The Content of Regional Development and the Integrated Regional Development

Starting from the fact that in regional terms there may be considerable differences between the economic performances of different regions even smaller socio-economic processes or the ones at lower regional levels may play important roles within the global dimensions of the economy. Using the competitiveness of the region as an ideological umbrella is a common tool used in exploring cause and effect relationships and interpreting local and regional economic development. In Hungary, for example, in regard of the profit making ability of the economy, the differences between the local, regional and settlement (NUTS 3, 4, recently called LAU 1, 2) levels can be at least as significant as between regions and counties.

Recognising the variances in magnitude, the differences as regards proportions and trends can be even more characteristic at local and settlement levels but due to their peculiarities the local factors can influence and affect trends in the global economy. In such an approach, the recognition of local peculiarities and the intervention on this basis is of vital importance, even if the global processes of the economy can influence local actions even more strongly. In a broad sense we might as well say that the starting point of global problems may be the local level, the economy of the small region and mainly that of the settlement (Bajmócy 2011).

The truth content of the latter cannot be questioned even if it is settlements, that is usually meant by the local level by public knowledge, although the local economic development rather displays its effects in the system of relations and brings about changes of importance in larger local, or maybe regional or possibly urban and areal or inter-settlement polycentric units of settlements. When talking of local economic development, which means a conscious intervention into economic processes, it is always small regions and settlements that are understood by the term area development. Guided by the classification of EUROSTAT and wording it more precisely, there are two local levels, on the one hand there are statistical small regions (their number in Hungary is 174) and on the other hand there are settlements - villages, towns and cities – (on 1^st January 2011 their number is 3154 out of which 328 are settlements with the legal status of a town or a city). In this relation the concept of local region gains a special importance as it means a town and its satellite settlements where workforce is attracted from. For example, in the case of a town and its satellite settlements the residents employed can change their jobs in the local region without having to change their residences or just the other way round, the change in the place of residence does not necessarily entail a job change as well. Starting out from the above, local economic development at the local level in theory, primarily means the level of settlements and as regards it essence it much rather refers to local regions or small regions that embody it more fully (Baranyi, 2007c).

Law CVII of 2007 (amendment of Law CVII of 2004 on the multi-purpose small area association of local municipalities) resulted in the establishment of 174 small regions or complex small region associations. As regards local economic development the system of small regions created further opportunities that enhanced the formation of a novel economic operation with a dynamic attitude (Bajmóczy, 2011). Amongst others the following factors, including the widening of the roles of small regions as listed below also contributed:

 The establishment of the system of development councils for small regions, which covered the area of the whole country without overlaps.

 The regulation of the spheres of tasks and authority of small region development councils, the precision of the regulations related to municipal associations for regional development at the level of the small region, without limiting the freedom of association.

 All the mayors in the small region are members of the development council (irrespective of the fact whether they are members or not of some development council in the small region).

 Increased prevalence of the principle of partnership, the extension of the number of those involved in the work of the council (representatives of chambers of commerce, economic organisations, civilian and other social organisations, etc. in the small region taking part with the right of consultation).

 Joint undertaking of implementing projects and securing funds.

 For lack of a two-third-majority law the basis of sustainability and operation is the central fund awarded for tasks undertaken jointly in the form of the association.

The conceptual content of regional development was laid down in law XXI on regional development of 1996, which mentions economic development as an area to be stressed among the objectives and tasks of regional development and also includes local dimensions and highlights among others:

 the enhancement of establishing a social market economy,

 establishing the conditions for sustainable development,

 enhancement of the spatial expansion of innovation,

 establishment of a configuration also meeting economic objectives,

 moderating the differences which are also manifested in economic conditions,

 maintenance of the equilibrium between the economy as well as the environment and society,

 a development policy that enhances the renewal of the economy and uses regional resources,

 the enhancement of the renewal of the structure of the economy,

 improving the conditions for innovation,

 and creating an environment that is attractive to investors.

The norms for developing local economies were already included either directly or indirectly in the objectives of regional development with a special emphasis in the principles and tasks of Tftv of 1996.

 Changes in the spatial and settlement configurations so that conditions are established for the receipt of businesses, making local resources dynamic and increasing income earning.

 Decrease in the differences in opportunities – bringing civilisation and infrastructure conditions nearer to each other, decreasing the level a backwardness of regions, handling social problems, the enforcement of the territorial aspect of the welfare state.

 Developing programming methods – tools, institutions that signal problems, early recognition and handling of signs of structural crises; the role of a regional development strategy, development of the system of tools and institutions of the European Union and dissemination of their practices.

 Activation of endogenous (internal) resources – strengthening human, natural endowments, local initiatives, bottom up movements and the introducing new forces into regional processes.

 Increasing the co-ordinating role of regional development policy – vitalising interests at higher than industry level, reviving cooperation between industries.

 Strengthening cross-border cooperation – active participation in it, exploitation of the potential of the country, new opportunities for finding contacts with Hungarian national living in neighbouring countries, which can be ensured right through the economy and regional cooperation (infrastructure, offering gates, reviving the economy).

The tasks listed, however, were not highlighted in the law with a general purpose of economic development, but as tools that can help backward regions close up, can be used to decrease regional differences within the country, and directly or indirectly put the possible content and development potentials of local economic development into words. As a matter of fact, this was in line with the demand for changes in the economic structure, which was in the foreground of public thinking and tasks of the 1990s, and which was called to serve the establishment of a modern competitive economic structural change. Although the law neither names nor uses the term “local economic development” either as regards its objectives or tasks literally, but in its content it is definitely there and it is easy to notice that local economic development may mean above all the exploitation of regional resources.

On the basis of technical literature on the topic, scientific analyses and also the view of regional (area) science, according to concordant, so to speak mutual understanding, economic development although is not the sole and exclusive but remains a very important tool for regional development. According to the National Regional Development Concept economic development is no longer the primary tool for regional development but it is changes into a complex system of development more and more, in the new concept of the content and method of which the term integrated regional development is most suitably used.

A definition of integrated regional development

Regional development is the sum total of interventions which signal that economic development can serve regional development in topic-specific relationships only together with other regional development interventions, in a regionally integrated complex manner. As regards this integration, which is in fact integrated regional development in the modern sense, it is the local economic development that offers the most efficient solution and space, which presupposes reliance on versatile social, economic and cultural resources. In a modern approach integrated regional development secures an important priority for the development of the local economy (Czene and Péti, 2010)

The local production or service providing activities involve the full range of activities but as regards activities resulting from local economic development, it is not only local employment opportunities and incomes resulting are important from the point of view of regional development but the efficiency of local development policy also contributes to keeping the population of small settlements and rural areas in place and preserving cultural and environmental treasures. In the case of an economic development applied efficiently another objective of regional development, the polycentric network of settlements or a harmonised area structure can also be realised. (Czene and Péti, 2010).

In addition to the fact that integrated regional development meets the most important objectives of the regional economic policy of the EU aiming to decrease economic imbalances, among others the Barca reform proposals (see chapter 5), which represent place-based solutions of the development policy by serving the cohesion policy in a new way since the directions of the new strategy of the development policy are built on local (small region and settlement) dimensions in it with a special view of the two objectives undertaken in the program package, the increase of low efficiency and the elimination of social discrimination as well as providing assistance to ensure equality and social adaptation.