Discussion Papers 2002.
Regional Challenges of the Transition in Bulgaria and Hungary 7-19. p.
THE REGIONAL EFFECTS OF TRANSITION IN TWO
COUNTRIES OF DIFFERENT ENDOWMENTS
Gyula Horvcith
Historical antecedents
Apart from a few formal similarities ensuing from being part of the same political
bloc for four decades, the 20 th century development of the two countries was fun-
damentally very different. Historical development had tied the two countries to dif-
ferent geo-political gravity zones. Hungary, as part of the Central European macro-
region, could join the mainstream of European industrial transformation much ear-
lier; Bulgaria, by contrast, located in the Balkans and freed from Turkish rule as
late as in the late 19 th century, struggled for decades to establish the basis of a
modern economy. The strategic purpose of the Hungarian economic policy be-
tween the two world wars was to create internal cohesion in a country reduced to
one-third of its former size; whereas the Balkanic-type economy was characterised
by the overall dominance of the agricultural sector. For a few years after World
War II, however, employment was still dominated by the agriculture in both coun-
tries: it accounted for 80 percent of all employment in Bulgaria and 50 percent in
Hungary. Industrial employment was at 11 percent in Bulgaria and 23 percent in
Hungary during the same period. The small number of industrial workers (350,000
in Bulgaria and 700,000 in Hungary) were heavily concentrated in territory. Out-
side the capitals, only in a few major towns provided any industrial employment.
The forced industrialisation process of the socialist planned economy during
the 1950s and 1960, which in both countries formed the basis of the modernisation
programmes aimed at strengthening the new regime, had ambiguous results. The
policies of this period definitely encouraged the growth of industrial employment
and its more even territorial distribution, had a strong impact on the settlement
structure, stepped up the process of urbanisation, and their social and cultural pro-
grammes helped the rural areas become more civilised. The indicators of quantita-
tive development improved remarkably in both countries. Between 1950 and 1970,
the rate of urban population grew from 20 percent to 53 percent in Bulgaria, and
from 37 percent to 45 percent in Hungary. By 1970, industrial employment reached
1.1 million in Bulgaria and 1.7 million in Hungary. The economy, however, owing
to collective ownership and the isolated economic integration, got stuck on a low
level of development. The structural changes of the economy were paralleled by a
Horváth, Gyula: The Regional Effects of Transition in Two Countries of Different Endowments.
In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 7–19. p. Discussion Papers. Special
decrease in territorial differences; yet, the emerging relative territorial balance in
fact meant the even spreading of poor performance. In 1975, the GNP per capita
figures of the two countries were nearly equal, while territorial inequalities were
remarkably contrasted. In the two countries, half of the territorial units surpassed
the mean GNP figure of the COMECOM countries. 11 territorial units out of 28 in
Bulgaria and 14 out of 20 in Hungary surpassed the Eastern European average.
The centralised economy assumed completely different shapes in the two coun-
tries: they greatly differed in their system of economic organisation, in their tools
of economic policy and in the directions of their European contacts. After the 1968
reforms of economic policy, Hungary set off, though cautiously and not very
steadily, on its way to a market economy; Bulgaria, by contrast, apart from a few
minor realignments, firmly retained the outdated structures of a planned economy
and political homogenisation until as late as the early 1990s. The "soft dictator-
ship" left its mark on Hungary also in regional and settlement development. At the
beginning of the socialist period, regional development had a number of ideologi-
cal goals: to ensure equal housing opportunities to all citizens, to level the differ-
ences in the living standards of the various social layers, and to represent the
working class in every town. During the later periods of state socialism, these goals
were replaced by practical technocratic issues. While the political declarations
eulogised the soviet example, grains of the Western European patterns appeared in
all aspects of the practical regional and settlement development policies and in the
spatial organisation of the government; from the creation of basic service centres to
the establishment of district schools and the process of administrative integration.
In the central policies of regional development, the tools of economic planning
were increasingly combined with elements of a normative regulation. In 1971, the
Hungarian government issued a decree defining the long-term goals of regional and
settlement development; in 1985, the Parliament passed a ruling on regional devel-
opment.
The areas of regional assistance, the meso-regions, are also organised differ-
ently. The formal territorial administrative system of Hungary did not change. The
20 territorial units (19 counties and the capital) continued to form the basis of ter-
ritorial administration after World War II. The only changes in the system of ad-
ministrative units were the abolishment of district councils in 1971 and a certain
degree of concentration of the administration of settlements between 1950 and
1990: the administrative tasks of 3200 settlements were performed by 1700 settle-
ment councils. After the change of regime, however, each settlement became a
separate municipality.
