Discussion Papers 1990. No. 9.
New Basis for Regional and Urban Policies in East-Central Europe
CENTRE FOR REGIONAL STUDIES
OF HUNGARIAN ACADEMY Or SCIENCES
DISCUSSION PAPERS
No. 9
New Basis for Regional and Urban
Policies in East-Central Europe
by
ENYEDI, Gyorgy
Series editor: HRUBI, Laszlo
Pecs
1990
Discussion Papers 1990. No. 9.
New Basis for Regional and Urban Policies in East-Central Europe
CONTENTS
Introduction
p. 1
Characteristics of Regional Policies
p. 2
Phases of Postwar Regional Policies in East-Central Europe
p. 4
New Trends in Urban and Regional Development and Policies
p. 10
Conclusions
p. 14
Notes
p. 22
Bibliography
P. 24
Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe.
Pécs: Centre for Regional Studies, 1990. 27. p.
Discussion Papers, No. 9.
.INTRODUCTION
Regional and urban policies have hitherto played a subordinated role in East-
Central European development. Regional planning was integrated within a strongly
centralized planning system. Regional development targets, e.g. industrial
deconcentration, were formulated according to sectorial interests rather than local
(regional) interests or desires. In the strongly centralized political power system there
was no room for regionalism or local initiatives. Official ideology declared the
homogenization of society; thus, the homogenization of needs for housing and urban
services. Consequently, urban planning has applied national standards everywhere.
The omnipotent party state assumed the responsibility for all aspects of urban
development.
East-Central European countries had adopted the Soviet model of urban and
regional development by the late-1940's. In this paper I intend to summarize the 40-
year history of urban and regional development. It could be stated that the repeated
efforts to reform the Stalinist economic model did not really touch the spheres of
regional planning. The governing Marxist parties expected to modify the mechanism
of economic management without changing the political model. Reforms in regional
development would have made it necessary to accept the influence of local
government which did not fit into the policy of centralism.
Centralized development policies were supported by the nature of economic
processes. Industrial take-off needed concentrated investment efforts, especially in
the given industrial structure. (Postwar industrial take-off started with energetics and
heavy industry.) In this simple structure central planning directives were more
convenient to apply than in a more sophisticated industry. Planning authorities were
able to define their targets in natural units, i.e. in tons of output; thus, the lack of
market and a real price system were not very disturbing. In the early-1950's the
technics of a war economy were used in managing East-European economy. 1 Heavy
investments plus abundant Soviet raw material shipments contributed to a rapid
industrial growth at that time. However, the resources for this type of development
were soon exhausted. Since the 1960's East-Central European countries have
formulated two types of responses for developing more complex, more modern
economies. One group of these countries (GDR, Czechoslovalda, Albania, Rumania,
Bulgaria) decided to improve the central planning system by introducing new
planning methods, new sectorial organization, etc. Another group (Hungary, Poland,
Yugoslavia) decided to introduce substantial reforms in economic management.
(Czechoslovakia was among the pioneers of economic reforms until the 1968 Soviet,
intervention.) 2
By the end of 1989 rapid political changes radically transformed the political
scene. Currently, remains in only two East-Central European countries the one-party
1
Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe.
Pécs: Centre for Regional Studies, 1990. 27. p.
Discussion Papers, No. 9.
Communist system: Albania and Yugoslavia. But I assume the diverging experiences
of the last two decades will strongly influence further political and economi ∎
development in the whole region.
The introduction of market elements into the state socialist system without
changes in the key elements of the Stalinist political model has met with failure. The
state socialist system is in crisis. In the "reform countries" there is an almost general
consensus — also held by the Communist parties — for replacing the Stalinist political
model with a new one. The decades of economic reforms despite all the failures were
useful as a learning period during which knowledge was gained about
entrepreneurship and successful methods to form interest groups. Thus, the
populations of Poland, Hungary, Czechoslovakia and Yugoslavia are ready for change
and perhaps they can handle a peaceful transition into a new social model . 3
The comprehensive changes that have just started in the East-Central
European societies have impacted upon their regional and urban development and
settlement policies. In this paper I intend, first, to characterize the principles of
regional/urban policies of the Stalinist model, second, to analyze the applications and
changes of these policies during the last 30 years, third, to discuss the impact of recent
political and economic reforms upon the processes of regional and urban
development.
CHARACTERISTICS OF REGIONAL POLICIES
Regional policies in both market and centrally planned economies have many
similar goals. Generally, regional policies aim to level out disparities. The scale of
these disparities differs from country to country. In most cases income disparities,
uneven access to public services (mostly to health care and education) and disparities
in the economic activity are the most sensitive inequalities. In market economies these
disparities are due to the imbalance among resources and market accessibility of
particular regions. In state socialism bureaucratic redistribution of national wealth (in
favour of politically strong sectors) creates new types of disparities.
In market economies regional policies were focused on backward areas or on
handicapped social groups of backward areas. Governments used budget
redistribution techniques in favour of these areas in order to' improve the business
climate of these areas by direct investments in the infrastructure and by financial
incentives for private and corporate investments. Since the mid-1970's government-led
regional policies have diminished as welfare state concepts and practices have been
eroded in Western industrial societies. The economic crisis of the 1970's strengthened
regional solidarity, facilitating the emergence of local, bottom-up regional
development schemes and policies.
Three special features of regional policy and planning are evident.
2
Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe.
Pécs: Centre for Regional Studies, 1990. 27. p.
Discussion Papers, No. 9.
