
regional/urban policies of the Stalinist model, second, to analyze the applications and 
changes of these policies during the last 30 years, third, to discuss the impact of recent 
political and economic reforms upon the processes of regional and urban 
development. 
CHARACTERISTICS OF REGIONAL POLICIES 
Regional policies in both market and centrally planned economies have many 
similar goals. Generally, regional policies aim  to level out disparities.  The scale of 
these disparities differs from country to country. In most cases income disparities, 
uneven access to public services (mostly to health care and education) and disparities 
in the economic activity are the most sensitive inequalities. In market economies these 
disparities are due to the imbalance among resources and market accessibility of 
particular regions. In state socialism bureaucratic redistribution of national wealth (in 
favour of politically strong sectors) creates new types of disparities. 
In market economies regional policies were focused on backward areas or on 
handicapped social groups of backward areas. Governments used budget 
redistribution techniques in favour of these areas in order to' improve the business 
climate of these areas by direct investments in the infrastructure and by financial 
incentives for private and corporate investments. Since the mid-1970's government-led 
regional policies have diminished as welfare state concepts and practices have been 
eroded in Western industrial societies. The economic crisis of the 1970's strengthened 
regional solidarity, facilitating the emergence of local, bottom-up regional 
development schemes and policies. 
Three special features of regional policy and planning are evident. 


Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe. 
Pécs: Centre for Regional Studies, 1990. 27. p. 
Discussion Papers, No. 9.
(1) Regional plans extend to all aspects of socio-economic life from production 
to public services. For a long time production goals were the top priority because it 
was assumed that industrial growth would automatically lead to the improvement of 
living conditions. Because the bulk of the economy was nationalized (some 40 years 
ago), governments can intervene directly into the economic sphere. Collective 
ownership is dominant in the service sector, too; thus, public services also include 
retail trade, catering or leisure time activities. 
Central planning has a sectorial character. Consequently, location of industrial 
investments or infrastructural development is decided by sectorial ministries 
according to sectorial interests. Regional planning authorities have but limited power 
for influencing the geography of sectorial decisions. Regional and urban development 
has, to a large extent, been a haphazard outcome of territorial coincidence of sectorial 
decisions. Sectorial interests preferred developed areas where local resources were 
more abundant and the infrastructure had a good standard. Regional policies based 
on sectorial decisions were insufficient to achieve their egalitarian goals. What is 
more, sometimes they contributed to the deepening of disparities. 
(2) Regional plans encompass all regions of a socialist country and provide a 
framework for regional distribution of national (comprehensive) planning targets and 
development funds. All types of economic and tertiary development had to be 
controlled by central authorities. Large cities and prosperous regions are also 
financed from central budget. They have acquired a much more advantageous 
position than less developed areas in receiving government subsidies. Contrasted with 
poor rural provinces their already existing industry has attracted further investments 
from industrial ministries. They have had closer contacts with political power centres. 
Communist governments supposed to fmd the basis of their power in large cities and 
in industrial regions dominated by large state enterprises. 4  Again, despite their 
declared egalitarian goals government regional policies have continuously neglected 
less developed rural areas. 
(3) Regional development — in most socialist countries — is centrally designed. 
Central decisions are channelled to local levels through government agencies and 
public administration. Local initiatives, therefore, have a rather limited impact upon 
plans. In the "classical" Stalinist model the use of central budget subsidies was 
prescribed as the sum to be spent for the maintenance of government housing units in 
a certain county or district and the number of new government housing units to be 
built. How did central planning authorities define the needs of the population in a 
given region? Evidently, they lacked the means to assess local needs or interests. 
Consequently, planners used national norms and standards for regional infrastructural 
developments. These norms, e.g. shop floor space for 100,000 inhabitants, apartment 
size for a family etc., were calculated arbitrarily without local input. Furthermore, the 
availability of funds has had greater impact upon these calculations than the needs of 
the population. This approach was ideologically supported by egalitarianism and by 
the hypothesis that socialist society is becoming more and more homogeneous. 


Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe. 
Pécs: Centre for Regional Studies, 1990. 27. p. 
Discussion Papers, No. 9.
A strong bargaining process exists behind the formal redistribution of the 
central budget. In this bargaining process local authorities try to express their 
interests (which do not necessarily coincide with the interests of the local population). 
While local governments have no power they do have political influence and try to 
find supporters among highly ranked party officials. Here again, urban-industrial 
regions have an advantage. Capital cities (the  only  political power centres) and 
regions of mining and heavy industry have continuously been able to enjoy an 
advantageous position in the budget redistribution. 
Paradoxically, government-led regional and urban policies have had 
differentiating effects in state socialism. Backward areas or settlements have improved 
their position by the hidden market mechanisms of the second economy in areas of 
family income, housing and services. 
PHASES OF POSTWAR REGIONAL POLICIES IN EAST-CENTRAL EUROPE 
Different stages of postwar economic development have been characterized by 
distinct regional and urban policies.  Phase I  was the urban explosion pushed 
unilaterally by industrial take-off. It resulted — in most countries — in a regionally 
polarized development.  Phase II has been characterized by deconcentrated industrial 
location, first attempts at economic reforms and the formation of a modern urban 
network.  Phase III means — at least in the more developed northern part of East-
Central Europe — the beginning of a post-industrial era marked by attempts in 
regional equalization of living conditions, steps toward a "unified settlement system" 
(i.e. rural/urban continuum) and introduction of new concepts in urban and regional 
strategies. 
Phase I  was characterized by a rapid industrial take-off combined with the 
reparation of damages caused by World War II in the whole region. Czechoslovakia 
(more precisely the Czech and Moravian regions) and what is now the GDR were 
industrialized countries before the war. Their postwar industrial expansion meant 
mostly structural changes in favour of heavy industry. Poland and Hungary had a large 
rural sector as well as a few important, rather isolated centres. Their industries were 
weak and unevenly developed. Finally, in the Balkan countries where 50 years ago 
agriculture was the main trade and 80 percent of the population lived in rural areas, 
the postwar ("socialist") industrialization was actually an industrial revolution. In most 
of the East-Central European region economic modernization was intertwined by the 
introduction of state socialism system which resulted in a lot of misunderstandings for 
superficial students of the area. In the official propaganda all the advances of 
modernization — from rural electrification to the expansion of education — are treated 
as achievements of socialism. Western viewers are often puzzled by common features 
of the Western and Eastern European modernization and speak about the 
convergency of the two systems. I shall discuss it later. 


Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe. 
Pécs: Centre for Regional Studies, 1990. 27. p. 
Discussion Papers, No. 9.
This industrial take-off differed from the earlier West-European (or from the 
more or less parallel South-European) one in many respects. Immediately after the 
communist take-over the non-agricultural sector of the economy passed almost 
completely into state ownership. Then, at the same time, comprehensive planning was 
introduced. East-Central European leadership adopted the Soviet economic model 
totally including the priority of heavy industry and a strongly centralized economic 
management system. Central planning authorities laid down detailed directives to 
enterprises. During the 1950's and 1960's industrial growth was exceptionally fast. 
Low consumption, diverted agricultural profit, the over-utilization of the already 
existing infrastructure have been the sources for industrial investments. In Bulgaria 
and Rumania rapid growth continued even during the 1970's. 
Another important change was the introduction of the Soviet (Council) system 
into the public administration that replaced earlier local authorities. Self-governments 
as well as voluntary organizations of citizens were practically abolished, although 
elected local and regional councils were merely empowered to convey central 
government will to the local level. Party organizations are parallely organized. The 
party can control directly the Soviets. In Rumania (and in the USSR) local and 
regional party and administrative units are headed by the same persons. Yugoslavia is 
an exception where the communities are self-governing units but — according to some 
experts — government dirigism exists in many informal ways. In this strongly 
centralized planning and political system there was no room for regional planning. As 
the countries of the region inherited important territorial inequalities from the pre-
war period, first national plans formulated some regional targets but there was neither 
an organization nor a decision-making apparatus for regional development. Low-level 
industrialization was of the reasons for uneven territorial development: the existing 
industry was concentrated on the mining areas and on a few selected cities. In the 
case of Hungary manufacturing industry was excessively concentrated in the capital 
city, Bu Ipest. This single city employed 60 percent of the total industrial workforce 
in 1930. Other inequalities originated from the substantial border changes after both 
World Wars, e.g. Yugoslavia was created in 1920 from extremely different pieces of 
lands. Slovakia lagged far behind the industrialized Czech lands. After World War II 
Poland lost large areas in the East and gained huge, earlier German lands in the 
West. New states intended to integrate their territory economically and to interrelate 
their cities into an urban network. This way, the political power initiated industrial 
location in backward areas and speeded up the completion of national infrastructural 
networks. 
During this industrial take-off industrialized areas — and the urban network of 
these areas — expanded. This urban growth was led by industrialization: expanding 
industrial centres added new residential quarters to existing housing developments. In 
a few cases entirely new towns were created following the Soviet example. New towns 
created a possibility for experimenting with "socialist urbanism". Contrary to the 
Soviet Union where new towns were built on virgin lands making their industrial 
development necessary, these East-Central European cities served largely ideological 


Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe. 
Pécs: Centre for Regional Studies, 1990. 27. p. 
Discussion Papers, No. 9.
purposes. Nowa Huta (in Poland) founded in 1950 together with a steel complex, was 
incorporated into the nearby city of Cracow thereby introducing the working class 
into this intellectual and trade centre. In Hungary all the new towns but Dunatijvaros 
were built as "twin cities" of an earlier urban centre. 
At the same time, the first wave of postwar industrialization further sharpened 
differences between industrialized and rural regions. Heavy industry had a 
concentrated locational tendency, hence, most of the rural areas remained untouched 
by industrialization. Manpower migrated from the overpopulated rural areas to the 
larger cities and to the freshly industrialized zones. This was normal: industrial take-
off has always been regionally polarizing. The polarization was strengthened by the 
fact that industrialization was carried out by large state-owned enterprises, and there 
was no possibility for small private business to participate in this process. 
Rapid growth in GNP did not result in a remarkable improvement in the 
standard of living. Massive oppressive measures were taken against rural population 
for diverting profits from farming to industrialization. (At the same time, rural 
population made up the majority of the region's population.) Industrial investments 
had a low return while the growth of GNP was absorbed by government subsidies for 
inefficient state industry and by armament expenditures. There was no opportunity to 
implement the usual regional planning targets of welfare character by regional 
levelling. 
Phase II started in the late 1950's, early 1960's. Basic industrialization was over. 
Rapid industrialization continued in the Balkans, but even there, industry became 
more diversified with a growing importance of machinery and consumer goods. These 
industrial sectors had a more elastic locational pattern than heavy industry. At the 
beginning of this period when (with the exception of Poland and Yugoslavia) the 
collectivization of agriculture was completed collective ownership of the means of 
production became dominant. The collectivization attracted more investments — and 
more political attention — to the rural areas. Governments intended to clipanel rural 
outmigration to smaller local and regional centres, as earlier larger urban centres —
partly because of the neglect of infrastructure — became overpopulated. In sum, there 
was a possibility and a need for geographically decentralized regional development. 
By the late 1950's the first comprehensive regional and urban strategies were 
formulated in East-Central Europe. These strategies were interesting mixtures of 
Marxist dogmas and Western European planned urbanism. Policy makers still 
supposed that economic growth would automatically result in the improvement of 
living conditions; hence, industrial decentralization has been the key element of 
regional development strategies. On the other hand, a number of elements of Western 
European (mostly French) regional planning ideas were incorporated into regional 
policies. For instance, new regional centres were designated as "counterpoles" 
obtaining priority in industrial location and urban development. In Hungary five 
regional centres had to counterbalance the overwhelming economic role of Budapest. 
In  this  way Boudeville's  well-known growth pole theory was applied but its results 
were as doubtful as in many other countries. Growth centres have frequently 


Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe. 
Pécs: Centre for Regional Studies, 1990. 27. p. 
Discussion Papers, No. 9.
developed at the expense of their regions sharpening small-scale regional imbalances. 
"Centralized decentralization" was the slogan: government intended to create strong 
economic centres in less developed regions first. Growth was stimulated mostly by 
direct government investments in local industry since infrastructure usually was 
neglected. (Industrial investment portfolios usually contained some additional housing 
and public investments, too.) 
Modern industry was located in a number of provincial cities (actually in more 
cities than it was planned originally), and, at that time, industry was the major element 
in urban development. Industrial decentralization contributed to the formation of a 
modern urban system, helped to level out employment among different regions and 
diminished interregional migration. This decentralization meant the new geography of 
economic activity by no means the deconcentration of power. Although a number of 
changes were introduced in the 1960's, many elements — and the principles! — of 
rigidly centralized planning survived. Due to central locational decisions the 
provincial cities  received  certain new investments from state budget but local 
(regional) authorities had neither the opportunity for nor the interest in the most 
efficient utilization of local resources or in the coordination of different sectorial 
decisions. 
By the end of 1960's the extensive industrialization was getting close to its end 
in the more developed "Northern" countries (GDR, Czechoslovakia, Hungary and 
Poland). Low capital efficiency, the outmoded industrial structure, chronic shortages, 
technological backwardness and the deteriorating infrastructure seriously disturbed 
the postwar modernization process. These problems were less explicit in Bulgaria and 
Rumania where industrial take-off was still going on, based largely on the abundant 
Manpower resources which left agriculture. The hope of "catching up with the West" 
(a millennium-old ambition in East-Central Europe) faded away. The need for 
substantial transformation of economic management system was urged by experts, and 
it was more or less accepted by ruling Communist parties, too. Different forms of 
economic reforms were introduced in these countries which diminished the role of 
central planning directives. The Czechoslovakian and Hungarian reforms were the 
more substantial. As it was well-known, the Czechoslovakian reform was short-lived as 
a consequence of the Warsaw Pact invasion of the country in 1968. 
None of these reforms dared to touch the power structure of the party state. 
They contained certain decentralization measures in regional development but it 
meant simply a new distribution of decisions and responsibilities within the 
governmental structure. Basic administrative units, mostly in Poland and Hungary, got 
more freedom in using government funds and subsidies than in earlier days. In 1971, 
the Hungarian Parliament passed a new Law on Councils which — quite differently 
from the Soviet legislation — declared that local councils are the "organizations of self-
government" and the expression of "local interests". In principle, the acceptance of the 
existence of local interests by a centralized Communist government had great 
importance, but in practice, the centralization in regional development did not 


Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe. 
Pécs: Centre for Regional Studies, 1990. 27. p. 
Discussion Papers, No. 9.
change. "Self-government" is not acceptable by a strongly centralized totalitarian 
regime. 
In the 1970's economic growth continued. More and more industry moved into 
the rural areas in search of cheap manpower. As a consequence of industrial 
decentralization a sizeable urban network developed, even in the Balkans. The 
tensions caused by rural/urban dichotomy became more relevant. Economic levelling 
in employment and industrialization was not followed by equalization in living 
conditions. Industrialization was not accompanied by the improvement of housing 
conditions and services. Infrastructural investments have been continuously 
postponed. In the 1970's urban and regional strategies were reformulated. Using 
different wordings, these strategies aimed at the establishment of an economically  and 
socially balanced settlement network. In 1971 a Government Resolution on Regional 
Planning defined two basic aims for regional policy and planning in Hungary: 
"1. It should ensure the efficient use of the resources of different regions and 
the modernization and rationalization of the settlement network. 
2. By levelling out employment and economy of the different regions, by 
equalizing the service and infrastructural supply of different groups of 
settlements it should reduce the differences in the standard of living and in 
the cultural level of the population of different regions." 5  
The 1974 Rumanian Law on "Systematization of the territory and the urban 
and rural localities" declared: "Through systematization the development of the towns 
and the communes...within the framework of a general national programme will be 
assured having in view the entire network of urban and rural localities, their mutual 
influence, the correlation and the development of the towns and villages with their 
surrounding zone and the extension of the cooperation between localities. Special 
attention will be devoted to the rural localities with the aim to gradual increase the 
level of living in these localities bringing it closer to that of urban areas." 
In Poland the Sixth Party Congress (1971) defined the goals of spatial 
development. A National Development Plan was worked out and adopted in 1974 on 
this basis. Its principles were as follows: 
- a more rapid improvement of living conditions and greater satisfaction in the 
variety of social and cultural needs, 
the optimal use of economic resources, 
a more rapid socialist integration, especially with the neighbouring 
countries, 
increase in national defense, 
protection of natural resources and more effective economy in their use. 
All these schemes have common features. They all intend to develop an 
integrated settlement system with a proportionally developed urban network and with 
a rural/urban continuum. By defining a hierarchy of service centres, planners — often 
unintentionally — followed  Christaller's central place theory. All these schemes insist 
on a "top down" modernization: planners intend to designate the central places of 


Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe. 
Pécs: Centre for Regional Studies, 1990. 27. p. 
Discussion Papers, No. 9.
different hierarchical level, the variety of public services and their attraction zones, 
etc. Citizens will be made happy by the paternalistic party state. 
The second half of the 1970's, as everywhere in the world, was characterized by 
a remarkable economic slowing down, even by a stagnation in the industrial sector. 
Socialist economies were not able to adapt themselves to the substantial structural 
changes which were going on in the world economy. Many of these countries even 
refused to accept the idea of adaptation. Nevertheless, they had to experience the 
deterioration of their economic situation. This influenced the implementation of their 
regional and urban development strategies. Since state industry was able to seize a 
growing share from the national budget, infrastructural development and public 
services were the main losers. The 1970's were characterized by strong centralization 
processes in rural public services. A large part of rural communes were judged "non-
viable" by planners, and their depopulation was backed by the authorities. A new 
ideology was born: we had to realize the rural/urban continuum in an efficient way. 
We should not disperse our scarce resources among small villages. We should 
concentrate them in local centres which would offer a variety of services for rural 
people. In Rumania the explanation was rather ideological: the homogenization of the 
socialist society, the total abolishment of private farming, the adaptation of the rural 
settlement network to the geographical pattern of socialist agro-industrial combines, 
etc. In Hungary and Poland, rather, the British "key village" system or the West-
German and Scandinavian rural administrative reforms were quoted. This time "the 
developed Western" model had to be followed. In the East-Central European state of 
communication system these concentrated service models are disadvantageous for 
rural populations and stimulate resettlement to larger centres. 
By the end of the 1970's when Phase II ended, many things ended in East-
Central Europe. There was an end of rapid growth, of industrial expansion, of the 
stimulus of CMEA cooperation that was earlier based on cheap Soviet raw material 
shipments. It was an historical misfortune that East-Central European countries 
entered into the post-industrial era in the time of crisis of the world economy. The 
credit crisis, the structural crisis — which seriously hit even the most developed market 
economies — was combined by a systemic crisis. The recognition and the political 
acceptance of the systemic crisis were difficult and were not general in the socialist 
countries. 
Phase III 
the 1980's — has been characterized by important changes along 
— 
with the development of a great variety of crisis management techniques both in 
economic and regional policies. It is of great importance that new socio-political 
structures of urban and regional development are emerging. 


Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe. 
Pécs: Centre for Regional Studies, 1990. 27. p. 
Discussion Papers, No. 9.
NEW TRENDS IN URBAN AND REGIONAL DEVELOPMENT AND 
POLICIES 
The transition from industrialization to post-industrial society has had an 
historical significance in the developed Western countries, too. The well-known 
characteristics of post-industrial societies — technological and structural changes in 
industry, important declines in agricultural and industrial employment, the expansion 
of tertiary and intellectual occupations, the transformation of the social structure, 
strong global economic interdependence, etc. — marked the birth of such new social 
processes that promoted new trends even created new models in urban and regional 
development. 
This transition has been painful in socialist countries. Post-industrial 
development was pushed by a booming period and a new technological revolution in 
Western Europe. These conditions were missing in East-Central Europe. Old and 
stable dogmas on the priority of production, on the ruling role of the working class 
and the like had to be forgotten. These governments were unable — and unwilling — to 
transform the organization and the technology of their economies, or, in the best case, 
they tried to modernize the economy keeping the old socio-political structure alive. 
There are different answers for the crisis: 
- to deny its existence and tighten the control and discipline within the 
Stalinist model (GDR, Rumania), 
- to modify the model by modest reforms (Bulgaria, Czechoslovakia), or, 
- to look for a new paradigm  via  systematic changes (Hungary, Poland). 
Regional policies evidently reflect all these approaches. For instance, Rumania 
continues its settlement systematization program which was designated in the early 
1970's. But there is no stopping. Elements of post-industrial development, e.g. the 
diminishment and social disintegration of the working class are present and despite 
the constraints, advancing. New types of spatial processes are developing and even the 
authoritarian government cannot forbid them. Regional inequalities started to grow 
again as governments were unable to subsidize backward areas. In most of the 
socialist countries foreign debts and state industry subsidies forced governments to 
withdraw from urban and regional development, e.g. from government housing, but 
earlier central redistribution technics had not been replaced by new ones. 
There are two fundamental changes in regional development and policies.  First, 
the role of industry has changed remarkably. As the industrial take-off practically 
ended regional development had to be stimulated by other sectors. Tertiary sectors 
usually follow the already existing markets, i.e. they tend to be concentrated in larger 
cities. It was much easier to relocate industry than office activities to backward areas. 
The expanding R + D sector also has a concentrated locational behaviour. There is a 
lot of potential for the development of tourist industry in less advanced areas 
provided that the infrastructure will be remarkably improved. Industrial restructuring 
produces depression areas (an unknown phenomenon during the period of 
10 

Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe. 
Pécs: Centre for Regional Studies, 1990. 27. p. 
Discussion Papers, No. 9.
means for industrial take-off and rapid modernization, and, finally, it was able to 
propel the region into the industrialization period within a few decades. (It was 
gained at a high social cost but the market version of rapid modernization in Spain, 
Greece or Taiwan had its social costs, too.) During this period the newly generated 
forms of urban and regional developments were similar in market-led and in the 
centrally planned semi-peripheries. The Stalinist model, however, was depleted and 
inadequate when the historical sequence needed a transition from industrial to post-
industrial era. Hence, the parallel of economic and the systemic crises in East-Central 
Europe. 
(1) After analyzing the principles and theoretical background of the socialist 
regional and urban policies, I have the following statement: these policies had no 
comprehensive theoretical background and they were based on false assumptions. 
These false assumptions were 
(a) socialism is a post-capitalist era characterized by the equity of 
abundance, 7  
(b) socialist society is becoming more and more homogeneous (in reality , 
with the advancement of modernization, the stratification of East-Central 
European societies is becoming more and more diversified). 
Urban and regional policies have eclectic ideological sources. These are 
(a) classical Marxist theories, 
(b) utopian urbanistic theories, 
(c) political and planning (technocratic) pragmatism. 
The latter had the real power often in theoretized form. 
Marx  and  Engels  did not develop a comprehensive theory of regional 
development and urbanization. This has been done relatively recently by Western 
European and Northern-American neo-Marxists. They analyzed social inequalities in 
regional development and within the cities of developed capitalist countries using 
Marx's reproduction and class struggle theories. Metropolitan segregation in capitalist 
countries is a quite visible and evident outcome of social inequalities caused by 
market forces and profit-led economies. This explanation, however, did not help to 
describe the mechanism of regional and urban inequalities under state socialism (it 
was first done by Ivan Szelenyi). 
Marxist urban policy is egalitarian at three levels. Within the settlements, this 
policy is intended to create non-segregated residential areas with identical 
infrastructural supply in every neighbourhood unit. Within the settlement network, the 
abolishment of the rural/urban dichotomy is the main egalitarian goal. At regional 
level, different settlement types of different regions should reach equal living 
standards. 
Egalitarianism was not a Marxist invention. In Europe social inequalities have 
been decried on moral bases in all of the historical periods by religious beliefs, by 
utopian visions or by political ideologies. Socialist urban theories borrowed their 
egalitarian view from utopian avant-garde urbanism of the late 19th century. Even in 
15 

Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe. 
Pécs: Centre for Regional Studies, 1990. 27. p. 
Discussion Papers, No. 9.
modern times egalitarianism has been very strong in the Balkans (where even in 1950, 
80 percent of the total population lived in villages). These countries became 
independent after 500 years of Turkish occupation in the 19th century only. The 
overwhelming majority of the population lived on family farms. There were no large 
landed estates, there were no landless rural poor. Early-20th century avant-garde 
urbanists — from  Ebenezer Howard  through  Gropius  to Le Corbusier —  supposed that 
urban social problems could be answered by physical planning. In the 1920's these 
Western utopian urbanists participated in the formulation of the first Soviet 
urbanization theories. This view was repeated later in East-Central Europe when the 
new towns (so-called "socialist towns") with their standardized housing and services 
were intended to create homogeneous, socialist local society. 
It is worthwhile to discuss in some detail how pragmatism was mixed into these 
theories. 
(a)  One of the outcomes of the utopian-pragmatist mix  is the idea that regional 
and urban plans suppose a continuous development, formulating an ideal 
development with minor conflicts which will be solved easily during the development. 
But the ideal model has rather modest criteria, e.g. a home telephone is not listed 
among basic services. (Evidently, the "ideal" model expressed the ideas of the political 
powers and the planners and not those of the population.) 
Certainly, we have not yet  reached this ideal stage; after all, the building of the 
developed socialism has not yet finished. There are a few frequently cited 
explanations for the difference between the ideal and real models: 
- We have had important successes but we have not yet been able to overcome 
the heritage of the capitalist past. 
This heritage was poor. Indeed, most of East-Central Europe consisted of 
poor rural areas. If we compare the present stage of urban and regional 
development to that of 50 years ago the progress is quite remarkable. (The 
record is more modest if we compare East-Central European urbanization 
to the Southern European one.) This view denies the existence of new types 
of conflicts and backwardness which resulted from the socialist 
development. Hence, the reluctance to discuss openly such phenomena as 
serious environmental deterioration or drug abuse which were not inherited 
from the dark past. 
Our plans are good but there are imperfections in implementation.  This is a 
usual tactic to push the responsibility to the "undisciplined" citizens and the 
"lazy" low-ranked bureaucrats. 
16 

Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe. 
Pécs: Centre for Regional Studies, 1990. 27. p. 
Discussion Papers, No. 9.
- We have to implement our plans in an efficient way.  Everybody has the right 
to a low-rent government apartment but only the large housing complexes 
could be built in an efficient way. (Consequently, housing should be 
concentrated in large urban centres.) "Efficient" became the synonym for 
"big". Efficiency was also achieved through strict central control over local 
investments due to fear that local authorities would use the resources 
inefficiently. "Efficiency" has been the modern, intellectual explanation for 
centralization. 
(b)  Urban and regional policies in East Central Europe are urban biased. In the 
-
redistribution process cities and urban dwellers have had an advantageous position 
(despite the basic slogan of "social equalization between towns and villages"). 
Settlement development policies do not deny that — paraphrasing  Orwell's bon mot 
—all settlements are equal, but cities are more equal than villages. In the GDR, 
agricultural incomes should be lower than non-agricultural ones "according to the 
basic laws of socialism." In Rumania, the law for systematization (1974) intends to 
develop urban centres in rural areas "to propagate the working class evenly within the 
territory of the country." In the Hungarian National Development Concept (1971), 
"basic supply" had different criteria in cities and in rural areas even though the 
definition of basic supply means a set of services which should be available for all of 
the citizens. 
Why are regional policies urban biased (which is contradictory to their 
egalitarian goals)? There is an ideological explanation: cities are the strongholds of 
the working class. Or a more pragmatic one: in our modernization process we should 
develop cities first,  then we could switch our efforts to rural areas. 
The real reasons are as follows: 
- Urban growth became a symbol of the postwar industrial take-off and, 
generally, the modernization process. As most of the larger cities gained 
their importance during the last 40 years, they are the outcome of the 
socialist construction while villages symbolize our (shameful) backward 
rural past. 
- Political centralization favoured large organizations in every sector of socio-
economic life. It was easier for the centre to control the whole society  via  
few large organizations. These large organizations have had their 
headquarters in large urban centres. 
- Large cities have had a strong bargaining position regarding the 
redistribution of the central budget. 
- The political stability of the power depends largely upon the big cities. All 
the open outbursts of the social discontent have been traditionally 
connected to large urban agglomerations. Therefore, social tensions 
generated by housing shortages, lack of services and like should be 
managed first of all in the cities. 
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Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe. 
Pécs: Centre for Regional Studies, 1990. 27. p. 
Discussion Papers, No. 9.

As I mentioned earlier, the rural/urban dichotomy was maintained by 
neglect of the infrastructure, too. Scarce budget resources for 
infrastructural development were channelled towards industrial regions and 
to large schemes, e.g. building of large housing estates which had to be 
located in cities. 
Disadvantages to rural settlements come partly by the traditional suspicion of 
the European communist movements. The majority of the rural population evidently 
did not support the industrialization program of the postwar East-Central European 
communist governments (which was based largely on the diverting profit of 
agriculture), nor the collectivization of agriculture. As the rural population was the 
majority in most countries of the region, the new power destroyed the organizations of 
the rural interest groups, the self-government of the rural communities, the traditional 
cooperatives for making organized resistance by the rural population impossible. 
Rural people became the symbol of backwardness, selfishness, "petty bourgeois" 
behaviour and the remnants of the past. 
The evident discrepancy between the declared goals and their achievements 
has had different scales as well as different types of spatial conflicts and social 
dissatisfactions within the settlement network. Urban dissatisfaction was more visible 
but the rural one was deeper. In Hungary the  partial election of representatives (1989) 
showed that Communist candidates won 25-30 percent of the votes in urban 
constituencies but only 15 percent in rural ones. 
(c)  Regional and urban policies backed the geographical concentration of the 
settlement network.  This was a logical consequence of the urban-biased and 
centralized policy. 
This statement may be discussed. After all, the proportion of the urban 
population to the total one is not high; in fact, it is much lower than in Western 
Europe. Konrad and Szelenyi  have developed a different opinion. They state that state 
socialism broke the urbanization process. Consequently, East-Central Europe became 
under-urbanized. 8  Later  Szelenyi  formulated "under-urbanization" as an important 
characteristic of the socialist urbanization model . 9  They based the "anti-urban" nature 
of state socialism on the relatively low proportion of urban population, on the 
administrative control of urban growth, on the strong "rurality" of the suburban zone 
of urban agglomerations, etc. I assume that the relatively low ratio of urban dwellers 
comes from the  belated  urbanization — the rurality of suburbs is "normal" in an early 
stage of European suburbanization — and urban shortages are caused by the general 
neglect of infrastructure and not by the neglect of cities. The centralization of state 
industrial enterprises and the lack of medium-sized and small businesses also 
contributed to urban concentration. 
The real conflict is that the  concentration  of public services developed much 
faster than the concentration of the population explaining the growing number of 
rural people who remain without basic services. Rural depopulation has been the side 
effect of modern urbanization everywhere but in socialist countries depopulation was 
18 

Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe. 
Pécs: Centre for Regional Studies, 1990. 27. p. 
Discussion Papers, No. 9.
forced by administrative measures, e.g. by interdiction of new construction, by closing 
rural schools without the introduction of school busing.  There were centrally compiled 
lists of villages to be depopulated.  
Collectivization of agriculture liquidated private 
property while the organization of agricultural work to be performed on huge 
collective lands led to commuting within the rural area. Local communities had no 
chance to halt their decline. Their fate was designated in distant planning bureaus and 
political decision-making centres. 
In market economies some settlements begin to decline when their earlier 
functions are no longer relevant. The fate of these settlements is determined by the 
market forces of their local economies, resources and societal needs. In sum, 
settlements threw to decline according to their ability to participate in modern 
urbanization. In state socialism such selection is made by the bureaucratic power. This 
selection is based on technocratic elements (which can partly replace market 
judgement) but it is simply impossible to obtain satisfactory information about the 
viability of all of the settlements in the centres. On the other hand, political viewpoints 
and interventions by party leaders are more powerful than technocratic criteria. 
Citizens suffer  or enjoy  the consequences of regional and urban policies but they are 
unable to participate in their formulation. 
(d) The "efficiency" in the regional and urban policies.  "Efficiency" has justified 
the tendency toward concentration and the central control of regional development at 
least in those socialist countries where economic rationality has been used in the 
argumentation of the policies. It is evident that there are minimum thresholds for 
consumers (users) to run a hospital or to build a sewage system. It has also been 
experienced that big cities have high costs of functioning because of the need of 
special (and expensive) infrastructure, e.g. underground railway. In the 1960's there 
were a number of scholarly publications on the  optimal  (efficient) size of a city. There 
were different opinions but it was generally accepted that 
(a) Great urban agglomerations are very expensive to run and their efficiency 
is poor. 
(b) Medium-sized cities of several hundred thousands of inhabitants are the 
most efficient because the costs of their functioning are not too high; at the 
same time, they have all the advantages of metropolitan agglomerations. At 
that time "the agglomerational advantage," i.e. easy cooperation of industrial, 
fmancial and trade enterprises operating within a single settlement, was 
important. Telematics made this advantage insignificant. 
(c) Modern basic rural services also need a few thousand consumers, thus, a 
new rural supply model should be elaborated. 1°  
These "efficiency studies" became outmoded rapidly but they were kept alive in 
East-Central Europe because they supported the centralization approaches. I don't 
19 

Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe. 
Pécs: Centre for Regional Studies, 1990. 27. p. 
Discussion Papers, No. 9.
support efficiency studies. First, it is impossible to calculate the efficiency of a 
settlement. "Efficiency" meant economic c technical efficiency but a settlement was 
first of all a social organization. Social efficiency could not be expressed in monetary 
terms. Efficiency of a health care system is characterized by the improvement or 
decline of the nation's state of health, rate of mortality and the like and not by 
cost/benefit ratio. In practice nobody knew the efficiency of housing, health care or 
education (actually, because of the arbitrary price system, nobody knew even the 
efficiency of the economic activity). These efficiency studies used an outmoded 
"economy of scale" for judging the efficiency of public services of urban growth. 
"Efficient" became the synonym for "big". This statement expressed the interests of the 
leadership of public administration of public services. Larger organizations meant 
stronger power for their managers and easier access to the political leadership. 
This interpretation of efficiency did not accept that different functions or 
activities need different sizes of organizations. Monolithic state ownership necessarily 
creates large organizations; small units could not support the enormous economic 
bureaucracy. A number of rural services disappeared simply because private 
ownership and local cooperatives (based on voluntary membership) were abolished. 
Grocery stores, repair shops and building industries have disappeared in a large 
number of East-Central European rural settlements because private businesses were 
not allowed or they were economically discriminated. The absolute dominance of 
state ownership contributed largely to the worsening of rural living conditions. 
Summing up the characteristics of socialist regional and urban policies I can 
state that people  were missing from these policies. People appeared as manpower or 
(perhaps) as consumers but not as individuals. The organizations of local societies 
were dissolved. The political socialization has been largely relocated from the 
settlement to the working place.  State-owned enterprises, thus, functioned as a mixture 
of economic and socio-political organizations offering much less opportunity for 
individual activities than settlements would. 
(2) How could I make a balance of the successes and failures of regional and 
urban policy of the last 40 years? How did socialist urbanization diverge from other 
European urbanization trends? What was the role of regional and urban policies in 
shaping the "socialist countryside?" 
Regional and urban development was guided mostly by sectorial planning and 
decisions. Regional and urban policy compared to the economic and social policies 
has been a weak partial policy. It was not supported by powerful lobbies, local 
interests were not accepted by the central power. Urban policy might serve as an 
excuse for certain government decisions but its independent influence was rather 
limited. The transformation of the settlement network and the development trends of 
different regions of a given country have been long-term prdbesses. Governments and 
planners could produce spectacular changes in a sector of a given city or in a few 
places of the settlement network in short time but they could not transform rapidly 
and arbitrarily the settlement network and the regional system of a country. Planners 
20 

Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe. 
Pécs: Centre for Regional Studies, 1990. 27. p. 
Discussion Papers, No. 9.
are not omnipotent. At best, they can introduce wise corrections of the spontaneous 
processes of urban and regional development. 
In my view, modern urbanization and regional transformation are global 
processes. Industrialization promoted a certain type of urbanization everywhere. East-
Central European industrialization produced the same type of urban and regional 
development which had developed in Western Europe earlier. East-Central European 
development was regular and did not deviate from the global model. Following are 
the basic characteristics of the global model: 
- relocation of the population within the settlement network and growth in the 
percentage of the urban population, 
- spatial separation of working places from residences (hence the extension of 
commuting), 
- development of functional and socio-ecological zones within cities, 
- suburbanization, conurbations: spatial integration of settlements, 
- disappearance of monofunctional agricultural regions, 
- formation of an interrelated settlement system with the full hierarchy of 
central places (urban centres) strengthening of the small town network, 
- expansion of tertiary and quaternary sectors in the employment which have 
different locational behaviour than traditional industry. 
Market mechanism and central planning have resulted in similar spatial 
processes. I assume that they represent simply two types of techniques for conveying 
the process of modern urbanization. 11  On the other hand, even in the case of the most 
centralized planning system regional and urban development has been shaped 
through millions of individual decisions, too. "State" urbanization creates but built 
environment, employment but the spontaneous process of urbanization is made by 
such individual decisions as selecting a residence, a workplace, a certain type of 
training, education for children, etc. Individual desires are quite simple and quite 
uniform everywhere in Europe: adequate housing, employment, accessibility of 
services (and perhaps accessibility of friends and family members) and social prestige 
of the residential area. When government rules made this goal-setting officially 
impossible society developed self-defense mechanisms. When the housing market was 
abolished exchange of apartments developed as a hidden market. When state 
enterprises could not offer necessary services a second economy replaced them. If it 
was dangerous to accept money for "black" work an exchange of work developed. 
East-Central European urbanization was similar to urban and regional 
development in other regions of Europe. It was not identical. Both historical 
development (the belated industrial and urban development) and socialist power have 
made their imprints upon it. 
State socialism has been an alternative model for industrialization. It became 
evident that it could not serve as an alternative model for further modernization, for 
post-industrial development. This social model will be exhausted when a stage of 
urban and regional development has also been completed. East-Central Europe will 
enter into a higher stage of development by systemic changes. This double transition 
21 

Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe. 
Pécs: Centre for Regional Studies, 1990. 27. p. 
Discussion Papers, No. 9.
will not be an easy period. We are accustomed in this corner of Europe to pay high 
price for progress. 
NOTES 
1 According to some authors command economy and market economies are 
two different techniques in economic management and they are not social 
system specific. Capitalist countries used command economy during World 
War II and even partly during the reconstruction period. Thus, socialist 
countries can use market techniques in "peaceful" periods. I have doubts 
about this statement. 

 Evidently, this grouping is a simplification. For instance, Bulgaria has 
introduced from time to time spectacular but short-lived economic reforms 
and there were ups and downs of reforms in the second group of countries. 
3  Actually, nobody knows much about the new model. A group of politicians 
insists that the new model, based on a mixed economy, a multiparty system 
and basic democracy of a civic society, will be still socialist. Others suppose 
that one can establish a capitalist (market) system with strong social 
solidarity, a type of the Scandinavian society. Another group intends to 
develop a "third way", a model between the socialist and the capitalist 
societies. Liberal capitalism has also supporters. All the future models are 
sketchy and theoretically poorly established. Social scientists have 
extensively studied the transition from capitalism to socialism but the return 
way has remained unknown. Anyway, East-Central Europe has been a 
distinct historical region of Europe for a millennium and any type of a new 
social model would fit to the long-lasting traditions of the region. 
4  In reality, all the serious uprisings against Communist governments (Berlin: 
1953, Budapest, Poznan: 1956, Gdansk: 1970, Gdansk: 1980, Brasov: 1987, 
Bucharest: 1989) started in large urban-industrial centres. 
5 LACKO, L.: Assessment of Regional Policies and Programs in Eastern 
Europe. In: DEMKO, G. (ed.) 1984. pp. 124-157. 
6  RONNAS, P. (1984). p. 66. 
7  It may be true that in this case the existing socialism does not fit the criteria 
of the socialist society. 
8  KONRAD, Gy. — SZELENYI, I. 1971. 
9  MURRAY, P. — SZELENYI, I. 1984. 
22 

Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe. 
Pécs: Centre for Regional Studies, 1990. 27. p. 
Discussion Papers, No. 9.
10  According to a Swedish supply model, which was elaborated in the 1950's, 
a threshold of 3,000 people was determined to be the minimum number of 
consumers for modern rural basic services. Curiously enough, this number 
of 3,000 persons later appeared as the "minimum size of a socialist 
settlement" in 1964 in the Hungarian settlement development concept and 
in 1974 in the Rumanian settlement systematization law. The Swedish model 
intended to serve by a small city 3,000 farmers in lonely dispersed farm 
settlements in a large area. In East-Central Europe without adequate road 
systems and without individual motorization the 3,000 persons were to leave 
their original homes and be resettled in designated "agro-industrial towns" 
(Rumania) or in "basic supply centres" (Hungary). 
For more detailed explanation see ENYEDI, GY. 1989. 
23 

Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe. 
Pécs: Centre for Regional Studies, 1990. 27. p. 
Discussion Papers, No. 9.
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26 




Discussion Papers 1990. No. 9. 
New Basis for Regional and Urban Policies in East-Central Europe
Papers published in the Discussion Papers series 
No. 1 OROSZ, Eva (1986): Critical Issues in the Development of Hungarian Public 
Health with Special Regard to Spatial Differences 
No. 2 ENYEDI, Gyorgy — ZENTAI, Viola (1986): Environmental Policy in 
Hungary 
No. 3 HAJDO, Zoltan (1987): Administrative Division and Administrative 
Geography in Hungary 
No. 4 SIKOS T., Minas (1987): Investigations of Social Infrastructure in Rural 
Settlements of Borsod County 
No. 5 HORVATH, Gyula (1987): Development of the Regional Management of 
the Economy in East-Central Europe 
No. 6 PALNE KOVACS, Ilona (1988): Chance of Local Independence in Hungary 
No. 7 FARAGO, Laszlo — HRUBI, Laszlo (1988): Development Possibilities of 
Backward Areas in Hungary 
No. 8 SZORENYINE KUKORELLI, Ir6n (1990): Role of the Accessibility in 
Development and Functioning of Settlements