Territorial administration underwent several changes in Bulgaria. The fact that
the territorial units, like in most other Eastern European countries, were not consid-
ered a stabile framework for the organisation of the state, is explained by the fact
that in the new nation states that emerged after World War II. meso-level public
administration lacked those centuries-old traditions that had existed in Hungary. In
1959, the 13 territorial units in Bulgaria were replaced by 28 districts (okrugs); the
8
Horváth, Gyula: The Regional Effects of Transition in Two Countries of Different Endowments.
In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 7–19. p. Discussion Papers. Special
1987 administrative reform created 9 larger territorial units (oblasts) in place of the
counties; finally, in 1999, the former 28 districts became the basis of territorial ad-
ministration. These territorial units, however, perform the central administrative
functions of the state, and fundamentally serve as the deconcentrated units of the
central government.
In Hungary, by contrast, the unified territorial administration system of the state
was not established: the counties are local governments led by elected bodies. The
one and only element of the sub-national local government system of Bulgaria is
the set of 262 "settlement groups" (obshtinas). One settlement group includes an
average of 20 settlements, and the average population of these municipalities is
31 thousand. This is ten times as high as the average population of one municipal-
ity in Hungary. These large municipalities in Bulgaria were created in 1979. Then,
291 sets of settlement groups were established (selishtna sistema), which formed
the basis of a long-term development strategy. These settlement groups were classi-
fied in five types; three of these types are classified as underdeveloped and cover
44 percent of the country's population.
In Hungary, quite the opposite processes took place as in Bulgaria. As the first
step towards the reform of the heavily centralised administrative system, the dis-
trict councils were abolished in 1971, and in the 97 districts only the central ad-
ministrative organs continued to function with limited scope of authority. In 1985,
the districts were eliminated from the Hungarian administrative system. After the
change of regime, all settlements became independent communities, which posed a
great problem in the territorial organisation and development of the administrative
and infrastructural services. In 1994, therefore, 150 small areas were defined for
statistical and planning purposes. A small area is a group of geographically linked
settlements with real economic and infrastructural contacts. Small areas do not
have administrative functions; they only perform tasks of co-ordination.
From the 1970s onwards, a limited number of regional elements appeared in the
long-term economic plans of the Eastern European countries, mainly following the
Soviet attempts in regionalisation. The territorial framework of economic planning
was the system of the planning and economic regions. Six such regions were de-
fined in both countries. Owing to the centralised political system, however, no or-
ganisational changes toward decentralisation could be administered in these territo-
rial units. The planning and economic regions only served the purposes of national
planning. In Bulgaria, they played an important role in the distribution of central
resources. In Hungary, they had no such function, but they greatly contributed to
the modernisation of territorial statistical practices and to the development of re-
gional studies. The spreading of the regional approach could also be witnessed in
some sub-systems of the economic policy. There was an increase in the amount of
development resources that the county councils could dispose of independently; a
central regional development fund was established (with the aim to facilitate the
structural transformation of the mining areas, the development of factories and
plants in Budapest, and the industrial development of the selected rural centres);
9
Horváth, Gyula: The Regional Effects of Transition in Two Countries of Different Endowments.
In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 7–19. p. Discussion Papers. Special
and pilot programmes were launched for the development of backward rural areas.
In neither of the countries were the territorial programmes closely linked to the
new planning regions: in Bulgaria, the settlement systems, while in Hungary, the
counties and the assisted areas identified within them were the beneficiaries of the
poorly financed national territorial policy.
Changes in the settlement structure were primarily quantitative. By the late
'90s, the rate of urban population reached 69 percent in Bulgaria and 63 percent in
Hungary. The weight of both capitals, at the peak of the town hierarchies, is re-
markable: Sofia accounts for 14 percent, Budapest for 18 percent of the population
of the respective countries. The role they play in the economy and in cultural life is
more dominant than their share of the population. The important elements of the
market economy are concentrated in the capitals (Table 1). Several elements of a
decentralised development policy could be designed to decrease this unfavourable,
decades-long territorial concentration.
