Discussion Papers 2003. No. 41.
The City and its Environment: Competition and/or Co-operation?
(A Hungarian Case Study)

CENTRE FOR REGIONAL STUDIES
OF HUNGARIAN ACADEMY OF SCIENCES

DISCUSSION PAPERS

No. 41
The City and its Environment:
Competition and/or Co-operation?
(A Hungarian Case Study)

by
Viktoria SZIRMAI – András A. GERGELY – Gabriella BARÁTH
– Balázs MOLNÁR – Ákos SZÉPVÖLGYI

Series editor
Zoltán GÁL

Pécs
2003

Discussion Papers 2003. No. 41.
The City and its Environment: Competition and/or Co-operation?
(A Hungarian Case Study)

This paper is a shortened version of the book ‘Competition and/or Co-operation?
Relations between the City and Its Environment’ having been published by the Sociological
Research Institute of HAS and Centre for Regional Studies HAS in 2002.
The research was carried out within the framework of PICS (Programme Internationale
de Coopération Scientifique) with the sponsorship of the Mayor’s Office of Tatabánya,
Által Brook Water Catchment Reconstruction and Development Association, and the
Department of Rural Development Programmes of the Ministry of Agriculture and Rural
Development.

ISSN 0238–2008

2003 by Centre for Regional Studies of the Hungarian Academy of Sciences.
Technical editor: Ilona Csapó.
Typeset by Centre for Regional Studies of HAS Printed in Hungary by Sümegi
Nyomdaipari, Kereskedelmi és Szolgáltató Ltd., Pécs.

Discussion Papers 2003. No. 41.
The City and its Environment: Competition and/or Co-operation?
(A Hungarian Case Study)
CONTENTS
1 Introduction

/ 5
1.1  The problems of competitiveness and success / 5
1.2  Social demands for a new interpretation  / 7
1.3  The social interpretation of competitiveness and success / 10
1.4  The competitiveness of the new cities / 11
2
The objectives and hypothesis of the empirical research  / 13
3
The major social and economic features of the micro regions and cities in our
sample areas / 14
3.1  A short description of Tatabánya and its environment / 14
3.2  A short description of Miskolc and its environment / 19
4
Microregional economic development strategies / 22
5
The different phases of microregional development / 24
5.1  The features of crisis management transformation / 24
5.2  The features of recovery transformation / 27
6  The social interpretation of regional co-operation, competitiveness and
success / 29
References / 32
3

