Central and Local Conditions of Municipal Policy in Crisis

Abstract

Over the past decade, local governments in Hungary have experienced and are currently experiencing at least two  exogenous crises of external origin. These are different in  nature: for more than a decade, the 2008–2009 global  economic and financial crisis and its exposure to the  harmful turbulences of the global economy (for example, municipal foreign currency debt; narrowing fiscal room for manoeuvre and deteriorating public finances) during a  coronavirus pandemic, crises caused directly by health  emergencies and, indirectly, by crises caused by the economic downturn posed a systemic, paradigmatic  challenge for local authorities. We examine the effects of  central (parliamentary, governmental) legislation on the  local government sector during the two crises along the  lines of concepts used by the international literature on  policy change and policy problem and policy crisis. An  important analytical dimension of our study is that  decisions made by the central decision-making level in a  crisis situation (for example, legislation; local government  funding; government decrees issued under a special legal  order) may not only open up problems but also open new  ‘conflict containers’.