In the shaping of a decentralised development policy, the large and medium
towns of the second level of the town hierarchy play an important role. The en-
dowments of the two countries are similar in this respect. Bulgaria has three towns
with populations over 200,000 (Plovdiv, Varna and Bourgas), and three towns
(Rousse, Stara Zagora and Pleven) between 130,000 and 170,000. Hungary has one
town over the population of 200,000 (Debrecen), while three regional centres (Mis-
kolc, Szeged and Pecs) have populations of around 160,000. In Bulgaria two towns
(Sliven and Dobrich) have populations between 100,000 and 130,000, while in
Hungary there are three such towns (Gy8r, Nyfregyhaza and Szekesfehervar).
These medium-large towns have strong economic and administrative potentials that
enable them to perform regional roles.
Table 1
The weight of capital cities in some activities, percent, 2001
Activity
Sofia
Budapest
Industrial output
15.9
17.6
Foreign direct investment
49.9
56.5
University students
43.3
49.2
Employees in R&D
72.7*
55.8
* 1995
Source: Own calculations based on national statistical yearbooks.
The medium town network, with populations between 50,000 and 100,000, in-
cludes 15 towns in Bulgaria and 12 in Hungary. The small town network, with
towns of less than 20 000 inhabitants is dense in both countries: it includes 152
towns in Bulgaria and 160 in Hungary. The spatial organising functions of most of
the small towns are weak. They can only provide low quality services to the rural
settlements in their sphere of gravity, and they don't play an important role in the
10
Horváth, Gyula: The Regional Effects of Transition in Two Countries of Different Endowments.
In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 7–19. p. Discussion Papers. Special
employment of the inhabitants of these settlements. In most of these towns, the
majority of jobs were terminated with the closing down of the former industrial
sites after the change of regime.
The rural settlement structure is also rather differentiated. Bulgaria has a large
number of villages (5100), whereas in Hungary there are much fewer of them
(2900). Although in European comparison both countries have a high proportion of
villages, this type of settlement is far more typical of Bulgaria. There, 83 percent of
all villages have fewer than 1000 inhabitants; this figure in Hungary is 59 percent.
While in Bulgaria villages of over 5000 inhabitants are rare (there were only 8 such
settlements at the mid 1990s), in Hungary 38 settlements belonged to this category
in 2001.
To sum up, the following table contains the different spatial units of the two
countries. Table 2 indicates, that the differences in size between the territorial lev-
els of the two medium-sized countries are due to the different settlement structures
and local government systems.
Table 2
The NUTS systems, 2002
Bulgaria
Hungary
Number
Average population, '000
Number
Average population, '000
NUTS 2
6
1380
7
1454
NUTS 3
28
296
20
509
NUTS 4
262
31
150
68
NUTS 5
5340
1.5
3135
3.2
The regional effects of transition
The soviet-type political system collapsed in both countries at the very beginning
of the 1990s. The economic crisis that took place before and after the transition
induced similar processes in both countries, but these processes were of different
extent and magnitude and of different consequences.
There are significant differences between the two countries in the political con-
ditions of the first years of parliamentary democracy, in the pace of the legal regu-
lation of the market economy and in their economic performance. Although the
two countries produced nearly the same economic output three decades ago, the
gap between their performances has widened significantly. Hungary has recovered
from the transformation crisis and has started to grow, whereas Bulgaria is only
now beginning to introduce the crucial economic reform measures (Table 3). On
account of the differences between the state of their economies and of their demo-
cratic institution systems, the two countries will qualify to access the European
Union at two different dates.
11
Horváth, Gyula: The Regional Effects of Transition in Two Countries of Different Endowments.
In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 7–19. p. Discussion Papers. Special
Table 3
Main macro-statistical data, 1999
Bulgaria
Hungary
Average population, '000
8,211
10,068
Total area, km2
110,910
93,030
Gross domestic product per capita at current prices in PPS, euro
4,749
10,705
GDP percentage change over the previous year
2.4
4.5
Structure of production in percent of GDP
Agriculture
17.3
5.5
Industry
23.1
28.2
Construction
3.7
4.6
Services
551?