Discussion Papers 2003. No. 41.
The City and its Environment: Competition and/or Co-operation?
(A Hungarian Case Study)
List of figures
Figure 1
Location of the sample areas in Hungary / 14
Figure 2
Location of Tatabánya and its subregion in Komárom-Esztergom
County  / 15
Figure 3
Location of Miskolc and its subregion in Borsod-Abaúj-Zemplén
County  / 19
List of tables
Table 1
The demographical indices of Tatabánya, Tata, Oroszlány and
Komárom-Esztergom County 1980, 2000  / 16
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Szirmai, Viktória - A. Gergely, András - Baráth, Gabriella - Molnár, Balázs - Szépvölgyi, Ákos :
The City and its Environment: Competition and/or Co-operation? (A Hungarian Case Study)
Pécs : Centre for Regional Studies, 2003. 33. p. Discussion Papers, No. 41.
1 Introduction
1.1 The problems of competitiveness and success
During the East Central European changes starting from 1989 there was a sharp
competition among Hungarian settlements as well for winning grants to ease the
outcomes of their economic crisis and to get venture capital support, for the attrac-
tion of external foreign investors, for the chances of integration into international,
local and regional networks and for the chances of their quick economic develop-
ment.
Competition itself was not an unfamiliar phenomenon for Hungarian settle-
ments, as in the period of state socialism they were also in a strong contest for
gaining larger power, more central functions, higher positions in the administrative
hierarchy and for winning more infrastructure development funds (Vági 1982,
Enyedi 1997, Rechnitzer 2002). This competition was intensified by the central
government’s historically changing development funds, by specific power mecha-
nisms, by the changing division of power between central and local governments,
by the rivalry of political and spatial powers, by the public legitimacy of competi-
tion situation and last but not least by the fact that each settlement can win devel-
opment grants only against the others. But today’s competition is differing from the
competitions of the past: its key mechanisms, rules and instruments are different or
partly different, the processes are organised by new principles and competitive ad-
vantages are determined by different factors. Although competition (or rather fight
in several cases) still exists among settlements for certain government resources,
grants, pieces of information for successful tendering and informal lobbying, its
basic conditions have fundamentally changed with the change of the central gov-
ernment’s functions and with the transformation of the state socialist system into a
democratic society. The mechanisms of competition are rather dictated by the rules
of the global market, by the major organisations of global economy and by the ide-
ologies of the management of global multinational firms (Boltanski–Chiapello
1999).
During the first half of the 1990s Hungarian urban and regional policymakers,
development analysts and regional scientists were all seeing the problems of com-
petitiveness exclusively from an economic point of view. They were on the opinion
that an increasing adaptation to market trends, the intensification of innovation, the
increasing number of business organisations, the creation of new jobs, the estab-
lishment of industrial parks, the integration into global economy on the basis of a
fully harmonising economic structure and a relevant institutional and social system
were the key elements of successful development and closing-up.
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Szirmai, Viktória - A. Gergely, András - Baráth, Gabriella - Molnár, Balázs - Szépvölgyi, Ákos :
The City and its Environment: Competition and/or Co-operation? (A Hungarian Case Study)
Pécs : Centre for Regional Studies, 2003. 33. p. Discussion Papers, No. 41.
In this sense certain social – mainly employment factors – are shaped by the
impacts of economic transformation on the relationship of social interests and by
the performance and profit-making motivation of high positioned social actors. The
expectations for the welfare of spatial and social groups, for granting rights for
clean natural environment, for the establishment and an operation of an institu-
tional system of social and political participation, for the establishment of a spatial
social (community) relationship system, for inter-settlement and neighbourhood
co-operation were rarely formulated or if ever, they were used only in legitimacy
context.
Even in the period of state socialism some settlements – industrial or workers’
cities – were using various local social explanations such as emphasizing their (la-
bour class minded) character in the competition for government assistance. These
legitimacy mechanisms were working weaker and in a different way after the
change of regime but a submission of an analysis on the structure of local society
and the anticipation of a city’s or area’s potential economic and social tensions can
still – sometimes informally – have some pushing force on decision-makers to allo-
cate certain state grants – e.g. environmental funds – to these cities just to prevent
local social conflicts.
During the 1960s and 70s West European countries had broad social and pro-
fessional consensus on the issue that the criteria of their cities’, settlements’ vil-
lages’ success and competitiveness should stand on economic and its adjoined so-
cial basis (economic functions with their impacts, the infrastructure improvement
impacts of their core position, the quality of services, international economic rela-
tions, the number of jobs).
This interpretation of success and competition was supported by the structural
system of the capitalist society and by the existing normative systems and ideolo-
gies. According to the ideology of classic capitalism – success, primarily a com-
pany’s success – has not only economic but social benefits as well, through its con-
tribution to public welfare and making people rich (Boltanski–Chiapello 1999).
Marxist critics also supported this idea. This is verified by the fact that socialist
industry and its industrial plants were the ideological symbols of economic and
social success, as they were carrying out their local and local society development
programmes, such as massive flat construction and the improvement of housing
conditions. This created several spatial, social, income and housing disparities such
as large differences between the living conditions of the elite management and
other classes of society.
The second half of the 1970s brought fundamental changes for the capitalist so-
ciety. Economic liberalisation, financial transactions – financial deregulation and
speculation – resulted significant corporate development, economic and capital
concentration and increased the power of multinational firms through the fusion of
large companies, corporate concentrations and the gradual expansion of foreign
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Szirmai, Viktória - A. Gergely, András - Baráth, Gabriella - Molnár, Balázs - Szépvölgyi, Ákos :
The City and its Environment: Competition and/or Co-operation? (A Hungarian Case Study)
Pécs : Centre for Regional Studies, 2003. 33. p. Discussion Papers, No. 41.
capital. Changes in the economy and corporate structure, economic centralisation
had new spatial impacts and created metropolitan regions, global cities and their
affiliated urban networks and network disparities as well.
The decline of welfare states and systems with the adverse social impacts of
global economic recession having been generated by the operation mechanism of
capitalism itself – rising unemployment, decreasing consumer potentials, sharpen-
ing income, educational and spatial disparities, the ecological damages of eco-
nomic prosperity – which were received with growing discontent by the middle
class society manifesting in strikes, urban social and environmentalist movements
(Boltanski–Chiapello 1999, Szirmai 1999a).
1.2 Social demands for a new interpretation
The (primarily or exclusively) economy-focused interpretations of urban develop-
ment and competition between cities and their environment can now be questioned
from several aspects:
1) The development chances and competitiveness of urban networks, cities and
their environment – having been resulted by the globalisation of world economy –
have also been differentiated. Social polarisation and the spatial expansion of social
disparities have been increased between core areas and peripheries and within set-
tlements. Even global cities, the ‘shop-windows of capitalism’, as Boltanski re-
marked (1999), had to face social tensions and the adverse impacts of economy-
focused regional and urban development models. The differences in the living
standards of the elite top-managers, the qualified expertise of multinational firms,
the economic and political decision-makers, the well-educated middle-class fami-
lies and the disadvantaged, the handicapped and unemployed low classes have now
become striking. The news on the deepening of economic recession (for example
the changes in the political power structure of world economy) were received by
middle-class rows and top executives with increasing worries about losing their
job, living places and health (Bellah et al. 1996). The concentration of multina-
tional was another fear factor for the corporate management of companies standing
on lower positions of urban hierarchy.
2) Even in the Hungarian transition process it turned out very soon that the
chances of cities, villages and regions for successful competition are very different.
International and home market mechanisms, investors and multinational firms have
preferences for certain regions, areas and cities in their site selection policies.
These preferences are based on certain regional, geographical, infrastructure crite-
ria, local features and on the combination of the elements of economic and social
structure, labour force structure, local government policies and the international
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Szirmai, Viktória - A. Gergely, András - Baráth, Gabriella - Molnár, Balázs - Szépvölgyi, Ákos :
The City and its Environment: Competition and/or Co-operation? (A Hungarian Case Study)
Pécs : Centre for Regional Studies, 2003. 33. p. Discussion Papers, No. 41.
and Hungarian relationship system of the social elite groups. Historical-social fac-
tors have also great importance because an area’s position within the resource and
power allocation system of state socialism or the proportion of urban middle-
classes and the presence of entrepreneurs with large capital resources may largely
influence an area’s positions in global and market competition.
3) A series of international trend analyses may verify the theory that economy-
focused competition and success policies – with their supporting development
strategies – are generating unsolvable social tensions and conflicts of interests. The
most successful cities – even global cities for example – due to the concentration
and growing interests of global capital resources – are facing extremely deep social
and environmental problems, poverty, segregation and a large concentration of en-
vironmental pollution (Sassen 2000).
4) International researches also verify that the social conflicts of economy-fo-
cused competition and success policies are hurting the dynamism of the economy
itself. Hungarian case studies on regional and economic transformation processes
are showing similar results. The economic transformation of successful cities and
regions, such as Budapest, Győr, Székesfehérvár for example, were followed by so
intensive social tensions and conflicts that now they are hindering the further de-
velopment of urban economy and have no roles in sustaining or enhancing the pre-
sent welfare system.
5) Regional and urban social groups are less ready to approve economy-focused
development strategies. Those social groups that have been excluded from the ad-
vantages of transformation have the strongest opposition to this policy but even
those who can enjoy its benefits are more and more getting aware of the fact that
economy-focused urban and regional development mechanisms are not bringing
success for them in all areas. They cannot avoid the adverse side effects of urban
social life, the damages of environmental pollution for their health, and crime.
Economy-focused urban and regional development strategies are arising social
conflicts through their negligence of the cultural potentials of urban society and
through generating social conflicts in everyday life (Bellah et al. 1996).
6) The spread of post-material values in advanced industrial societies, the in-
creasing expectations for the quality of natural environment, for better health and
leisure time facilities demand a revision of the earlier concepts of urban and re-
gional development. These demands for change and for creating a balance among
economic, social and environmental factors in development plans are actively sup-
ported by the international organisations and movements of civil society and by the
expansion of relevant ideologies, such as the theory of sustainable (urban) devel-
opment.
7) Economy-focused competition policy and its ideology – mostly in the early
1990s – were very harmful for the relationship of Central and East European set-
tlements, for the co-operation of cities with their environment, for the interrelation-
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Szirmai, Viktória - A. Gergely, András - Baráth, Gabriella - Molnár, Balázs - Szépvölgyi, Ákos :
The City and its Environment: Competition and/or Co-operation? (A Hungarian Case Study)
Pécs : Centre for Regional Studies, 2003. 33. p. Discussion Papers, No. 41.
ship of regions and different spatial and social actors. It was blocking interregional
co-operation and was reviving the – mostly hidden – spatial conflicts of state so-
cialism. It also weakened the possibilities of municipal co-operation that had previ-
ously been damaged by the forced top to bottom governmental scheme of state so-
cialism. The legal regulations and the local autonomy initiatives of the Local Gov-
ernment Act of the transition period were also against regional level co-operation.
The internal co-operation of local powers was also full of conflicts, global and na-
tional-level economic competition, the achieved – economic and political – posi-
tions had also some influence on the transformation and features of local and re-
gional power systems.
8) The instruments of urban policy cannot solve the above-mentioned social
processes and conflicts of economy-focused regional development policy. These
problems are also reducing the efficiency of urban policy. The greatest challenge
for Hungarian urban policy is that citizens think local governments should not only
create new job opportunities for them but also should improve their living condi-
tions. However, development resources are very low, partly for the government’s
curtailments, partly for the economic and urban development theories and practice
of the past. During the crisis period of the 1990s the creation of new jobs and the
attraction of foreign capital and multinational firms were the major objectives of
the local governments urban and development policies. To achieve these objectives
they granted significant local tax exemptions1 to economic actors for several years.
The scarcity of financial resources partly resulting from this decision is restricting
the possibilities of qualitative urban development.