(1) Regional plans extend to all aspects of socio-economic life from production
to public services. For a long time production goals were the top priority because it
was assumed that industrial growth would automatically lead to the improvement of
living conditions. Because the bulk of the economy was nationalized (some 40 years
ago), governments can intervene directly into the economic sphere. Collective
ownership is dominant in the service sector, too; thus, public services also include
retail trade, catering or leisure time activities.
Central planning has a sectorial character. Consequently, location of industrial
investments or infrastructural development is decided by sectorial ministries
according to sectorial interests. Regional planning authorities have but limited power
for influencing the geography of sectorial decisions. Regional and urban development
has, to a large extent, been a haphazard outcome of territorial coincidence of sectorial
decisions. Sectorial interests preferred developed areas where local resources were
more abundant and the infrastructure had a good standard. Regional policies based
on sectorial decisions were insufficient to achieve their egalitarian goals. What is
more, sometimes they contributed to the deepening of disparities.
(2) Regional plans encompass all regions of a socialist country and provide a
framework for regional distribution of national (comprehensive) planning targets and
development funds. All types of economic and tertiary development had to be
controlled by central authorities. Large cities and prosperous regions are also
financed from central budget. They have acquired a much more advantageous
position than less developed areas in receiving government subsidies. Contrasted with
poor rural provinces their already existing industry has attracted further investments
from industrial ministries. They have had closer contacts with political power centres.
Communist governments supposed to fmd the basis of their power in large cities and
in industrial regions dominated by large state enterprises. 4 Again, despite their
declared egalitarian goals government regional policies have continuously neglected
less developed rural areas.
(3) Regional development — in most socialist countries — is centrally designed.
Central decisions are channelled to local levels through government agencies and
public administration. Local initiatives, therefore, have a rather limited impact upon
plans. In the "classical" Stalinist model the use of central budget subsidies was
prescribed as the sum to be spent for the maintenance of government housing units in
a certain county or district and the number of new government housing units to be
built. How did central planning authorities define the needs of the population in a
given region? Evidently, they lacked the means to assess local needs or interests.
Consequently, planners used national norms and standards for regional infrastructural
developments. These norms, e.g. shop floor space for 100,000 inhabitants, apartment
size for a family etc., were calculated arbitrarily without local input. Furthermore, the
availability of funds has had greater impact upon these calculations than the needs of
the population. This approach was ideologically supported by egalitarianism and by
the hypothesis that socialist society is becoming more and more homogeneous.
3
Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe.
Pécs: Centre for Regional Studies, 1990. 27. p.
Discussion Papers, No. 9.
A strong bargaining process exists behind the formal redistribution of the
central budget. In this bargaining process local authorities try to express their
interests (which do not necessarily coincide with the interests of the local population).
While local governments have no power they do have political influence and try to
find supporters among highly ranked party officials. Here again, urban-industrial
regions have an advantage. Capital cities (the only political power centres) and
regions of mining and heavy industry have continuously been able to enjoy an
advantageous position in the budget redistribution.
Paradoxically, government-led regional and urban policies have had
differentiating effects in state socialism. Backward areas or settlements have improved
their position by the hidden market mechanisms of the second economy in areas of
family income, housing and services.
PHASES OF POSTWAR REGIONAL POLICIES IN EAST-CENTRAL EUROPE
Different stages of postwar economic development have been characterized by
distinct regional and urban policies. Phase I was the urban explosion pushed
unilaterally by industrial take-off. It resulted — in most countries — in a regionally
polarized development. Phase II has been characterized by deconcentrated industrial
location, first attempts at economic reforms and the formation of a modern urban
network. Phase III means — at least in the more developed northern part of East-
Central Europe — the beginning of a post-industrial era marked by attempts in
regional equalization of living conditions, steps toward a "unified settlement system"
(i.e. rural/urban continuum) and introduction of new concepts in urban and regional
strategies.
Phase I was characterized by a rapid industrial take-off combined with the
reparation of damages caused by World War II in the whole region. Czechoslovakia
(more precisely the Czech and Moravian regions) and what is now the GDR were
industrialized countries before the war. Their postwar industrial expansion meant
mostly structural changes in favour of heavy industry. Poland and Hungary had a large
rural sector as well as a few important, rather isolated centres. Their industries were
weak and unevenly developed. Finally, in the Balkan countries where 50 years ago
agriculture was the main trade and 80 percent of the population lived in rural areas,
the postwar ("socialist") industrialization was actually an industrial revolution. In most
of the East-Central European region economic modernization was intertwined by the
introduction of state socialism system which resulted in a lot of misunderstandings for
superficial students of the area. In the official propaganda all the advances of
modernization — from rural electrification to the expansion of education — are treated
as achievements of socialism. Western viewers are often puzzled by common features
of the Western and Eastern European modernization and speak about the
convergency of the two systems. I shall discuss it later.
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Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe.
Pécs: Centre for Regional Studies, 1990. 27. p.
Discussion Papers, No. 9.
This industrial take-off differed from the earlier West-European (or from the
more or less parallel South-European) one in many respects. Immediately after the
communist take-over the non-agricultural sector of the economy passed almost
completely into state ownership. Then, at the same time, comprehensive planning was
introduced. East-Central European leadership adopted the Soviet economic model
totally including the priority of heavy industry and a strongly centralized economic
management system. Central planning authorities laid down detailed directives to
enterprises. During the 1950's and 1960's industrial growth was exceptionally fast.
Low consumption, diverted agricultural profit, the over-utilization of the already
existing infrastructure have been the sources for industrial investments. In Bulgaria
and Rumania rapid growth continued even during the 1970's.