61.7
Exports of goods and services in per cent of GDP
44.1
52.6
Imports of goods and services in per cent of GDP
51.9
55.0
Gross foreign debt of the whole economy in per cent of GDP
79.8
55.9
Natural growth rate per '000 of population
-4.8
-4.8
Economic activity rate, percent of labour force
49.2
49.6
Unemployment rate
16.0
5.3
Average employment by sectors, per cent
Agriculture and forestry
26.6
7.1
Industry
25.1
27.4
Construction
4.0
6.6
Services
44.3
58.9
Railway network, km per '000 km 2
38.7
83
Length of motorway, km
324
448
Number of cars per '000 inhabitants
232
224
Telephone subscribers per '000 inhabitants
397
358
Number of Internet connections per '000 inhabitants
3.2
13.6
Source: Bulgaria 2000, Hungary 2000.
The radical transformation of the economic structure affected the different re-
gions in different ways. The losers of transition, like in most other European coun-
tries, were the areas dominated by heavy industry and mining, and, as a special
Eastern European feature, the extensive agricultural areas. The emerging market
economy brought about the strengthening of regional inequalities. Studies carried
out in Hungary in the mid-1970s showed that the performance of the most devel-
oped area, Budapest, was twice as high as that of the least developed counties of
the North Great Plain. In 1999, the most developed Budapest boasted a GDP per
capita figure 3.5 times as high as that of Szabolcs-Szatmar-Bereg, the most back-
ward Northeast Great Plain county and that of Nograd county, which had suffered a
deep industrial crisis. For Bulgaria no county-level GDP data are available; in the
mid-1990s, the gross output figure of the most developed former oblast was 3.5 as
12
Horváth, Gyula: The Regional Effects of Transition in Two Countries of Different Endowments.
In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 7–19. p. Discussion Papers. Special
high as that of the least developed one. The income gaps between the newly
formed counties are probably even higher. Interestingly, however, the inequalities
among the NUTS 2 regions are of a different size. The difference between the GDP
per capita figure of the two extremes (the most developed region, Central Hungary,
and the least developed one, the North Great Plain) is 2.4-fold. In Bulgaria, by
contrast, the difference between the most developed Southeast region and all the
others, which are nearly at the same level, is less than 15 percent. Comparing the
regional data of the member states and the candidate countries we find that the
Bulgarian regions are at the bottom of the European ranking, while in Hungary two
regions are above the EU average (Central Hungary and Central Transdanubia),
and one (West Transdanubia) is near that level (Table 4).
Table 4
Level of development of NUTS 2 regions, 1998
As a percentage of population
Level of GDP in PPS as a percentage
Number of regions
of the country
of EU15 average
in Bulgaria
in Hungary
in Bulgaria
in Hungary
75-50
—
2
—
39.2
49-36
—
3
—
42.6
35-26
—
2
—
18.2
25 or less
6
—
100.0
—
Source: Own calculations based on national statistical yearbooks.
The macro-regions, irrespective of their performance, are clearly not homoge-
neous units. Certain areas of each region have become the losers, other areas the
winners, of the transition, depending on the former development level of their
economies and on the intensity of the restructuring process the underwent. One
condition of an effective regional policy is the accurate definition of the areas af-
flicted by the negative effects of transition. It is an important achievement of the
regional policies of both countries that the respective lists of the problematic areas
are available to the political decision-makers. The areas eligible for assistance were
defined in both countries by a government decree. In Bulgaria, 77 settlement group
local governments were labelled as underdeveloped and 20 as industrial declining
areas; the 36 border municipalities are also subject to assistance. In Hungary, 89
small areas are eligible for assistance (83 of these are underdeveloped and in 6 in-
dustrial restructuring is recommended). The Bulgarian policy defines 5 categories
of regional development target areas (developed, developing, industrial declining,
underdeveloped rural, and cross-border co-operation areas), while in Hungary four
groups are defined (underdeveloped, industrial declining, agricultural problem, and
high unemployment areas). The Bulgarian policy allowed for a rather narrow scope
of assistance: eligible areas (underdeveloped and industrial decline areas) comprise
13
Horváth, Gyula: The Regional Effects of Transition in Two Countries of Different Endowments.
In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 7–19. p. Discussion Papers. Special
only 17.5% of the country's population. In Hungary, this figure is 33.5% (Table 5).
There are also differences in the territorial structure of the backward areas. In Bul-
garia, the population of the eligible areas are evenly dispersed throughout the
country, whereas in Hungary the three eastern regions comprise two thirds of the
assisted population (Figure 1).