1 Hungarian local taxation system grants licenses for local governments to exercise their
taxation rights individually, to establish their local taxation policy. The 1990 C. Act entitles
loval (village, urban, capital, district) municipalities to collect local taxes within their
authority scope area. The Act nominates private persons, legal entities, economic corpora-
tions without legal entity, and private person associations without legal entity as subjects of
taxation (those that can be imposed by local tax duties). The Act enables local governments
with the right of granting tax exemption. The latest date of the validity of local tax exemp-
tions – assuming that Hungary will join the EU in year 2004 – is year 2008. Within five
years following Hungary’s EU accession local governments should terminate local tax ex-
emptions. The abolition of tax exemptions guaranteed for a certain period may be sus-
pended for a five-year period but those guaranteed for an unlimited period will have to be
instantly terminated.
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Szirmai, Viktória - A. Gergely, András - Baráth, Gabriella - Molnár, Balázs - Szépvölgyi, Ákos :
The City and its Environment: Competition and/or Co-operation? (A Hungarian Case Study)
Pécs : Centre for Regional Studies, 2003. 33. p. Discussion Papers, No. 41.
1.3 The social interpretation of competitiveness and success
The adverse social impacts and conflicts arising from the economy-focused com-
petition and success policy demand a more complex social criteria system of com-
petitiveness and success which besides economic criteria is built on social criteria
as well.
In our opinion successful urban and regional development policies and com-
petitiveness, their primary element, can stand on several factors. They are partly
associated with the social aspects of economy and partly with the activities of local
community and civil society.
We are on the opinion that a successful city or region has prosperous economy,
but it should be coupled by a well-operating local and civil society. The social in-
terpretation of success has a complex criteria system, such as economic prosperity,
the state of natural environment, the availability of rights for clean natural envi-
ronment, the provision of good housing and living conditions in compliance with
local social and market situation. The establishment and operation of the institu-
tions of social and political participation, the co-operation of civil society, the
building of spatial, social (community) interrelations, the co-operation among set-
tlements, cities, villages, neighbourhoods, the exploration and management of so-
cial conflicts are all another criteria of the social interpretation of success. To meet
these criteria development policies should take the aspects of both economic and
social development into account. Competition among settlements will cover not
only economic but social areas as well for the welfare of the above-mentioned
groups and for easing spatial and social disparities.
The suggested alternative may really seem to be a normative guideline. How-
ever there are some cases in West European practice when villages or cities are
competing for their citizens’ better local image, stronger local identity (this is not
excluding cosmopolitan relations and traditions), better community relations, for
cutting down the number of the poor and deprived, for finding better solutions for
their integration instead of their exclusion.
For creating an adequate social interpretation of competition and success a so-
cial consensus and a common opinion of the social actors are needed. So far the
interpretations of competition and success were defined primarily by economic and
political actors or by development and planning experts who on the one hand were
aware of the demands of globalisation and its mechanisms, on the other hand their
relevant interventions with economy-focused interpretation based their political
and economic career and through their high social position could remain intact
from the adverse impacts of transformation. The opinion of a broad spectrum of
social groups has been excluded from the definition of the basic criteria of success
and competitiveness. This is partly explained by the incomplete operation of the
civil democratic system, the inefficiency and power dependencies of civil society
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Szirmai, Viktória - A. Gergely, András - Baráth, Gabriella - Molnár, Balázs - Szépvölgyi, Ákos :
The City and its Environment: Competition and/or Co-operation? (A Hungarian Case Study)
Pécs : Centre for Regional Studies, 2003. 33. p. Discussion Papers, No. 41.
and partly by the fact that during the change of regime Central and Eastern Europe
the social elite – including professionals and the media – did not have such ideas,
competition and success policies that had complex economic and social criteria.
Several policies of competition and success can be built on social consensus. In
this paper, on the basis of our empirical urban and regional researches and polling
various social actors on success and competition, we are going to reveal some in-
terrelations between economic and social aspects, urban and regional development
and to introduce a different competition and success policy from the earlier econ-
omy-focused strategies.
1.4 The competitiveness of the new cities 3
In the early 1990s it seemed that the historical past of the new cities would make
their economic transformation progress slower than the traditional ones. The
mechanisms of the redistribution-based urban development model of state social-
ism were stronger in new cities than in other settlements. Within the redistributing
settlement management system the spatial location of population was much under
the control of the central government. Thus, local powers had no or only limited
chances to manage the issues of urban development and policy on their own. The
absence of independent local policy, the missing autonomy of local society organi-
sations and social initiatives further worsened this situation. The dominance of the
state and the dependency of local powers were stronger in the new cities than other
places. During the transition period the declining power of the state at first gave
new hopes to the establishment of the autonomy of local government and an inde-
pendent urban development policy but later on produced quite uncertain results.

