Crisis, institutional change and peripheral industrialization: Municipal-central state relations and changing dependencies in three old industrial towns of Hungary

This paper aims to discuss radical changes, institutional responses and their socio-spatial consequences by focusing on reorganisation of institutional settings of local economic development after the global financial crisis (2008). We focus on the complexity of institutional change and social relations driving those in three old industrial towns (Dunaujv ' aros, Martfu and Tatabanya in Hungary) that faced a functional, cognitive and political lock-in in the 1990s, and emerged as spaces of encounter of global production networks, governmental development policies and local society in the 2000s. This entailed a complex and dynamic assembly of various interests and strategies, providing a scope for local institutional experimentations that were interrupted by the global crisis and the resulting macro-structural changes. We place municipal agency, its uneasy, contested and changing relation to the central state in the focus. We discuss how the introduction of a new regulative system and institutional-spatial hierarchies in Hungary after the 2008 crisis enhanced central state power, and how that was mobilized to develop a new regime in which communities were losing control over their resources, and local assets were being channelled in peripheral industrialization orchestrated by the central government. Discussing municipal agency in a strategic-relational approach allows us to highlight the depth and multiple consequences of the crisis locally beyond market relations, giving an insight in the spatial rearrangement of power in relation to peripheral industrialization.