Assessing Hungarian territorial development institutions

Abstract

In the post-2020 period, the European Commission will continue to focus on the challenges of the knowledge-based economy while maintaining a strong territorial approach and increasing synergy and coordination ofthe relevant sectoral financial resources and policies. The question is whether Member States are ready to face challenges such as globalisation, the digital revolution, economic governance, demographic change and social cohesion.

Although Hungary has played a pioneering role in Central and Eastern Europe in creating the legal and institutional framework for territorial development, the current EU budget period 2014–2020 is the first in which the Hungarian regional development agencies (RDAs) are no longer operational due to a 2012 legislative act. The closure of these institutions left room for other organisations with a similar mandate, operating at both central and territorial level.

There are doubts as to whether the capacity building of these institutions, given their reassigned tasks, is able to keep pace with the ever-changing global processes with a direct impact on competitiveness. Although regional development agencies have been an essential instrument of territorial development policy over the last seven decades, the paradigm shift in European regional policy calls into question the usefulness of its traditional instruments.

The main objective of this study is to examine the constantly changing environment and its impact on the RDAs of developed countries in order to define their development and adaptation potential through desk research and interviews. This study seeks to highlight the historical adaptation of territorial development institutions and points out that in a knowledge-based economy, governments are only able to increase competitiveness if they have institutions that enable adaptability and knowledge transfer.

With such research, the author wishes to underline the need to adapt the expectations and evaluation criteria for Hungarian territorial development institutions to the requirements of the knowledge-based economy. The fulfilment of purely operational development tasks by a quasi-autonomous organisation with a multitude of means is no longer adequate. In addition to increasing synergies between the sectors, the ability to collect, process and exchange information with local authorities seems to be indispensable also for the current territorial development institutions. In order to develop these capabilities, a clearly defined criteria grid is needed, which can not only contribute to the objective evaluation of the current Hungarian institutions, but also provide the basis for an international comparison.