3 The term “new cities” is referred in the literature of Hungarian and East Central Euro-
pean urban research to cities having been built by force, through central directives based on
the basis of modern urban doctrines during the 1950s, the period of socialist industrial de-
velopment, without a relevant social and historical background.
Their common features are as follows: the aspects of classical urban development were
neglected during their establishment, they were mostly built at the proximity of small set-
tlements for operating as heavy industrial centres. The planning strategies of new cities
were also the products of the socialist urbanisation model, of centralised redistribution
economy, infrastructure and housing supply. They were the major end results of the eco-
nomic, industrial development objectives and political power interests of state socialism. In
the early 1950s communist powers and party activists decided to launch forced industriali-
sation projects. The disintegration of “bourgeois cities” and the building of large cities for
the rising workers’ class of socialism was a very important objective of that time. New city
programmes had ideological importance as well. The new settlements were designed to
serve as prototypes for the socialist regime, lifestyle and community spirit (Szirmai 1996).
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Szirmai, Viktória - A. Gergely, András - Baráth, Gabriella - Molnár, Balázs - Szépvölgyi, Ákos :
The City and its Environment: Competition and/or Co-operation? (A Hungarian Case Study)
Pécs : Centre for Regional Studies, 2003. 33. p. Discussion Papers, No. 41.
The positions of civil and middle-class society were rather weak in new cities. The
formation of new independent groups and associations also seemed to slow down.
The new cities and their environment faced increasing social differences and heavy
unemployment problems. The complex economic, social, political and ecological
crisis phenomena of state socialism were still strong. Local industrial plants having
key role in these cities’ economy seemed to be unable for restructuring. The dam-
ages of industrial pollution with their serious impacts on natural environment were
also threatening public health.
However, researches on the East and Central European transformation of the
1990s have verified that several new industrial cities were economically prospering
(Hamount–Jakowiecki et al. 1999). The experiences of the new urban development
trends of Central and Eastern Europe prove that "the success of the new cities" had
been resulted from several strategies. Although success does not depend on a single
strategy but one of them based on the state’s increased influence and control over
local economy has proved to be successful. In this case several forms of state as-
sistance were added to the success factors of new cities; the dynamic corporate
management policy of large firms with their professional and innovation oriented
labour force structure being able to reduce the overall crisis of local economy.
Within this model local government and local economy depend very strongly on
the central state’s economic and regional policy oriented decisions.
In another strategy, the assistance of the state is weaker and local autonomy is
stronger but this will increase the dependency of local actors from the market at the
same time. In this case their dependency from the state is weaker but new depend-
encies will arise from several sides. Beyond the still existing forms of state inter-
vention the influences of international capital and globalisation are felt at an in-
creased level.
Both strategies implied some negative impacts as crisis management, the stabi-
lisation of urban economy and the securing of an optimal competition position
were the main objectives of the early 1990s. But – in accordance with the econ-
omy-focused interpretations of competition policy of that time – social aspects of-
fering long-term perspectives were neglected for the sake of short-term success. A
consensus was formed on urban development strategies in these cities too. The so-
cial groups, the elite, the workers (and their families) having got their job opportu-
nities as a result of economic restructuring had to live with this situation for a long
time because they were partly forced to do that by the objective and pressurizing
circumstances, and partly were convinced by the views and dominating rhetoric
speeches of professional experts and the media. However at the end of the 1990s
the demands for social evolutions, the motivations for economic and social success
and for the new criteria of competitiveness were sweeping through the Hungarian
new cities as well.
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Szirmai, Viktória - A. Gergely, András - Baráth, Gabriella - Molnár, Balázs - Szépvölgyi, Ákos :
The City and its Environment: Competition and/or Co-operation? (A Hungarian Case Study)
Pécs : Centre for Regional Studies, 2003. 33. p. Discussion Papers, No. 41.
2 The objectives and hypothesis of the empirical
research
The exploration of the real processes of regional and urban development in indus-
trial cities and their environment in Hungary’s regions of diverse economic devel-
opment was the primary objective of our research. The research was primarily tar-
geted at the exploration of relations between cities and their environment and those
sociological factors, interests and social conflicts that have major role in the estab-
lishment of co-operation. The research was also exploring the attitude of economic
and social actors towards urban development and competition policies.
The empirical research started from the hypothesis that those cities can have
competitive advantages in European integration and urban development that
1) have tackled their complex economic and social crisis problems and have
gone or are going through economic restructuring;
2) have regional advantages and have established strong relations and partner-
ships with their environment in economic, social and environmental issues and as a
result have turned into the economic and social centre of their surrounding neigh-
bourhood (region). They are extending and distributing the positive effects of com-
petition “on the basis of equity and fairness”;
3) have potentials for the assessment, prevention and management of social,
economic, ecological, spatial, microregional and regional conflicts.
Tatabánya and its environment with the cities of Tata and Oroszlány, in Central
Transdanubia, a region with better indicators than the national average, was the
first sample area of our research. Miskolc and its environment in North Hungary, a
region with lower indicators than the national average, was the second sample area
(Figure 1).
Several methods were applied in the empirical research. Besides the analysis of
several national, regional and local newspaper and journal articles we also re-
evaluated the results of earlier researches and microregional public opinion polls
and processed the microregional statistical data of economic, social and structural
changes. We used the time series data of the Central Statistical Office covering a
12-year period between 1989–2000. We prepared structured interviews with the
social, economic, political and civil actors (a total of 70 interviews have been made
in the two sample areas). The results were categorised by research concepts and
research areas.
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Szirmai, Viktória - A. Gergely, András - Baráth, Gabriella - Molnár, Balázs - Szépvölgyi, Ákos :
The City and its Environment: Competition and/or Co-operation? (A Hungarian Case Study)
Pécs : Centre for Regional Studies, 2003. 33. p. Discussion Papers, No. 41.
sion engineering are the most typical economic activities. Intensive industrializa-
tion was on the one hand the source of local socio-economic development (Ta-
tabánya for example was turned into a city through the fusion of its earlier residen-
tial districts in 1947, Oroszlány and Tata were promoted to cities in 1954) but on
the other hand it generated several social conflicts since the 1960s.
The concentration of industrial plants resulted in an intensive immigration and
significant population growth, which lasted until the early 1980s. Although as a
result of a natural fall in population – the county’s population is decreasing (the
growth of urban population is resulted from the promotion of new cities between
1980–2000). But with the change of regime migration turned into an opposite di-
rection: large masses of people were moving out from cities into rural areas, in-
creasing with this rural population and decreasing the number of city dwellers at
the same time (Table 1).
Table 1
The demographical indices of Tatabánya, Tata, Oroszlány and
Komárom-Esztergom County 1980, 2000
Population
Change of
Natural increase
Migration

population
of population
difference

(%)
(heads)
(heads)

1980 2000
2000/1980
1980 2000 1980 2000
Tatabánya 75,900
71,700 94.5  325 –295
60 –300
Tata
24,100
23,400 97.2  120 –70  500 –50
Oroszlány 20,600 20,700 100.1  165
–5
30  120
…