Table 5
Assisted areas in 1999
Bulgaria
Hungary
Type of areas
Population, Population coverage, Population, Population coverage,
'000
per cent
'000
per cent
Underdeveloped
—
—
3017
29.7
Industrial restructuring,
declining
438
5.3
284
2.7
Agricultural problem
—
—
1322
13.0
Underdeveloped rural
1008
12.2
—
—
High unemployment
—
—
1742
17.1
Specific problem areas total
1446
17.5
3408*
33.5
Cross-border co-operation
1622
19.6
—
—
Growth
2970
35.9
—
Development
800
9.7
—
—
Note: One eligible area can be included in one or more problem types. The population of eligible
areas was only counted once.
Source: Geshev 2001, Horvath 1998.
From among the various crisis phenomena of problematic areas, we will now
only discuss high unemployment. In 1999, unemployment was at 16.0 percent in
Bulgaria and 6.4 percent in Hungary. The district figures dispersed between 4.2
percent (Sofia) and 29.7 percent (Targovishte). In ten districts, unemployment sur-
passed 20 percent (covering 25 percent of the whole population). In Hungary, the
capital saw the lowest rate of unemployment, at 5.3 percent, while the highest fig-
ure was in Borsod-Abadj-Zemplen, 13.1 percent. Unemployment surpassed 10 per-
cent in four counties (covering 19 percent of the total population). In part of the
underdeveloped and high unemployment areas of Bulgaria, the rate of ethnic mi-
norities is high, especially that of the Turkish minority (Gyurova 2002). In five
districts, more than one third of the population is Turkish (65.9 percent in Kardz-
hali district, 52.9 percent in Razgrad district, 40.3 percent in Targovishte district,
38.1 percent in Silistra district, and 37.1 percent in Shoumen district).
14
Horváth, Gyula: The Regional Effects of Transition in Two Countries of Different Endowments.
In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 7–19. p. Discussion Papers. Special
Figure 1
Population of eligible areas by regions
Key: 1 Underdeveloped areas; 2 Other eligible areas.
—
-
15
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In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 7–19. p. Discussion Papers. Special
The institutionalisation of the regional policies
One characteristic feature of the first post-communist democratic governments of
East Central Europe was that they largely ignored the dramatic processes of the
territorial restructuring of the economy. Only Hungary was an exception, where,
after the 1990 democratic elections, the Ministry of the Environment and Regional
Development was set up and a government scheme was prepared with a view to the
restructuring of the heavy industrial areas then undergoing a severe and acute cri-
sis. Yet, the government did not have a coherent regional strategy for the whole
country; neither was the former regional development fund reshaped to meet the
new development objectives; instead, it was abolished. The political elite did not
recognize what regional development was all about; many identified it as a tool of
the previous planned economy and considered it as a relics of communist-type eco-
nomic planning.
The first government to undertake the establishment of the system of objectives,
tools and institutions of regional development was the one that assumed office in
1994. The first element of their regional policy package was the passing of the re-
gional development act in 1996. Despite innumerable compromises, this act suc-
cessfully combined several decades of Hungarian regional development traditions
with the rules of the structural and cohesion policies of the European Union. The
Hungarian act also served as an example for the legislations of the other Eastern
and Central European candidate countries (Horvcith 1998). The regional develop-
ment institutions were formed, the central, county and regional level regional de-
velopment councils were set up, and the regional development fund was reorgan-
ised. The regional development act was too cautious, however, about institutional-
ising the regions. At first, it did not even include a definition of the development
and planning regions; instead, the counties could organise voluntary regional asso-
ciations to co-ordinate their common development tasks. The compulsory estab-
lishment of the seven regional development councils was ordered in the 1999
amendment of the act. For political reasons, however, the new government severely
violated the partnership principle of the regional councils, terminated the repre-
sentation of the regional chambers of commerce and industry in the councils, low-
ered the number of representatives delegated by the small areas, and by increasing
the number of representatives from the ministries, it clearly subjected the councils
to the central government. This was an obvious violation of the principle of decen-
tralisation. In 1998, the Hungarian parliament passed a resolution on the National
Regional Development Concept, and in 2001, the chapter on regional priorities of
the National Development Plan was completed.
The new government, assuming office in 2002, pledged in its programme to re-
store the norms of the European Union in the regional development act, to set up
the necessary decentralised institutions, to organise the regional local governments
and to reform the regional budgets.
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In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 7–19. p. Discussion Papers. Special
The Bulgarian National Assembly passed the regional development act in 1999.
