principles to new areas.) The entry of private organizations into traditionally state-controlled public services can be considered decentralization if that activity is carried out in the form of regulated relations with a government agency. Such a relationship may include citizens
“contracting out,” in which a private organization assumes government functions, and/
or the regular state financing of such activity. Private (i.e. non-state) organizations may be in contractual relations with the state at any level of public administration, and they assume functions that transcend those of the local authorities. In Latvia, the only recognition that a function discharged by an NGO is “public” is tax allowances, but the state does not purchase social services from them. In Hungary the non state-owned residential welfare institutions are eligible to the same per capita normative state subsidy as the state-owned ones. In addition, the government finances the discharge of various welfare functions by private organizations in the form of contractual relations. “Funding of service-delivery NGOs in isolation from local government may not promote dialog, but rather competition and even confrontation between local authorities and civic groups. The challenge is to support civic actions at local level while ensuring that their autonomous activities are linked, to the greatest possible extent, with broader development processes and institu-tional dynamics in a given territory” (Jean Bossuyt and Jeremy Gould 2000, p. 10).
5.2 The Birth of New States
Western literature about decentralization posits a state that is relatively constant over time and which is continuous in its history and implemented state functions.
We have already asked the following question: If we posited a fully centralized state, how should we characterize a decentralized state in which the state functions, and the funds and institutions needed to fulfill them, would (through some mechanism) be transferred to sub-national or other autonomous players outside the center? It is evident that in CEE (just as elsewhere) there are local government authorities, autonomous state players, and non-state players all of which fulfill public functions, and there are mecha-nisms that ensure for those players the prerequisites to fulfill their functions.
It is however relevant to ask whether or not it is justifiable to speak about “centralized states” that supposedly preceded the present situation, in which social policy (and other) functions were fulfilled centrally unlike today, when they are decentralized. There were centralized states, but they were different states.
Some of the transition countries, e.g. Poland, the Czech Republic, and Hungary, already had independent statehood prior to the transition. That is why it is possible (at least in principle) to compare statehood before and after transition. The Eastern Bloc collapsed in such a short time and transformation was so thorough that it is justifiable to consider the decentralization of social policy a continuous process in which former centralized functions smoothly converted into decentralized ones. But even in the case of the Polish, Czech and Hungarian states, we cannot suppose that the state has remained unchanged apart from certain functions being decentralized. In fact, these states are now entirely different from what they were before transition.
It doubly applies to the “new countries” of Eastern Europe, some of which had not had a modern state for a long time or had never had one at all. As far as Latvia or Ukraine are concerned, it is untenable to suppose they were ever centralized and have since been decentralized. Those states did not even exist for several decades. Today, only ten years after their (re)birth, it is impossible to examine how they have decentralized their former non-existent centralized state. All we can analyze is their present operation, social policy, and state composition.
5.3 Reviving the History of Independent Statehood
The states of Central Eastern Europe considered the Soviet system an alien state formation, one that had been forced on them. In fact, they attained independent statehood upon the collapse of the Eastern Bloc as its negation. After they became independent states, earlier nation-state traditions exerted a strong influence on their new state formation (with or without nationalist pride). So that the new states could revive their national identities, they tended to embrace national traditions about statehood—rusty as some
of them were. Between the last third of the 19th century and the first half of the 20th century, in Hungary and Latvia the state was in several respects prosperous and not very far behind the advanced states of the time. The residents of those countries keenly cherished the memory of those times. (In Hungary at the 1990, 1994 and 1998 parlia-mentary elections, senior persons were returned to Parliament who had previously been MPs in the pre-Sovietized, democratically elected parliament.)
If we ask about memories of the former sovereign statehood in the case of Hungary and Latvia, we will get the following answer: Local government authorities played an outstanding role in the nation-state tradition in connection with democracy and economic prosperity.
The history of Latvia over the past centuries has in many respects been one with that of Riga. The country’s prosperity always depended (and still depends) on whether Riga (where a third of the population lives and which used to belong to the Hanseatic League) did well as a center of commerce. At times, when Riga, a free and autonomous city, operated as a flourishing merchant town between the North and the East, Latvia prospered. Latvia will only succeed in exercising its political power if it institutionalizes Riga’s municipal autonomy.
The history of the Hungarian state in modern times is different. In the Austro-Hungarian Empire, Hungary was subordinated to the Habsburg-governed Austria.
Bodies similar to local authorities, headed by an elected village mayor, managed villages.
In addition to the village mayors, strong local government tradition owes its background to the town councils of the burghers of medieval towns, which focused on the defense of the towns. After the collapse of the communist regime, municipalities were revived in town and country to replace the over-centralized Soviet-type councils.
Ukraine experienced independent national statehood only during a short, but important, period at the beginning of the 20th century. At that time the infrastructure (legislative, legal, and executive bodies) was established. This period, however, did not last long because of the Bolshevik invasion.
5.4 Skipping Missing Decades
The question of historical legacy is quite complex. Even experts of sociology and cultural anthropology may find it interesting how institutions of public administration from pre-Soviet times can be filled under present political and administrative conditions with experience attained by public administrators under communism.
A question that needs further research is whether administrative traditions dating back to independent statehood before communism can provide institutions that are capable of responding to the challenges faced nowadays by local authorities. Of the three countries, Ukraine’s position is the most difficult. It lacks even relatively long-term modern nation-state traditions concerning public administration.
The tradition that can be perceived in contemporary Latvian legislation is in several respects the closest to the Western type of community administration. Philological research has also confirmed that the regulations applied in local government activities in Latvia have been borrowed from the Presbyterian self-government principles of the Lutheran Church. In Riga that tradition goes back to the Hanseatic League. Only the future will show whether or not the “countryside”—which accounts for two thirds of the country’s territory and where Catholics (50% Roman, 50% Greek Catholics) live in scattered localities—can also embrace that tradition. The question can be put in more direct terms by asking if the “countryside” accept the Presbyterian principles of self-government as indigenous Latvian institutions.
In Hungary, relying on the pre-1945 traditions of public administration, it took but a short time to replace the over-centralized communist council system. In addition to the apt observation that local authorities are testing grounds for students of democracy, it is chiefly the pre-1939 administrative traditions that can explain why there are over 3,000 local authorities in a country of just ten million people. Before World War II those municipalities had narrower functions, such as employing a village teacher and operating a village school, where children of different ages studied together. The only other function they discharged was that of fostering the identity of and instilling pride into the local community: an example being that of keeping the cemeteries tidy. A considerable part of Hungary’s local authorities can still do little more than fulfill those functions. It is unlikely that Hungary can ever establish a municipality for each of its more than 3,000 citizens that can discharge each of the following functions: maintain proper schools, provide health care and social services, monitor damage to the environment, issue build-ing permits, act as guardianship authority, etc.
The local government traditions of all three countries go back to pre-modern times when the post-1945 criteria associated with the welfare state was not institutionalized.
Those administrative traditions failed to include expertise in social policy administration that evolved and matured after 1945. And that was not all they lacked. Paternalistic methods of governance may have been adequate to handle certain local crises (on a family level or in a small community) in which rights and duties are unarticulated, yet today can violate fundamental liberties or be discriminatory.