County 319,800
311,700 97.5 1185
–1030 –400 1020
Cities 171,100
191,700
112.0 800
–560 800 –80
Villages 148,700
120,000 80.7  385 –470 –1200 1100
Source: Central Statistical Office, Tatabánya, 2001.
Population changes were accelerated by the economic transformation following
the change of regime. The region’s earlier industrial structure collapsed very
quickly. Mining, metallurgy and other energy-intensive sectors (such as cement
production, building material industry) completely broke down and almost 20
thousand jobs were terminated bringing heavy unemployment problems for Ta-
tabánya and its environment. (Through the socialist “full employment” system was
also a kind of hidden unemployment behind the walls). The aluminium factory was
shut down in Tatabánya (its outdated equipment and high energy consumption
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Szirmai, Viktória - A. Gergely, András - Baráth, Gabriella - Molnár, Balázs - Szépvölgyi, Ákos :
The City and its Environment: Competition and/or Co-operation? (A Hungarian Case Study)
Pécs : Centre for Regional Studies, 2003. 33. p. Discussion Papers, No. 41.
made it unprofitable even in the 1980s). The closing of cement factory, the brick
factory in Tata and a significant reduction of production and staff in the telecom-
munication equipment factory, food industry and wool-spinning factory in Ta-
tabánya were the next steps in crisis management. Some Budapest-centred plants
employing women were also shut down (service co-operatives, repair service com-
panies, component manufacturing plants etc.). At the end of year 1993 more than
12 thousand people were jobless in the Tatabánya micro region. The county seat
alone had more than 6 thousand jobless residents (Bencsik 2000). Unemployment
was the highest in Tata 10%, in Tatabánya 9.7% and in Oroszlány 8.2%. The sur-
rounding settlements produced generally half-two-thirds of these values (an aver-
age of 5–8% the highest rate 16.7% was registered in Vértestolna, the lowest 4.9%
in Vértessomló).
In Tatabánya the economic crisis lasted until the mid–1990s. Local economic
development policy was based on the attraction of multinational firms and on the
involvement of their venture capital into the economy to facilitate the restructuring
of the area’s industrial structure. The number of foreign-interested firms is 400 in
the area with a capital asset value of 100 million Euro. 80 per cent of this sum is
concentrated in Tatabánya. Another 0.5 billion HUF of new foreign venture capital
has arrived in the city for building new factories, machines, assembly lines. All
these reduced unemployment to half of the earlier 1993 rates (4% in Tatabánya
micro region, 5% in Tata micro region, 6% in Oroszlány micro region). Car com-
ponent manufacturing, electronic industry and the production of chemical industry
and environment protection equipment turned into the main profiles of the econ-
omy of Tatabánya. About 40 enterprises are operating in the city’s industrial park
offering 6000 job opportunities (Baráth–Molnár–Szépvölgyi 2001).
In Tata the manufacturing of cooling equipment became dominating (such as
Güntner-Tata, Helkama-Forste, Mirelta). The building-ceramics industry, the tra-
ditional but continuously developing sector of building material industry, also re-
vived. The city and its environment are still in a shortage of industrial investors.
The current investment projects are targeted at the development of the city’s terti-
ary sectors of tourism and commerce. In Tata, the traditionally tourism-oriented
city, the elite is interested in preserving the continuity of the bourgeois-aristocratic
traditions and values. They are aware that that macroeconomic development alter-
natives and perspectives of the city being on the periphery of modernisation cannot
support the hopes of the intelligence for the conservation of these value attitudes.
For this reason they are not supporting the city’s multinational-firm oriented devel-
opment policy and making violent attacks against the ideas of modernisation inter-
ested groups. They are also opposing the programmes of ‘developers’ being ready
to sacrifice the city’s traditional image for change. They are interested in preserv-
ing the city’s old traditions, in the development of the city’s traditional values of
spa and cultural tourism. However the ‘modernisation party’ is holding stronger
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Pécs : Centre for Regional Studies, 2003. 33. p. Discussion Papers, No. 41.
political positions now and they are using this political power for creating a dou-
ble-sided situation. On the one hand they are moving the old, derelict industrial
plants – brick factory, assembly lines – out of the city centre, on the other hand –
following the example of Tatabánya – they are building an industrial park to com-
pensate the loss of industrial jobs. This group would much more be interested in
the involvement of the capital of external financial partners, but all the goods that
were ‘on sale’ have already been sold, thus nobody can bring ‘economic salvation’
for the city by increasing the low financial resources of local public institutions.
The ‘city of schools and pensioners’ image, the weakening of the earlier regional
functions, the ill-traditions of subordination of local municipalities to county gov-
ernance, all these continuing for several decades worked against bringing through
local projects successfully. In other words, “the city has its own development
speed’ but large-scale economic (industrial) development strategies do not fit into
its strategy and neither offer an easy way to go out of the crisis. This strategy is
rather offering a slow progress ‘in the shadow behind the city of Tatabánya’
through the ‘micro-industrialisation’ of local economy. It also very rarely occurs
that development programmes meet the interests of industrial, military and mod-
ernisation oriented urban lobby groups.
Oroszlány would need a few more years to modernise its economy. Due to the
ambiguity of the objectives of the national energy policy the threat of shutting
down the city’s power plant was maintained for several years. The closing down of
power station alone would have raised the city’s unemployment to 40% as almost
half of the city’s active wage earners are employed in the power plant – mine joint
corporation. Today this threat has gone with the launch of retrofit programme in
2002. This programme provides flue gas desulphurisation filters to reduce the
emission of power plant to comply with the European and Kyoto standards. The
programme is extending the lifetime of corporation by 10–15 years in this way.
The rapid development of the city’s industrial park and the stabilisation of the local
budget resulted in fundamental changes regarding the city’s industrial structure.
Textile industry and component manufacturing have leading role in the city’s
economy through the activities of multinational firms in the industrial park (Kolo-
man-Handler, Bau Wear-Text, Bebush Hungaria, GMD Hungary, Frimo, Weslin).
The total volume of investments was 120 million Euro and by 2004 the number of
jobs in the industrial park may rise to 2 thousand from the present 750. Experts say
at least 300–350 jobs should be created in the city annually to get through the city’s
structural crisis within a ten-year period. Agricultural food processing is the most
typical branch of economy in the vicinity of Oroszlány, which in the majority of
cases is completed with textile industry and component manufacturing (Oroszlány
város … 2000).
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Pécs : Centre for Regional Studies, 2003. 33. p. Discussion Papers, No. 41.
the main reason of the city’s public road accessibility problems. Miskolc has good
railway connections. During the 1990s the area had low attractive force on foreign
venture capital. However, during the past ten years local institutions generated sig-
nificant economic development in the city and its environment.
The economic development of the city and its environment is based on local
iron are having been discovered in the second third of the 1700s (Upponyi Moun-
tains ), on the woods of Bükk mountains and on the water supply of Garadna
brook. The nearby forge mills were the predecessors of the Diósgyőr Iron Works
having been opened in 1868. The transportation of raw materials was made possi-
ble by the railroad system having been completed by 1859. The local brown coal
(Sajóháza 1786, Diósgyőr 1830) the extremely rich geological resources (earth sili-
con, zeolite, calcium sulphate, anhydrite, perlite, kaolin, rhyolite, tufa etc.) the ex-
isting manufacturing local traditions and trained workforce are very important fac-
tors of the area’s economic development.
At the turn of the 19th and 20th centuries several processing and industrial plants
were built in and around the city4 and the local infrastructure also significantly im-
proved. This largely contributed to the development of industrial culture and to the
growth of population before the years of World War I. The change of borders re-
sulting from the Trianon Peace Treaty increased the socio-economic, commercial,
financial, cultural, organisational roles of Miskolc. The economic prosperity of the
Second World War gave another impulse to the city’s socio-economic develop-
ment. The losses and the aftermath of the War reduced the number of local resi-
dents to 109 thousand by 1945 but de to the high natural increase of population,
industry generated immigration and the changes of administrative borders this
number almost doubled by 1980 reaching the value of 213 thousand.
Since 1980 the number of population has fallen off by 40 thousand, this is an
annual average of 2000. Today the city has a bit more than 170 thousand residents
(the migration balance between 1990–2000 shows an annual deficit of 2300–500).
The county’s declining industrial activities are clearly illustrated by diminishing
industrial job opportunities. While in 1985 there were 140 thousand industrial jobs
here but by 2000 this value dropped to 53 thousand. The late 1970s were the top
years with a value of 150 thousand jobs. During the past ten years of restructuring
chemical and light industries became the leading economic sectors and this struc-
ture seems to be maintained for a long-term period. In year 2000 the gross value of
industrial production was 633 billion HUF in Komárom-Esztergom County (of

4 Such as: gas works (1882), telephone exchange (1885), soap factory (1892), stone dish
and clay factory (1894), the start of tram traffic (1897), agricultural machine factory,
locksmith’s ware plant (1905), cement and concrete factory (1906), knitting and weaving
mill (1911), brick factory (1912), ironware and machine factory (1912, 1929), steel wire
and wirework factory (1912), food-canning factory (1923) etc.
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Pécs : Centre for Regional Studies, 2003. 33. p. Discussion Papers, No. 41.
them 67% was attained through export) while the far bigger and far more populated
Borsod-Abaúj-Zemplén County produced only 649 billion HUF (with an export
rate of 48%). By the GDP per capita indicator and the 80–85% of the Hungarian
economic development average Borsod-Abaúj-Zemplén is the last among
Hungarian counties. Heavy industry has good traditions in the county but it is too
concentrated and too much involved in structural problems5. Finished industrial
products generally have low procession content, they are very sensitive to business
trend changes and the efficiency of their manufacturing process is also low
(Borsod-Abaúj-Zemplén megye... 1998).
Miskolc has an enormous hegemony in the field of economic services (trans-
portation, storage, postal, telecommunication services), wood processing, paper
and printing industries (>90–95%), real estate business and trade-repair industries
(approx. 90 and 80%) over the county’s economy. Among industrial activities
hardware, metal processing industries, electricity, gas, steam and water service in-
dustries are the most dominant in the city. One third of industrial products are sold
within the local industrial sector, this is one-fifth of the value of county’s total in-
dustrial product sales. Hardware and semi-finished products manufactured by the
successors of the biggest state plants are amounting up to one quarter of the city’s
commercial export. The low demand for the city’s industrial products on interna-
tional markets and the city’s only 10% representation in the county’s total export
are clear signs of structural problems. Several thousand jobs were terminated at the
city’s iron and steelworks, at the machine factory, at the local mines and at the
wireworks plant. The glass factory and several other small-scale state companies
were permanently shut down. Complete industrial sectors disappeared or got into a
deep crisis during the economic restructuring period (mining and metallurgy were
terminated, heavy chemical industry has undergone a complex transformation pro-
cess).
All these produced higher unemployment in Miskolc and its environment than
in Transdanubia or in Tatabánya and its environment. The unemployment average
of Borsod-Abaúj-Zemplén County was the highest (15.3%) in 1977. In year 2000
this value was 11.7% while the national average was 6.4%. The unemployment
indicator of Miskolc is still high 12% equalling up to 20 thousand jobless people.
The years coming after the change of regime brought positive changes for the
economic structure of Miskolc and environment as well. The one-sided dull struc-
ture of the economy of the previous period was coloured by the emergence of new
industries. Although this drastically reduced the volume of unproductive capacities,