Another important change was the introduction of the Soviet (Council) system
into the public administration that replaced earlier local authorities. Self-governments
as well as voluntary organizations of citizens were practically abolished, although
elected local and regional councils were merely empowered to convey central
government will to the local level. Party organizations are parallely organized. The
party can control directly the Soviets. In Rumania (and in the USSR) local and
regional party and administrative units are headed by the same persons. Yugoslavia is
an exception where the communities are self-governing units but — according to some
experts — government dirigism exists in many informal ways. In this strongly
centralized planning and political system there was no room for regional planning. As
the countries of the region inherited important territorial inequalities from the pre-
war period, first national plans formulated some regional targets but there was neither
an organization nor a decision-making apparatus for regional development. Low-level
industrialization was of the reasons for uneven territorial development: the existing
industry was concentrated on the mining areas and on a few selected cities. In the
case of Hungary manufacturing industry was excessively concentrated in the capital
city, Bu Ipest. This single city employed 60 percent of the total industrial workforce
in 1930. Other inequalities originated from the substantial border changes after both
World Wars, e.g. Yugoslavia was created in 1920 from extremely different pieces of
lands. Slovakia lagged far behind the industrialized Czech lands. After World War II
Poland lost large areas in the East and gained huge, earlier German lands in the
West. New states intended to integrate their territory economically and to interrelate
their cities into an urban network. This way, the political power initiated industrial
location in backward areas and speeded up the completion of national infrastructural
networks.
During this industrial take-off industrialized areas — and the urban network of
these areas — expanded. This urban growth was led by industrialization: expanding
industrial centres added new residential quarters to existing housing developments. In
a few cases entirely new towns were created following the Soviet example. New towns
created a possibility for experimenting with "socialist urbanism". Contrary to the
Soviet Union where new towns were built on virgin lands making their industrial
development necessary, these East-Central European cities served largely ideological
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Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe.
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Discussion Papers, No. 9.
purposes. Nowa Huta (in Poland) founded in 1950 together with a steel complex, was
incorporated into the nearby city of Cracow thereby introducing the working class
into this intellectual and trade centre. In Hungary all the new towns but Dunatijvaros
were built as "twin cities" of an earlier urban centre.
At the same time, the first wave of postwar industrialization further sharpened
differences between industrialized and rural regions. Heavy industry had a
concentrated locational tendency, hence, most of the rural areas remained untouched
by industrialization. Manpower migrated from the overpopulated rural areas to the
larger cities and to the freshly industrialized zones. This was normal: industrial take-
off has always been regionally polarizing. The polarization was strengthened by the
fact that industrialization was carried out by large state-owned enterprises, and there
was no possibility for small private business to participate in this process.
Rapid growth in GNP did not result in a remarkable improvement in the
standard of living. Massive oppressive measures were taken against rural population
for diverting profits from farming to industrialization. (At the same time, rural
population made up the majority of the region's population.) Industrial investments
had a low return while the growth of GNP was absorbed by government subsidies for
inefficient state industry and by armament expenditures. There was no opportunity to
implement the usual regional planning targets of welfare character by regional
levelling.
Phase II started in the late 1950's, early 1960's. Basic industrialization was over.
Rapid industrialization continued in the Balkans, but even there, industry became
more diversified with a growing importance of machinery and consumer goods. These
industrial sectors had a more elastic locational pattern than heavy industry. At the
beginning of this period when (with the exception of Poland and Yugoslavia) the
collectivization of agriculture was completed collective ownership of the means of
production became dominant. The collectivization attracted more investments — and
more political attention — to the rural areas. Governments intended to clipanel rural
outmigration to smaller local and regional centres, as earlier larger urban centres —
partly because of the neglect of infrastructure — became overpopulated. In sum, there
was a possibility and a need for geographically decentralized regional development.
By the late 1950's the first comprehensive regional and urban strategies were
formulated in East-Central Europe. These strategies were interesting mixtures of
Marxist dogmas and Western European planned urbanism. Policy makers still
supposed that economic growth would automatically result in the improvement of
living conditions; hence, industrial decentralization has been the key element of
regional development strategies. On the other hand, a number of elements of Western
European (mostly French) regional planning ideas were incorporated into regional
policies. For instance, new regional centres were designated as "counterpoles"
obtaining priority in industrial location and urban development. In Hungary five
regional centres had to counterbalance the overwhelming economic role of Budapest.
In this way Boudeville's well-known growth pole theory was applied but its results
were as doubtful as in many other countries. Growth centres have frequently
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Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe.
Pécs: Centre for Regional Studies, 1990. 27. p.
Discussion Papers, No. 9.
developed at the expense of their regions sharpening small-scale regional imbalances.
"Centralized decentralization" was the slogan: government intended to create strong
economic centres in less developed regions first. Growth was stimulated mostly by
direct government investments in local industry since infrastructure usually was
neglected. (Industrial investment portfolios usually contained some additional housing
and public investments, too.)
Modern industry was located in a number of provincial cities (actually in more
cities than it was planned originally), and, at that time, industry was the major element
in urban development. Industrial decentralization contributed to the formation of a
modern urban system, helped to level out employment among different regions and
diminished interregional migration. This decentralization meant the new geography of
economic activity by no means the deconcentration of power. Although a number of
changes were introduced in the 1960's, many elements — and the principles! — of
rigidly centralized planning survived. Due to central locational decisions the
provincial cities received certain new investments from state budget but local
(regional) authorities had neither the opportunity for nor the interest in the most
efficient utilization of local resources or in the coordination of different sectorial
decisions.
