Globalization and Regional Development in Hungary

Abstract

Hungarian regional development had been suddenly exposed to the effects of globalization as post socialist transition put the country back in to a market economy. The country' s economy has moved quite succesfully towards the knowledge-based economy, and this restructuring made regional inequalities much stronger. A smaller part of the country – first of all the Budapest agglomeration then cities along the Budapest Vienna and the Budapest–Balaton axis became a part of the global economic network. A large part of the country: city regions in Eastern and Northern Hungary as well as slowly recovering industrial districts are in unstable conditions as locally rooted economies have been weakened. The author suggests to paying more attention on promoting low tech, high quality industries in this area. The paper criticises the present regional policy that concentrates development funds on the poorest areas, mostly as welfare contribution instead of development projects. According to the paper, regional policy should strenghten the competitiveness of city regions that entered into global network and should connect more areas to this network by promoting low tech local development.