5 The majority of the fixed asset value of the county’s industry and more than two-thirds
of the county’s industrial jobs are concentrated in the Sajó Valley. At the same time only
half of the county’s total population are living there. Thus, the county has large areas
having been left without industrial job opportunities.
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Pécs : Centre for Regional Studies, 2003. 33. p. Discussion Papers, No. 41.
equipment and jobs it was not followed by the construction or implantation of new
jobs, new factories, new enterprises. For this reason creating new jobs in the city
and its environment is one of the major tasks of the future.
Foreign venture capital came to the city mainly for purchasing property or
capital share. For all that the number and importance of foreign oriented businesses
is continuously growing but the speed of their growth is far below the speed expe-
rienced in other parts of Hungary. The shortage of capital is well illustrated by the
fact that the volume of registered capital assets per company is only a little bit
higher (53–54%) than the national average, while the amount of foreign capital per
company is lower (45%) than the national average.
4 Microregional economic development strategies
Hungarian researches claim that economic transition takes place differently in
every region and settlement. This is partly caused by the economic and social dif-
ferences having accumulated in the past and the transition process, partly by the
different features of the evolution of market economy.
Economic transition has common trends as well, that are derived from two ma-
jor economic development strategies. In the first strategy local institutions includ-
ing local governments are doing their best to involve external – mainly foreign –
capital resources into local economy. In the second strategy local organisations
facilitate economic restructuring through different forms of indirect or direct state
assistance (Keune 2001).
In the case of our two sample areas a mixture of the two economic development
strategies are applied. In the regionally more advanced Tatabánya micro region the
central government’s assistance was less dominant, while the role of market trends
and external – mainly foreign – investors was stronger. At the same time in
Oroszlány – a less developed city of the West Hungarian region – the privatisation
problems of the transformation of the state socialist industrial structure badly need
the active intervention of the state. In the economically less developed Miskolc
region the intervention of the state – in several cases through the pressure of local
society – is much more applied, as the involvement of foreign capital resources has
smaller role in economic restructuring. The mixed application of the two economic
development strategies is seen both in cities and their environment: in cities the
effects of foreign capital investments are generally stronger than in rural areas,
where the dominance of the state development policy is originating from the cen-
tral government’s rural development programmes.
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Pécs : Centre for Regional Studies, 2003. 33. p. Discussion Papers, No. 41.
The application of different economic development strategies depends on sev-
eral factors: determinations, value preferences and problem management methods.
By determinations we mean the choice alternatives of settlements and regions on
their economic development strategies are determined by their historical back-
ground, infrastructure, by the presence of home and regional capital investors, by
their geographical position and the market value of their local labour force. The
role of institutional and social interests is extremely important here.
After the change of regime the creation of new job opportunities was the most
important for groups standing on lower levels of social hierarchy. The impacts of
global economy, the immigration of multinational firms were quick solutions for
the problem of unemployment. The social and consuming demands of middle-class
families were fulfilled by their rising incomes and by the widening range of prod-
ucts. Both the old and the new elite groups were interested in foreign capital-based
economic development that will fulfil their expectations for acquiring high profes-
sional competence, everyday culture (knowledge of languages) and high lifestyle.
Due to the changed role of the state the new local institutions and local govern-
ments having been formed through the decentralisation of regional development
had similar interests: when facing shortages of foreign capital resources, slow prog-
ress in building a bourgeois society, low financial resources, they quickly grabbed
the opportunities that global markets offered them: getting relatively independent
from the state, and achieving some freedom and autonomy. All these urged for
making a consensus on the approval of globalisation and foreign-capital oriented
economic development strategies.
At the same time more and more people are opposing this strategy and their
opinions are supported by a series of scientific arguments pointing out the negative
impacts and conflicts foreign capital investments create. A part of oppositions and
arguments is standing on economic basis. The objections against foreign capital
oriented economic development strategies are based on research results claiming
that foreign-oriented large firms integrate neither local nor regional economy (or if
so they integrate only a small segment). They are not increasing an area’s labour
market, just using cheap and untrained workforce only. They can do it because of
the weakness of civil society and trade unions (Keune–Nemes Nagy 2001).
Another group of oppositions is targeted at the unfavourable social impacts and
social conflicts this economic development strategy is bringing about. They argue
that disparities and the social and environmental problems that globalisation creates
are hindering even the development of the economy itself.
The concurrence of different economic development strategies is partly hinder-
ing and partly supporting the formulation of spatial economic relations and the co-
operation of economic actors. State and global influences create a various level and
intensity of external orientations and interest dependencies. At the same they are
creating possibilities for regional economic actors for balancing out the impacts of
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Pécs : Centre for Regional Studies, 2003. 33. p. Discussion Papers, No. 41.
different external forces. They can increase their power and represent their interests
through their global and regional co-operation system against the power of state
while through the intensification of their interrelations with state and regional ac-
tors they can increase their power and influence against the powers of the global
world.
5 The different phases of microregional development
Globalisation, the European regional integration, the impacts of the rise of bour-
geois society are taking place at different stages of regional, urban and rural devel-
opment. Empirical researches refer to the first one as crisis management transfor-
mation phase while the second one is defined as recovery transformation phase.
The differences between the two phases of our sample areas go back to the ma-
jor features and key mechanisms of their socio-economic transformation. The co-
operation between urban and rural areas, the partnership of social actors and the
attitudes towards co-operation are also key aspects. The economic and social as-
pects of the major development concepts the representation and realisation of so-
cial interests with the share of social and economic aspects are another points of
consideration. And finally, the actors’ interpretation of competitiveness and suc-
cess are very important when marking the border between the different phases of
regional development. Although the two development stages of our sample areas
are independent from each other, they have elements in common that are not bound
to a certain time or period.
5.1 The features of crisis management transformation
Crisis management transformation is the period of economic restructuring, in-
cluding the establishment of relevant regional development and political institu-
tional system, the new phenomena originating from the domination of global econ-
omy, and the building of new connections between global and local economy.
In Tatabánya the restructuring of local economy started at this stage. Local
economy turned into diversified, the city’s earlier monofunctional (heavy indus-
trial) profile was changed. The city’s regional, local geographical features, its ad-
vantageous position on the Vienna-Budapest axis, the facilities of the M1 motor-
way offered innovative intervention possibilities in the field of urban development
and planning. The city’s connections with global economy also provided chances
for the diversification of the earlier monofunctional, heavy industry dominated
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Pécs : Centre for Regional Studies, 2003. 33. p. Discussion Papers, No. 41.
economic structure. Foreign capital investments and the emerging new SMEs cre-
ated a new corporate and enterprise structure to replace the earlier state company
system and for easing the area’s dependencies from the state.
As Miskolc has economic dominance over Borsod-Abaúj-Zemplén County, the
city is trying to follow a metropolitan development model of a rigid economic
structure in a relatively disadvantageous transport and geographic situation.
The most dominant features of this phase are as follows: changes in the centrali-
sation of public finance, increasing state curtailments6 cutting down local tax reve-
nues to be spent locally, in this way increasing the dependency of municipalities
from the state. The dependency from market trends, global economy, foreign in-
vestors and multinational firms is also growing at this stage. But in Miskolc there
are only ‘hopes’ for the coming of market-generated economic development.
Following the interventions of urban policy the management of the complex
economic, social, political and environmental crisis started. The cities – especially
Tatabánya – have successfully solved the majority of economic crisis issues having
been accumulated during the past state socialist system. The environmental and
social threats (such as environmental pollution, unemployment) have been eased at
such places where the demands of economic transformation, mainly the interests of
foreign capital oriented strategies had required it.
Crisis management transformation is characterised by the dominance of actors
representing globalisation interests and by the defencelessness of regional actors.
Economic crisis management and the restructuring of urban economies resulted
in the growth of regional and economic disparities. The speed of the integration to
global economic trends is fast in case of Tatabánya but slower in Oroszlány and
Miskolc. Due to the backwardness having been originated to the conception change
and state socialism Tata is lagging behind these three cities and has an economic
strategy focusing partly on the development of tourism, partly on the development
of industry.
At this phase mostly core settlements such as Tatabánya, Miskolc, Oroszlány
and Tata are affected by the influences of globalisation. The development of the