By the end of 1960's the extensive industrialization was getting close to its end
in the more developed "Northern" countries (GDR, Czechoslovakia, Hungary and
Poland). Low capital efficiency, the outmoded industrial structure, chronic shortages,
technological backwardness and the deteriorating infrastructure seriously disturbed
the postwar modernization process. These problems were less explicit in Bulgaria and
Rumania where industrial take-off was still going on, based largely on the abundant
Manpower resources which left agriculture. The hope of "catching up with the West"
(a millennium-old ambition in East-Central Europe) faded away. The need for
substantial transformation of economic management system was urged by experts, and
it was more or less accepted by ruling Communist parties, too. Different forms of
economic reforms were introduced in these countries which diminished the role of
central planning directives. The Czechoslovakian and Hungarian reforms were the
more substantial. As it was well-known, the Czechoslovakian reform was short-lived as
a consequence of the Warsaw Pact invasion of the country in 1968.
None of these reforms dared to touch the power structure of the party state.
They contained certain decentralization measures in regional development but it
meant simply a new distribution of decisions and responsibilities within the
governmental structure. Basic administrative units, mostly in Poland and Hungary, got
more freedom in using government funds and subsidies than in earlier days. In 1971,
the Hungarian Parliament passed a new Law on Councils which — quite differently
from the Soviet legislation — declared that local councils are the "organizations of self-
government" and the expression of "local interests". In principle, the acceptance of the
existence of local interests by a centralized Communist government had great
importance, but in practice, the centralization in regional development did not
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change. "Self-government" is not acceptable by a strongly centralized totalitarian
regime.
In the 1970's economic growth continued. More and more industry moved into
the rural areas in search of cheap manpower. As a consequence of industrial
decentralization a sizeable urban network developed, even in the Balkans. The
tensions caused by rural/urban dichotomy became more relevant. Economic levelling
in employment and industrialization was not followed by equalization in living
conditions. Industrialization was not accompanied by the improvement of housing
conditions and services. Infrastructural investments have been continuously
postponed. In the 1970's urban and regional strategies were reformulated. Using
different wordings, these strategies aimed at the establishment of an economically and
socially balanced settlement network. In 1971 a Government Resolution on Regional
Planning defined two basic aims for regional policy and planning in Hungary:
"1. It should ensure the efficient use of the resources of different regions and
the modernization and rationalization of the settlement network.
2. By levelling out employment and economy of the different regions, by
equalizing the service and infrastructural supply of different groups of
settlements it should reduce the differences in the standard of living and in
the cultural level of the population of different regions." 5
The 1974 Rumanian Law on "Systematization of the territory and the urban
and rural localities" declared: "Through systematization the development of the towns
and the communes...within the framework of a general national programme will be
assured having in view the entire network of urban and rural localities, their mutual
influence, the correlation and the development of the towns and villages with their
surrounding zone and the extension of the cooperation between localities. Special
attention will be devoted to the rural localities with the aim to gradual increase the
level of living in these localities bringing it closer to that of urban areas."
In Poland the Sixth Party Congress (1971) defined the goals of spatial
development. A National Development Plan was worked out and adopted in 1974 on
this basis. Its principles were as follows:
- a more rapid improvement of living conditions and greater satisfaction in the
variety of social and cultural needs,
the optimal use of economic resources,
a more rapid socialist integration, especially with the neighbouring
countries,
increase in national defense,
protection of natural resources and more effective economy in their use.
All these schemes have common features. They all intend to develop an
integrated settlement system with a proportionally developed urban network and with
a rural/urban continuum. By defining a hierarchy of service centres, planners — often
unintentionally — followed Christaller's central place theory. All these schemes insist
on a "top down" modernization: planners intend to designate the central places of
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Pécs: Centre for Regional Studies, 1990. 27. p.
Discussion Papers, No. 9.
different hierarchical level, the variety of public services and their attraction zones,
etc. Citizens will be made happy by the paternalistic party state.
The second half of the 1970's, as everywhere in the world, was characterized by
a remarkable economic slowing down, even by a stagnation in the industrial sector.
Socialist economies were not able to adapt themselves to the substantial structural
changes which were going on in the world economy. Many of these countries even
refused to accept the idea of adaptation. Nevertheless, they had to experience the
deterioration of their economic situation. This influenced the implementation of their
regional and urban development strategies. Since state industry was able to seize a
growing share from the national budget, infrastructural development and public
services were the main losers. The 1970's were characterized by strong centralization
processes in rural public services. A large part of rural communes were judged "non-
viable" by planners, and their depopulation was backed by the authorities. A new
ideology was born: we had to realize the rural/urban continuum in an efficient way.
We should not disperse our scarce resources among small villages. We should
concentrate them in local centres which would offer a variety of services for rural
people. In Rumania the explanation was rather ideological: the homogenization of the
socialist society, the total abolishment of private farming, the adaptation of the rural
settlement network to the geographical pattern of socialist agro-industrial combines,
etc. In Hungary and Poland, rather, the British "key village" system or the West-
German and Scandinavian rural administrative reforms were quoted. This time "the
developed Western" model had to be followed. In the East-Central European state of
communication system these concentrated service models are disadvantageous for
rural populations and stimulate resettlement to larger centres.
By the end of the 1970's when Phase II ended, many things ended in East-
Central Europe. There was an end of rapid growth, of industrial expansion, of the
stimulus of CMEA cooperation that was earlier based on cheap Soviet raw material
shipments. It was an historical misfortune that East-Central European countries
entered into the post-industrial era in the time of crisis of the world economy. The
credit crisis, the structural crisis — which seriously hit even the most developed market
economies — was combined by a systemic crisis. The recognition and the political
acceptance of the systemic crisis were difficult and were not general in the socialist
countries.
