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.