The Changing Role of Local Governments: From Public Administration to Economic Development Management

Abstract

In recent years, the roles of local governments have changed significantly due to changes in the regulatory environment and in the scope of public service duties fulfilled at a local level. The result is that today we have to think differently about local governments than we did before. This change can be illustrated through fiscal data as well as regulatory provisions. As the previous role of local governments in maintaining institutions has significantly decreased, they try to find challenges in other tasks, such as local economic development. This paper analyses the background and the steps of this change process, revealing what this new role might mean for local governments. Building on an examination of the budget data of recent years and local practices, it might be concluded that more and more resources are being spent on local economic development. Thus, I will review the process of reducing the role of local governments in the maintenance of institutions, then examine the concept of local economic development and its integration into the Hungarian system. The inclusion and interpretation of relevant EU data aims to facilitate international comparisons of the processes under review, drawing particular attention to (uniquely) Hungarian experiences.