Phase III
the 1980's — has been characterized by important changes along
—
with the development of a great variety of crisis management techniques both in
economic and regional policies. It is of great importance that new socio-political
structures of urban and regional development are emerging.
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Pécs: Centre for Regional Studies, 1990. 27. p.
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NEW TRENDS IN URBAN AND REGIONAL DEVELOPMENT AND
POLICIES
The transition from industrialization to post-industrial society has had an
historical significance in the developed Western countries, too. The well-known
characteristics of post-industrial societies — technological and structural changes in
industry, important declines in agricultural and industrial employment, the expansion
of tertiary and intellectual occupations, the transformation of the social structure,
strong global economic interdependence, etc. — marked the birth of such new social
processes that promoted new trends even created new models in urban and regional
development.
This transition has been painful in socialist countries. Post-industrial
development was pushed by a booming period and a new technological revolution in
Western Europe. These conditions were missing in East-Central Europe. Old and
stable dogmas on the priority of production, on the ruling role of the working class
and the like had to be forgotten. These governments were unable — and unwilling — to
transform the organization and the technology of their economies, or, in the best case,
they tried to modernize the economy keeping the old socio-political structure alive.
There are different answers for the crisis:
- to deny its existence and tighten the control and discipline within the
Stalinist model (GDR, Rumania),
- to modify the model by modest reforms (Bulgaria, Czechoslovakia), or,
- to look for a new paradigm via systematic changes (Hungary, Poland).
Regional policies evidently reflect all these approaches. For instance, Rumania
continues its settlement systematization program which was designated in the early
1970's. But there is no stopping. Elements of post-industrial development, e.g. the
diminishment and social disintegration of the working class are present and despite
the constraints, advancing. New types of spatial processes are developing and even the
authoritarian government cannot forbid them. Regional inequalities started to grow
again as governments were unable to subsidize backward areas. In most of the
socialist countries foreign debts and state industry subsidies forced governments to
withdraw from urban and regional development, e.g. from government housing, but
earlier central redistribution technics had not been replaced by new ones.
There are two fundamental changes in regional development and policies. First,
the role of industry has changed remarkably. As the industrial take-off practically
ended regional development had to be stimulated by other sectors. Tertiary sectors
usually follow the already existing markets, i.e. they tend to be concentrated in larger
cities. It was much easier to relocate industry than office activities to backward areas.
The expanding R + D sector also has a concentrated locational behaviour. There is a
lot of potential for the development of tourist industry in less advanced areas
provided that the infrastructure will be remarkably improved. Industrial restructuring
produces depression areas (an unknown phenomenon during the period of
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Enyedi, György: New Basis for Regional and Urban Policies in East-Central Europe.
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Discussion Papers, No. 9.
means for industrial take-off and rapid modernization, and, finally, it was able to
propel the region into the industrialization period within a few decades. (It was
gained at a high social cost but the market version of rapid modernization in Spain,
Greece or Taiwan had its social costs, too.) During this period the newly generated
forms of urban and regional developments were similar in market-led and in the
centrally planned semi-peripheries. The Stalinist model, however, was depleted and
inadequate when the historical sequence needed a transition from industrial to post-
industrial era. Hence, the parallel of economic and the systemic crises in East-Central
Europe.
(1) After analyzing the principles and theoretical background of the socialist
regional and urban policies, I have the following statement: these policies had no
comprehensive theoretical background and they were based on false assumptions.
These false assumptions were
(a) socialism is a post-capitalist era characterized by the equity of
abundance, 7
(b) socialist society is becoming more and more homogeneous (in reality ,
with the advancement of modernization, the stratification of East-Central
European societies is becoming more and more diversified).
Urban and regional policies have eclectic ideological sources. These are
(a) classical Marxist theories,
(b) utopian urbanistic theories,
(c) political and planning (technocratic) pragmatism.
The latter had the real power often in theoretized form.
Marx and Engels did not develop a comprehensive theory of regional
development and urbanization. This has been done relatively recently by Western
European and Northern-American neo-Marxists. They analyzed social inequalities in
regional development and within the cities of developed capitalist countries using
Marx's reproduction and class struggle theories. Metropolitan segregation in capitalist
countries is a quite visible and evident outcome of social inequalities caused by
market forces and profit-led economies. This explanation, however, did not help to
describe the mechanism of regional and urban inequalities under state socialism (it
was first done by Ivan Szelenyi).
Marxist urban policy is egalitarian at three levels. Within the settlements, this
policy is intended to create non-segregated residential areas with identical
infrastructural supply in every neighbourhood unit. Within the settlement network, the
abolishment of the rural/urban dichotomy is the main egalitarian goal. At regional
level, different settlement types of different regions should reach equal living
standards.
Egalitarianism was not a Marxist invention. In Europe social inequalities have
been decried on moral bases in all of the historical periods by religious beliefs, by
utopian visions or by political ideologies. Socialist urban theories borrowed their
egalitarian view from utopian avant-garde urbanism of the late 19th century. Even in
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modern times egalitarianism has been very strong in the Balkans (where even in 1950,
80 percent of the total population lived in villages). These countries became
independent after 500 years of Turkish occupation in the 19th century only. The
overwhelming majority of the population lived on family farms. There were no large
landed estates, there were no landless rural poor. Early-20th century avant-garde
urbanists — from Ebenezer Howard through Gropius to Le Corbusier — supposed that
urban social problems could be answered by physical planning. In the 1920's these
Western utopian urbanists participated in the formulation of the first Soviet
urbanization theories. This view was repeated later in East-Central Europe when the
new towns (so-called "socialist towns") with their standardized housing and services
were intended to create homogeneous, socialist local society.