6 The increase of state curtailments is derived from he diminishing share of personal
income revenues that can be spent locally. Starting from the value of 50% they were
gradually cut down to a value of 5% by 2002 (interim values are 1992: 50%, 1993: 30%,
1996: 25%, 1997: 22%, 1998: 20%, 1999: 15%, 2000: 5%) during a ten-year period. They
are also resulted from the decrease of relative and absolute (such as the state's contribution
to settlement operation costs: 1993: 3,950 HUF per head, 1998: 1,200 HUF per head) from
lowering the value of some elements of government grants and subventions, from the
cutting down of general state support provided to the operation of villages, the low funding
of additional grants for underdeveloped settlements, of housing management, of holiday
resort functions, of social security costs and of child and youth care benefits). All these
changes have significantly reduced the local revenues of settlements.
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Pécs : Centre for Regional Studies, 2003. 33. p. Discussion Papers, No. 41.
environment of these cities follows the economic and social pattern of core cities
and also harmonises with the transformation mechanism of core areas.
The spatial relations of these cities were a bit contradictory in the past. The re-
lationship of industrial cities with their environment was hierarchical for a long
time. Mine cities – such as Tatabánya and Oroszlány – and Miskolc the industrial
city enjoyed priorities in infrastructure development (although their importance
within the central re-distributive mechanism was lower in the 1970–1970s than in
the 1950s). At the beginning of the change of regime suburban municipalities were
interested in separation and in the increase of their autonomy. The legal and eco-
nomic background for meeting these demands had been created by the new local
government act.
During the transition period the economy of villages in the environment of our
sample cities was also prospering and this created new economic and social func-
tions for these villages themselves. In the crisis period of the 1990s these villages
provided jobs for the unemployed citizens. After the process of urban de-industri-
alisation many citizens moved out to the surrounding villages where life was
cheaper or could find some job opportunities.
Urban agglomerations, with their better natural environment or suburban hous-
ing facilities attracted middle-class and high-class families to move out of city
centres. The changing functions and the new social structure of urban agglomera-
tions settlements transformed the relationship between core cities and their envi-
ronment.
Our research started from the general hypothesis that regional co-operation is
one of the most essential criteria of competitiveness and long-term success. Our
results indicate that during the period of deep crisis, at the beginning of the crisis
management period the city and its environment do not co-operate, they are func-
tioning independently from each other. After the deep crisis period has gone the
more intensive development of core cities than their periphery arises several mu-
nicipal and social conflicts. Meanwhile the core cities do build a basic co-operation
system with their environment Later on, in the next phase of recovery transforma-
tion a more intensive system of spatial relations will be established between them.
The crisis management period was concentrating on the social aspects and in-
terests of economic and regional development strategies. Other social aspects and
interests have no or very limited chances to be taken into account. In the crisis
management period development concepts do not represent a broad range of social
interests and the chances of building concepts on the basis of wide social participa-
tion are very limited.
It is hard to define the social impacts of crisis management. The winners and
losers of transformation cannot be exactly marked. In general the winners of trans-
formation are the upper middle-class, the economic, political and bourgeois high
society, the multinational firms and their Hungarian satellite SMEs and – at a
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Pécs : Centre for Regional Studies, 2003. 33. p. Discussion Papers, No. 41.
varying level – the relatively low trained and educated but young generation of
middle-class society. The old generation, the previous miners, the unemployed, the
commuters with low professional skills are in general the losers of transformation.
Some professional groups of the political elite and even of the middle-class
were hit by some specific impacts of global economy. The emergence of multina-
tional firms in the Hungarian market brought new wage and power disparities and
pushed the earlier group of decision-makers into the background. Several people
were forced to change their job or in quite a few cases those who were employed at
multinational companies had to accept lower positions of their professional com-
petence. These people are living in far worse housing conditions and receiving
lower incomes than their foreign colleagues. However it is also true that North
Hungary, having been excluded from the impacts of global economy is producing
similar phenomena. In Miskolc several high professionals but bound to the earlier
industrial structure had no other alternatives than leaving the city or taking low in-
come positions that were totally unfitting to their professional competence.
Even the career chances of the political elite were quite contradictory. The im-
portance of regional policymakers was increasing, as the management of multina-
tional firms (in general) were not actively participating in regional policy, though
they had significantly eased the problems of unemployment, one of the major
sources of local social tensions. At present, the future of these regions depends on
the present and future strategies of multinational firms and this is strongly reducing
the actual significance of regional and local policies. For this reason a revision of
the earlier development theories and the establishment of a professional and social
consensus on the future of economy and society and on global and regional actors
and their role are needed. For doing this, it seems, all the preconditions have been
granted by now. As the latest Hungarian literature claims Hungarian economic de-
velopment ‘is getting less dependant from foreign capital. At the same time greater
attention is turned to the role of Hungarian investors, entrepreneurs and to the im-
provement of their handicapped positions’ (Hamar 2001).
5.2 The features of recovery transformation
Our research started from the assumption that at the phase of recovery transforma-
tion urban and regional development processes are turning into the carriers of so-
cial aspects and representations beyond economic interests. The new processes are
based on such development concepts that represent a complexity of economic and
social interests. This will create a balance between the interests of local and global
economy and between economic and social aspects including environmental and
civil society issues. The balancing of different aspects will give larger competitive
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chances for regions and settlements by saving them from socio-economic tensions
and problems resulting from the inappropriate representation of different develop-
ment factors.
Research results revealed some processes pointing at the second stage of devel-
opment. The co-operation of SMEs with multinational firms is a clear sign of the
integration of global and local economies. The preparation of common economic,
regional development programmes, the recognition of the common regional inter-
ests (such as the common regional criteria of the EU accession) of cities with their
environment, are also very important indicators of the evolving new stage of de-
velopment. The intensification of regional ties through the expansion of suburbani-
zation, through the shaping horizontal co-operation of cities with their environment
and increasing local and regional autonomies are all great steps forward.
The economic prosperity of advanced regions and settlements has positive im-
pacts as well, such as the co-operation between local governments and social or-
ganisations will be a must. The interviews provided data on the development of
civil organisations, on the co-operation of urban policy with local citizens but re-
vealed some barriers as well. These are the inappropriate relationship of the state
with local government and civil sectors, the scarcity of funding resources, poor
infrastructure, the absence of co-operation among social actors, the slow rise of
middle-class society, and it missing social basis. The activity of civil organisations
was the larges in tat among our sample areas but they are still unable to protect or
represent their own interests in some cases. These organisations are not free of
politics but they are neither organised by the interests of political parties. In the
social context of cities they are somewhere between the parties and residential dis-
tricts.
Both our research and regional-level opinion polls verify that the during the cri-
sis period of the 1990s the expectations addressed to the central and to the local
governments were the strongest for the stability of jobs, for the security of their
workplace, for the support of enterprises and for the promotion of investments. But
another survey having been taken in the second half of the 1990s revealed a change
of the earlier demands. The participants of this second survey claimed that beyond
the security of jobs and workplaces and the support of enterprises the protection of
the natural and built environment, the preservation of health, the development of
residential area, the building of an urban milieu, the improvement of public trans-
port, housing conditions, cultural and leisure facilities and the provision of a pro-
fessional training system tailored to the employees’ long-term interest are also very
important for them. These new expectations can be realised through such develop-
ment and success programmes and regional (urban) development concepts that are
based on an integrated model of economy and society and maintain a good balance
between economic and social development.
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Szirmai, Viktória - A. Gergely, András - Baráth, Gabriella - Molnár, Balázs - Szépvölgyi, Ákos :
The City and its Environment: Competition and/or Co-operation? (A Hungarian Case Study)
Pécs : Centre for Regional Studies, 2003. 33. p. Discussion Papers, No. 41.
6 The social interpretation of regional co-operation,
competitiveness and success
The unfavourable tendencies of the economic and social transformation of our
sample areas, the existing conflicts, the several difficulties of regional co-operation
have verified the relevance of the changes of paradigm in our sample areas, i.e. the
necessity of a development strategy taking social aspects into account and regard-
ing economic processes in their complexity. The demands for the continuity of de-
velopment are felt mostly in the – relatively – ‘advanced regions, while the major-
ity of ‘underdeveloped’ regions have a follow-up strategy only, concentrating only
on crisis management and its economic instruments.
The regional, microregional and local variations of positive changes, the
achieved economic results, the new economic structure and the existing social and
microregional co-operation are favouring for the change of paradigm.
There is a consensus among the social actors of our sample area that the results
of economy-focused success and its following competitiveness and development
processes are disputable. At the same time the opinion of social actors on success
and regional competitiveness is different depending on organisational structure and
location.
The actors standing closer to economy are less and while the others bound more
strongly to population and civil society are more aware of the importance of social
aspects.
Success and the ability for success can be measured in several ways. Political
success is something like saving a local natural value, maintaining an organisation,
or lobbying for financial support for changing something. A local businessman
ready to invest heavy sums into industrial projects can be considered as successful
as someone else whose professional competence and fame goes beyond county
borders. Thus, success is not always a pure economic or business or municipal
category. Hungarians tend to believe that everything that may be regarded a suc-
cess – a project, a social event or winning state support – seems to be flagged as the
success of the ruling party and everything that fails is ‘the consequence of the op-
position’s fussiness’. The civil society of these cities is not integrated and cannot
clearly recognise the long-term interests of different groups and circles. The civil
actors have only short-term tactics, small compromises, even more faint hopes,
differentiated financial resources, short-term success policies and failure eliminat-
ing tactics. They have less and more functions than a local society at the same time.
They can (still) turn into local society but beyond concentrating on selfish local
objectives there should be a necessity for the representation of regional and neigh-
bourhood interests as well. If ‘non-voters’ and the actors of civil society can repre-
29

