Regional development and institutions in Hungary: past,present and future development

The author investigates what the transition from planned to market economy implies for regional development in Hungary. The focus is the role of institutional change to economic development of the regions. After 1989, new regional and local institutions were created, supported by the Poland and Hungary Action for Researching the Economy programme. The old three‐level regional administration was redefined, but resources are few and competences unclear. The new institutions’ ‘bottom‐up’ approach and their business‐orientation seem to match the conditions of the prosperous west, while they meet considerable difficulties in the depressed east. Alternatively, coordinated government action and cooperation between enterprises and administrators may represent a key to development.