Transforming Major Social Systems: Local Governments
Few would dispute that the major systems shaping the everyday well-being of Hungarian society — pensions, healthcare and education — need to be modernised. Yet reforming them is difficult. It costs money, challenges established interests and often produces political risks in the short term. Governments tend to think in electoral cycles, while citizens generally prefer predictability and are understandably reluctant to support changes if they fear they might end up on the losing side.
Local government is no exception. The current system does not always bring decision-making close enough to the geographical communities most directly affected by those decisions. The division of responsibilities between the state and municipalities remains unresolved in many areas.
Across Europe, local government systems differ considerably. There is no single model that could simply be adopted everywhere. The institutional structure reflects each country’s history, political traditions, administrative culture and economic circumstances. What works well in one country may be unsuitable in another.
In Hungary, the capacity of municipalities to perform their responsibilities varies enormously. Small villages often lack the financial and human resources needed to maintain a full range of local services. At the other end of the scale, even county seats can face declining populations and shrinking local economies. Budapest presents a different challenge: its fragmented administrative structure, with 23 districts, often makes it difficult to manage issues that extend beyond district boundaries.
Municipalities should not merely administer public services. They should also help build local communities and strengthen local identity. Local patriotism is not simply an attachment to a place; it also means that residents take responsibility for their surroundings and participate in shaping the future of their community. This requires more than relying on transfers from the central budget.
Over time, however, local governments have increasingly become arenas for party-political competition. I believe this weakens their ability to represent the specific interests of local communities. One possible way forward would be to require candidates for local office to have lived in the municipality for at least five years. Local councils could operate without party caucuses, relying instead on professional working groups dealing with areas such as environmental protection, economic development and social affairs. A similar approach could also be considered at parliamentary level.
Municipalities should not necessarily operate according to one uniform model. Their responsibilities and degree of autonomy could be adapted to their size, economic strength and ability to provide public services.
Small municipalities with limited resources could retain responsibility for cultural and community activities, environmental matters and local consultation. The state would ensure the provision of essential services such as healthcare, education and public administration. Mayors and local councillors could serve in an honorary or modestly compensated capacity, while government offices would coordinate state responsibilities, making use of local facilities and resources where appropriate.
A different approach may be needed in towns experiencing population decline and economic contraction. Their institutions and services should be adjusted to the needs of a changing population. Resources released through this process could be redirected to other local needs. Government offices could organise and finance certain public services, with local councils retaining a consultative and approving role.
Municipalities with stronger economic and administrative capacities should enjoy full autonomy. They could take on a broader range of responsibilities currently performed by the state and receive predictable, formula-based funding in return. At the same time, the proportion of municipal revenue spent on administration should be limited, ensuring that public money is directed primarily towards services and development rather than maintaining the institutional apparatus itself.
Budapest deserves particular attention. The capital’s current structure was established in 1950, when a number of previously independent settlements — including Kispest, Újpest and Pestszentlőrinc — became part of Greater Budapest. Their distinct identities have survived, and this is understandable. Yet the everyday functioning of a large city cannot be organised entirely along district boundaries. Main roads, public transport, water services and many other essential systems extend across the whole urban area.
Vienna offers an interesting example of how a large city can combine a central administration with district-level representation. It also has 23 districts, but their responsibilities are more limited. Districts have their own budgets and can make decisions on certain local matters, such as public spaces and smaller development projects, while strategic infrastructure and major city services remain under central city control. District representatives can also make proposals and communicate local needs to the city administration.
The Hungarian local government system is difficult to operate in its current form, and it may also generate unnecessary costs. In many places, municipalities function primarily as administrative offices rather than as institutions capable of organising and strengthening local communities.
Perhaps this is the central question we should be asking when considering reform: what should local government actually be for? Its purpose should not be limited to administering local affairs. It should also give local communities the autonomy, responsibility and ability to act in shaping their own future.
By: Viktor Szentkiralyi
English translation: Galatea – an LLM-based digital assistant.