Szirmai, Viktória - A. Gergely, András - Baráth, Gabriella - Molnár, Balázs - Szépvölgyi, Ákos :
The City and its Environment: Competition and/or Co-operation? (A Hungarian Case Study)
Pécs : Centre for Regional Studies, 2003. 33. p. Discussion Papers, No. 41.
sent and limit their interests in a more articulated manner then it will come the time
to select those NGOs that can efficiently influence local public life.
Regional co-operation is also a part of the criteria system of the new interpreta-
tion of competitiveness and success. Our research results, the crisis management of
the early 1990s, the demands of transformation were neither facilitating nor fa-
vouring for conflict-free regional co-operation. The management of complex –
mostly economic – crisis after the change of regime, the restructuring carried out
through foreign capital oriented economic development strategies rather generated
conflicts and unwillingness for co-operation among cities, regions and villages.
The position of settlements co-operating during the complex socio-economic crisis
of the 1990s was not equal. Beyond historical hierarchies new regional and social
disparities evolved among cities and between cities and their environment. These
disparities are originated from differences in regional position, in the
accommodation of foreign capital oriented economic development strategies, in the
relationship between local power and civil societies and in the civil society’s
intervention intensity into local affairs.
At this stage of development those settlements are in more favourable power,
economic and social position that have better regional, transport geography posi-
tions and infrastructure facilities. The historical features, the spatial positions
achieved during state socialism and better accommodation conditions of foreign
capital oriented economic strategies may increase these advantages. Of them inter-
national management relations, conceptual urban policy directives and an institu-
tional system capable for winning the support of civil organisations and a wide
range of residential groups (employees) and media are the most important.
At the beginning of transition the social and spatial conflicts are not sharp. The
dependency of city environment – with the existing conflicts of interests – from the
development process of the core is clearly seen. The core’s success in tackling the
crisis will improve spatial relations but this improvement will also result from the
new economic (satellite firms) and social (suburban) functions of the city environ-
ment and the transmission of the core’s positive impacts. If the core’s crisis situa-
tion has been stabilised – like in case of Miskolc and its environment – the devel-
opment of suburban settlements will take place independently from the core.
As the deep crisis has gone the change of spatial relations is determined by the
earlier phase of economic transformation and development. New urbanisation
trends, global economic co-operation and the European Union’s tendering system
bring new trends into regional level social relations. Although regional level social
conflicts still exist, there is a growing demand for regional co-operation.
The changing interests of social actors also facilitate changes. The negative im-
pacts of the previous development concepts on social actors also increase the de-
mand for co-operation. The economic actors of cities and their environment, mu-
nicipalities and some professional groups have realised that spatial relations may
30

Szirmai, Viktória - A. Gergely, András - Baráth, Gabriella - Molnár, Balázs - Szépvölgyi, Ákos :
The City and its Environment: Competition and/or Co-operation? (A Hungarian Case Study)
Pécs : Centre for Regional Studies, 2003. 33. p. Discussion Papers, No. 41.
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