It is worthwhile to discuss in some detail how pragmatism was mixed into these
theories.
(a) One of the outcomes of the utopian-pragmatist mix is the idea that regional
and urban plans suppose a continuous development, formulating an ideal
development with minor conflicts which will be solved easily during the development.
But the ideal model has rather modest criteria, e.g. a home telephone is not listed
among basic services. (Evidently, the "ideal" model expressed the ideas of the political
powers and the planners and not those of the population.)
Certainly, we have not yet reached this ideal stage; after all, the building of the
developed socialism has not yet finished. There are a few frequently cited
explanations for the difference between the ideal and real models:
- We have had important successes but we have not yet been able to overcome
the heritage of the capitalist past.
This heritage was poor. Indeed, most of East-Central Europe consisted of
poor rural areas. If we compare the present stage of urban and regional
development to that of 50 years ago the progress is quite remarkable. (The
record is more modest if we compare East-Central European urbanization
to the Southern European one.) This view denies the existence of new types
of conflicts and backwardness which resulted from the socialist
development. Hence, the reluctance to discuss openly such phenomena as
serious environmental deterioration or drug abuse which were not inherited
from the dark past.
Our plans are good but there are imperfections in implementation. This is a
usual tactic to push the responsibility to the "undisciplined" citizens and the
"lazy" low-ranked bureaucrats.
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- We have to implement our plans in an efficient way. Everybody has the right
to a low-rent government apartment but only the large housing complexes
could be built in an efficient way. (Consequently, housing should be
concentrated in large urban centres.) "Efficient" became the synonym for
"big". Efficiency was also achieved through strict central control over local
investments due to fear that local authorities would use the resources
inefficiently. "Efficiency" has been the modern, intellectual explanation for
centralization.
(b) Urban and regional policies in East Central Europe are urban biased. In the
-
redistribution process cities and urban dwellers have had an advantageous position
(despite the basic slogan of "social equalization between towns and villages").
Settlement development policies do not deny that — paraphrasing Orwell's bon mot
—all settlements are equal, but cities are more equal than villages. In the GDR,
agricultural incomes should be lower than non-agricultural ones "according to the
basic laws of socialism." In Rumania, the law for systematization (1974) intends to
develop urban centres in rural areas "to propagate the working class evenly within the
territory of the country." In the Hungarian National Development Concept (1971),
"basic supply" had different criteria in cities and in rural areas even though the
definition of basic supply means a set of services which should be available for all of
the citizens.
Why are regional policies urban biased (which is contradictory to their
egalitarian goals)? There is an ideological explanation: cities are the strongholds of
the working class. Or a more pragmatic one: in our modernization process we should
develop cities first, then we could switch our efforts to rural areas.
The real reasons are as follows:
- Urban growth became a symbol of the postwar industrial take-off and,
generally, the modernization process. As most of the larger cities gained
their importance during the last 40 years, they are the outcome of the
socialist construction while villages symbolize our (shameful) backward
rural past.
- Political centralization favoured large organizations in every sector of socio-
economic life. It was easier for the centre to control the whole society via a
few large organizations. These large organizations have had their
headquarters in large urban centres.
- Large cities have had a strong bargaining position regarding the
redistribution of the central budget.
- The political stability of the power depends largely upon the big cities. All
the open outbursts of the social discontent have been traditionally
connected to large urban agglomerations. Therefore, social tensions
generated by housing shortages, lack of services and like should be
managed first of all in the cities.
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-
As I mentioned earlier, the rural/urban dichotomy was maintained by
neglect of the infrastructure, too. Scarce budget resources for
infrastructural development were channelled towards industrial regions and
to large schemes, e.g. building of large housing estates which had to be
located in cities.
Disadvantages to rural settlements come partly by the traditional suspicion of
the European communist movements. The majority of the rural population evidently
did not support the industrialization program of the postwar East-Central European
communist governments (which was based largely on the diverting profit of
agriculture), nor the collectivization of agriculture. As the rural population was the
majority in most countries of the region, the new power destroyed the organizations of
the rural interest groups, the self-government of the rural communities, the traditional
cooperatives for making organized resistance by the rural population impossible.
Rural people became the symbol of backwardness, selfishness, "petty bourgeois"
behaviour and the remnants of the past.
The evident discrepancy between the declared goals and their achievements
has had different scales as well as different types of spatial conflicts and social
dissatisfactions within the settlement network. Urban dissatisfaction was more visible
but the rural one was deeper. In Hungary the partial election of representatives (1989)
showed that Communist candidates won 25-30 percent of the votes in urban
constituencies but only 15 percent in rural ones.
(c) Regional and urban policies backed the geographical concentration of the
settlement network. This was a logical consequence of the urban-biased and
centralized policy.
This statement may be discussed. After all, the proportion of the urban
population to the total one is not high; in fact, it is much lower than in Western
Europe. Konrad and Szelenyi have developed a different opinion. They state that state
socialism broke the urbanization process. Consequently, East-Central Europe became
under-urbanized. 8 Later Szelenyi formulated "under-urbanization" as an important
characteristic of the socialist urbanization model . 9 They based the "anti-urban" nature
of state socialism on the relatively low proportion of urban population, on the
administrative control of urban growth, on the strong "rurality" of the suburban zone
of urban agglomerations, etc. I assume that the relatively low ratio of urban dwellers
comes from the belated urbanization — the rurality of suburbs is "normal" in an early
stage of European suburbanization — and urban shortages are caused by the general
neglect of infrastructure and not by the neglect of cities. The centralization of state
industrial enterprises and the lack of medium-sized and small businesses also
contributed to urban concentration.
