- Funding Programme
- Year
- 2022
Local government public finance development and municipal capacity building in Hungary
The European Commission aimed to support strengthening the administrative and financial capacity of the municipalities in Hungary, by assisting the Hungarian authorities to improve the institutional framework related to the good democratic governance of municipalities and the awareness, knowledge and skills of relevant authorities on good democratic governance.
Context
Hungary's local government system was set up in 1990 after a regime change, resulting in a fragmented self-governance and financing structure that has seen several reforms. As financial reserves ran out, system's capacity to deliver gradually weakened despite local ingenuity and the mobilization of local resources. Financial difficulties also create additional problems in ensuring quality of service and in recruiting and retaining adequate human resources. Additionally, local governments faced administrative challenges, needing to report to many systems that weren’t connected, which limited the ability to make data-driven decisions.
Support delivered
The support involved functional mapping and capacity building for local authorities in Hungary. Key activities included developing policy advice to enhance fiscal autonomy, implementing a Local Finance Benchmarking (LFB) Tool, and creating a comprehensive improvement plan for financial management. Additionally, initiatives to bolster capacity building focused on applying performance measurement indicators for municipal services.
Results achieved
The project delivered policy and legislative recommendations to align Hungary's local governance with European standards. Benefits include improved financial management and increased fiscal autonomy for municipalities. By strengthening local authorities' capacities and utilizing benchmarking tools, the project sets an example for enhancing service delivery across Hungary, contributing to systemic improvements in local governance.
More about the project
You can read the documents related to the project here: