Can the Growth Rate of Regional Disparities Be Halted?

Contributions to the Rethinking of Hungary’s Regional Policy

György Kocziszky
PhD in Economics, University Professor, Institute Director, Dean, Faculty of Economics, University of Miskolc
Published in: Public Finance Quarterly 2011/3 (p. 320-330.)

SUMMARY: Regional disparities have increased in Hungary over the course of the last two decades, despite the declared intentions of the government as well as domestic and foreign capital injections. Even our EU membership has not brought a substantial change in this respect. A social and economic divergence began instead of convergence between the centre and periphery; the resulting differences have become salient. That raises the question: can this process be halted, is there any chance for the lagging and depressed regions to undergo a real convergence? The answer is clear; it is hardly possible without the evolution of regional policy. Namely, it is increasingly difficult to create a macroeconomic equilibrium while such a large regional disequilibrium exists. The fiscal practice of the past eight years should be broken away from, and an integrative and complex regional policy (aiming at creating individual equilibrium paths for the regions) is necessary instead of a virtual one.

KEYWORDS: regional policy, convergence, disparities, centre and periphery



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