The real conflict is that the concentration of public services developed much
faster than the concentration of the population explaining the growing number of
rural people who remain without basic services. Rural depopulation has been the side
effect of modern urbanization everywhere but in socialist countries depopulation was
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forced by administrative measures, e.g. by interdiction of new construction, by closing
rural schools without the introduction of school busing. There were centrally compiled
lists of villages to be depopulated. Collectivization of agriculture liquidated private
property while the organization of agricultural work to be performed on huge
collective lands led to commuting within the rural area. Local communities had no
chance to halt their decline. Their fate was designated in distant planning bureaus and
political decision-making centres.
In market economies some settlements begin to decline when their earlier
functions are no longer relevant. The fate of these settlements is determined by the
market forces of their local economies, resources and societal needs. In sum,
settlements threw to decline according to their ability to participate in modern
urbanization. In state socialism such selection is made by the bureaucratic power. This
selection is based on technocratic elements (which can partly replace market
judgement) but it is simply impossible to obtain satisfactory information about the
viability of all of the settlements in the centres. On the other hand, political viewpoints
and interventions by party leaders are more powerful than technocratic criteria.
Citizens suffer or enjoy the consequences of regional and urban policies but they are
unable to participate in their formulation.
(d) The "efficiency" in the regional and urban policies. "Efficiency" has justified
the tendency toward concentration and the central control of regional development at
least in those socialist countries where economic rationality has been used in the
argumentation of the policies. It is evident that there are minimum thresholds for
consumers (users) to run a hospital or to build a sewage system. It has also been
experienced that big cities have high costs of functioning because of the need of
special (and expensive) infrastructure, e.g. underground railway. In the 1960's there
were a number of scholarly publications on the optimal (efficient) size of a city. There
were different opinions but it was generally accepted that
(a) Great urban agglomerations are very expensive to run and their efficiency
is poor.
(b) Medium-sized cities of several hundred thousands of inhabitants are the
most efficient because the costs of their functioning are not too high; at the
same time, they have all the advantages of metropolitan agglomerations. At
that time "the agglomerational advantage," i.e. easy cooperation of industrial,
fmancial and trade enterprises operating within a single settlement, was
important. Telematics made this advantage insignificant.
(c) Modern basic rural services also need a few thousand consumers, thus, a
new rural supply model should be elaborated. 1°
These "efficiency studies" became outmoded rapidly but they were kept alive in
East-Central Europe because they supported the centralization approaches. I don't
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support efficiency studies. First, it is impossible to calculate the efficiency of a
settlement. "Efficiency" meant economic c technical efficiency but a settlement was
first of all a social organization. Social efficiency could not be expressed in monetary
terms. Efficiency of a health care system is characterized by the improvement or
decline of the nation's state of health, rate of mortality and the like and not by
cost/benefit ratio. In practice nobody knew the efficiency of housing, health care or
education (actually, because of the arbitrary price system, nobody knew even the
efficiency of the economic activity). These efficiency studies used an outmoded
"economy of scale" for judging the efficiency of public services of urban growth.
"Efficient" became the synonym for "big". This statement expressed the interests of the
leadership of public administration of public services. Larger organizations meant
stronger power for their managers and easier access to the political leadership.
This interpretation of efficiency did not accept that different functions or
activities need different sizes of organizations. Monolithic state ownership necessarily
creates large organizations; small units could not support the enormous economic
bureaucracy. A number of rural services disappeared simply because private
ownership and local cooperatives (based on voluntary membership) were abolished.
Grocery stores, repair shops and building industries have disappeared in a large
number of East-Central European rural settlements because private businesses were
not allowed or they were economically discriminated. The absolute dominance of
state ownership contributed largely to the worsening of rural living conditions.
Summing up the characteristics of socialist regional and urban policies I can
state that people were missing from these policies. People appeared as manpower or
(perhaps) as consumers but not as individuals. The organizations of local societies
were dissolved. The political socialization has been largely relocated from the
settlement to the working place. State-owned enterprises, thus, functioned as a mixture
of economic and socio-political organizations offering much less opportunity for
individual activities than settlements would.
(2) How could I make a balance of the successes and failures of regional and
urban policy of the last 40 years? How did socialist urbanization diverge from other
European urbanization trends? What was the role of regional and urban policies in
shaping the "socialist countryside?"
Regional and urban development was guided mostly by sectorial planning and
decisions. Regional and urban policy compared to the economic and social policies
has been a weak partial policy. It was not supported by powerful lobbies, local
interests were not accepted by the central power. Urban policy might serve as an
excuse for certain government decisions but its independent influence was rather
limited. The transformation of the settlement network and the development trends of
different regions of a given country have been long-term prdbesses. Governments and
planners could produce spectacular changes in a sector of a given city or in a few
places of the settlement network in short time but they could not transform rapidly
and arbitrarily the settlement network and the regional system of a country. Planners
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are not omnipotent. At best, they can introduce wise corrections of the spontaneous
processes of urban and regional development.