The structure and content of the Bulgarian and the Hungarian acts have a lot in
common. The operation of the regional institutions is built upon the same princi-
ples in both countries. However, a significant difference is that no development
councils have been established in the Bulgarian counties, and that the sphere and
amount of regional development resources there are more scarce and more limited.
The establishment of regions proved to be an easier task in Bulgaria, perhaps be-
cause territorial local governments there lack a history of traditions and because a
territorial administrative reform was carried out parallel with the establishment of
the new meso-regions. It is to be noted, however, that in spite of all this, the estab-
lishment of regions involved a certain degree of hesitation and uncertainty. It is for
a reason that the government decree on regions highlights that the regions can only
function to achieve the basic objective of their creation, that is, to facilitate regional
development, and that their number and territorial boundaries cannot be modified
within the time frame of the National Regional Development Plan (Geshev 2001).
The most important document of this framework act is the National Regional De-
velopment Plan, which identifies the regional priorities until 2006.
Regional policy copes with countless problems in both countries. Shortcomings
are also regularly spelled out by the European Commission. The reports evaluating
the progress made by candidate countries contain innumerable critical comments
(Bulgaria 2000, Hungary 2000). The reports over the past few years have made the
following comments on Bulgaria:
— The relationship between the territorial administrative units and the planning
and statistical regions is not clearly defined;
— Inter-ministerial co-ordination is weak, administrative capacities available
for the operation of regional development are insufficient;
— The tasks and scope of authority of the regional level are not clearly defined;
— Regional development can draw on extremely limited budget resources;
there are no independent regional budget provisions; and the conditions of
mid-term co-financing have not been ensured;
— Available regional statistical data is poor.
Though more developed in formulation, and to some extent also in content,
Hungarian regional policy also has a lot to improve; the European Commission
listed the following shortcomings:
— Despite good preparations, little headway has been made in the operation of
the institutions capable of receiving structural funds;
— The county and regional level development councils still do not operate
smoothly; 8-to-10-strong regional development agencies are considered a
significant improvement of the administrative capacities of the regions;
— The financing of regional development requires reviewing. The distribution
of tasks among the ministries has to be clarified, and the mechanisms for the
co-ordination of the various sectoral resources have to be worked out. The
lack of co-ordination and insufficient staff and finances greatly hinder the
preparation of plans.
17
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In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 7–19. p. Discussion Papers. Special
The conclusions of the comparison
Bulgaria and Hungary are two small or medium-sized countries of Europe. Their
regional inequalities are rooted in their belated industrial development and in the
delay their urbanisation processes suffered compared to Western Europe. Their
forty years of planned economy could not significantly reduce either their deficien-
cies in economic potential, or the reasons underlying their territorial inequalities.
At the expense of considerable social costs, the economic and social inequalities
among the regions were somewhat reduced during the two decades of socialist re-
gimes. In the early 80s, it became clear that this process did not guarantee sustain-
able development. Policies based on the same ideological rudiments, however,
went together with different practices in the two countries. The pragmatism of
Hungarian regional development, also thanks to intensive co-operation with West-
ern European professional circles, applied a number of arrangements for develop-
ment not permitted elsewhere in Eastern Europe. The fact that these attempts had
only partial results is explained by the prevailing political system, which worked
heavily against economic reforms. To some extent, post-communist regional de-
velopment in Hungary could rely on nearly two decades of antecedents. As a con-
sequence, well-coordinated professional planning commenced in Hungary as early
as at the very beginning of the 1990s, even before Hungary signed the - agreement to
become a candidate country, with a view to design an up-to-date system for re-
gional policy.
Almost all elements of the system of objectives, tools and institutions of re-
gional development struck root in Hungary for the first time in Eastern Europe.
Bulgaria, where in the socialist period the territorial location of economic produc-
tion followed the soviet model, undertook to introduce certain elements of the
modern European regional policy only later. In these changes, the conditions re-
quired by the European Commission were more motivating than internal economic
and social needs.
Despite the numerous similarities in the changes that have taken place in the ter-
ritorial structures of the two countries, the differences in the responses Bulgaria
and Hungary gave to the challenges of regional development and the varied results
of their development efforts demonstrate that the "Eastern European Bloc" is at
least as heterogeneous as the European Union. This is a fact which the structural
policy reforms of the Union have to take into account.
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In: Regional Challenges of the Transition in Bulgaria and Hungary. Pécs: Centre for Regional Studies,
2002. 7–19. p. Discussion Papers. Special
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