Regional Investment Promotion in Hungary

Abstract

The paper is based on the results of field investigations carried out at various representatives of the decentralized institutions of regional development. It seeks to discover the real leve] of decentralization, the functioning and the limits of the newly created institutions, as well as the way, how EU-principles of programming and decentralization are put into practice. The conclusions of the paper are the following:

1. The decentralization of regional development is still rather formai.
2. Instead of strategic development, County Development Councils play a pure administrative role.
3. Regional development is almost as fragmented as the Hungarian settlement structure: although the elaborated county development programs are complex, including objectives like human resource development, regional cohesion, investment promotion etc. the concrete projects that are supported mostly target the internal infrastructure of individual settlements: i.e. settlement development, instead of regional development.
4. The centralization efforts of the government prevent locally operating multinationals from becoming more committed in their region' s development.
5. Investment promotion is too strictly tied to job creation, which may bias against technological upgrading.
6. The bureaucratic decision-making of PHARE strip the credibility also from the Hungarian institutions.