In my view, modern urbanization and regional transformation are global
processes. Industrialization promoted a certain type of urbanization everywhere. East-
Central European industrialization produced the same type of urban and regional
development which had developed in Western Europe earlier. East-Central European
development was regular and did not deviate from the global model. Following are
the basic characteristics of the global model:
- relocation of the population within the settlement network and growth in the
percentage of the urban population,
- spatial separation of working places from residences (hence the extension of
commuting),
- development of functional and socio-ecological zones within cities,
- suburbanization, conurbations: spatial integration of settlements,
- disappearance of monofunctional agricultural regions,
- formation of an interrelated settlement system with the full hierarchy of
central places (urban centres) strengthening of the small town network,
- expansion of tertiary and quaternary sectors in the employment which have
different locational behaviour than traditional industry.
Market mechanism and central planning have resulted in similar spatial
processes. I assume that they represent simply two types of techniques for conveying
the process of modern urbanization. 11 On the other hand, even in the case of the most
centralized planning system regional and urban development has been shaped
through millions of individual decisions, too. "State" urbanization creates but built
environment, employment but the spontaneous process of urbanization is made by
such individual decisions as selecting a residence, a workplace, a certain type of
training, education for children, etc. Individual desires are quite simple and quite
uniform everywhere in Europe: adequate housing, employment, accessibility of
services (and perhaps accessibility of friends and family members) and social prestige
of the residential area. When government rules made this goal-setting officially
impossible society developed self-defense mechanisms. When the housing market was
abolished exchange of apartments developed as a hidden market. When state
enterprises could not offer necessary services a second economy replaced them. If it
was dangerous to accept money for "black" work an exchange of work developed.
East-Central European urbanization was similar to urban and regional
development in other regions of Europe. It was not identical. Both historical
development (the belated industrial and urban development) and socialist power have
made their imprints upon it.
State socialism has been an alternative model for industrialization. It became
evident that it could not serve as an alternative model for further modernization, for
post-industrial development. This social model will be exhausted when a stage of
urban and regional development has also been completed. East-Central Europe will
enter into a higher stage of development by systemic changes. This double transition
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will not be an easy period. We are accustomed in this corner of Europe to pay high
price for progress.
NOTES
1 According to some authors command economy and market economies are
two different techniques in economic management and they are not social
system specific. Capitalist countries used command economy during World
War II and even partly during the reconstruction period. Thus, socialist
countries can use market techniques in "peaceful" periods. I have doubts
about this statement.
2
Evidently, this grouping is a simplification. For instance, Bulgaria has
introduced from time to time spectacular but short-lived economic reforms
and there were ups and downs of reforms in the second group of countries.
3 Actually, nobody knows much about the new model. A group of politicians
insists that the new model, based on a mixed economy, a multiparty system
and basic democracy of a civic society, will be still socialist. Others suppose
that one can establish a capitalist (market) system with strong social
solidarity, a type of the Scandinavian society. Another group intends to
develop a "third way", a model between the socialist and the capitalist
societies. Liberal capitalism has also supporters. All the future models are
sketchy and theoretically poorly established. Social scientists have
extensively studied the transition from capitalism to socialism but the return
way has remained unknown. Anyway, East-Central Europe has been a
distinct historical region of Europe for a millennium and any type of a new
social model would fit to the long-lasting traditions of the region.
4 In reality, all the serious uprisings against Communist governments (Berlin:
1953, Budapest, Poznan: 1956, Gdansk: 1970, Gdansk: 1980, Brasov: 1987,
Bucharest: 1989) started in large urban-industrial centres.
5 LACKO, L.: Assessment of Regional Policies and Programs in Eastern
Europe. In: DEMKO, G. (ed.) 1984. pp. 124-157.
6 RONNAS, P. (1984). p. 66.
7 It may be true that in this case the existing socialism does not fit the criteria
of the socialist society.
8 KONRAD, Gy. — SZELENYI, I. 1971.
9 MURRAY, P. — SZELENYI, I. 1984.
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10 According to a Swedish supply model, which was elaborated in the 1950's,
a threshold of 3,000 people was determined to be the minimum number of
consumers for modern rural basic services. Curiously enough, this number
of 3,000 persons later appeared as the "minimum size of a socialist
settlement" in 1964 in the Hungarian settlement development concept and
in 1974 in the Rumanian settlement systematization law. The Swedish model
intended to serve by a small city 3,000 farmers in lonely dispersed farm
settlements in a large area. In East-Central Europe without adequate road
systems and without individual motorization the 3,000 persons were to leave
their original homes and be resettled in designated "agro-industrial towns"
(Rumania) or in "basic supply centres" (Hungary).
For more detailed explanation see ENYEDI, GY. 1989.
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Discussion Papers 1990. No. 9.
New Basis for Regional and Urban Policies in East-Central Europe
Papers published in the Discussion Papers series
No. 1 OROSZ, Eva (1986): Critical Issues in the Development of Hungarian Public
Health with Special Regard to Spatial Differences
No. 2 ENYEDI, Gyorgy — ZENTAI, Viola (1986): Environmental Policy in
Hungary
No. 3 HAJDO, Zoltan (1987): Administrative Division and Administrative
Geography in Hungary
No. 4 SIKOS T., Minas (1987): Investigations of Social Infrastructure in Rural
Settlements of Borsod County
No. 5 HORVATH, Gyula (1987): Development of the Regional Management of
the Economy in East-Central Europe
No. 6 PALNE KOVACS, Ilona (1988): Chance of Local Independence in Hungary
No. 7 FARAGO, Laszlo — HRUBI, Laszlo (1988): Development Possibilities of
Backward Areas in Hungary
No. 8 SZORENYINE KUKORELLI, Ir6n (1990): Role of the Accessibility in
Development and Functioning of Settlements