The opportunism of national governments
To varying degrees, but in all four countries examined, central governments attempted to use the Covid-19 situation to further their political goals and consolidate their control and influence over local governments in a way that goes beyond the traditional wisdom that crises tend to favour the incumbent. The crisis was primarily managed from the national level in other countries as well, with both the European and the local level taking a backseat, a phenomenon coined ‘coronationalism’. The emergency situation paved the way for state interventions and actors in charge of the executive formulated measures in a way that also served their political interests – hence we consider this approach opportunistic rather than an ideological attack on local democracies. These attempts were successfully thwarted by the local level if local governments still retained considerable autonomy and felt sufficiently threatened to choose the path of legal or collective political action.
In the context of our research, Hungary and Czechia represent the two ends of a spectrum. The Hungarian government was quick to see the opportunity to further consolidate its power and to constrain freshly-elected opposition-led municipal councils. In terms of legislative changes the government set the stage with the introduction of the Covid-19 state of emergency, making possible a rule by government decrees with no sunset clause, as well as prohibited the organisation of referenda and suspended sessions of city councils while placing emergency powers into the hands of mayors. The government also created the option to designate “Special Economic Zones” where the administrative tasks and the collection of taxes is transferred to the county governments (with solid Fidesz-majorities). This development complemented the trend of excluding municipalities from overseeing the compliance with spatial planning and construction rules in the case of significant infrastructure investments on their territories. The trend had started before the pandemic, but continued well into the Covid-19 crisis.
Even more detrimental for local autonomy were the various measures aimed at the budgets of local governments: prohibition of tax increase and the levying of new taxes, prohibition of borrowing, revenues from vehicle tax transferred to the state, collection of parking fees suspended (a local source of income for municipalities), business tax break and increased solidarity tax for larger cities in the equalising scheme. General compensation for increased crisis management costs and shrinking revenues was only provided for settlements under 25000 inhabitants, above which compensation was clearly linked to partisan interests. Another channel for compensation (even if not declared as such) were various development schemes, such as the Modern Cities Programme or the Hungarian Tourist Agency’s Kisfaludy Programme, which clearly prioritise municipalities (and oligarchs) aligned with the government.
The nationalisation of primary healthcare services (so far remaining under municipal management), including both general practitioners’ offices and specialist clinics has also appeared on the government’s agenda. This would not only contradict the lessons of the pandemic, but would also deprive healthcare workers of benefits often provided by local governments. The looming threat of recentralisation might have already prevented municipalities from spending on much needed investment in local healthcare, thus resulting in sub-optimal public service delivery even before its implementation.
On the other end of the spectrum, the Czech government’s crisis response has been described as an egalitarian approach to maintain the status quo. The only attempts at limiting local governance were quickly and successfully challenged. First, a restriction of local assembly meetings (could only convene in online manner and in absolutely necessary cases) with public participation excluded was introduced. This measure was challenged on a constitutional basis and was rectified by the government within 14 days by only issuing it as a recommendation for conducting local assemblies. Later during the development of a compensation scheme for municipalities, Prime Minister Andrej Babiš proposed to disburse the compensation in the form of subsidies at the discretion of the government. This was seen as increasing the risk of a politically biased distribution and in the end, each municipality received a compensation of CZK 1250 (EUR 48) per capita. By and large, the Czech state lacked the capacity to coordinate an effective crisis response let alone to curtail local autonomies.
The Polish approach to municipalities during the crisis was characterised by an approach closer to the Hungarian, with seizing the opportunity to increase the financial dependency of local authorities. The previously initiated personal income tax reduction took effect, the government took control of the environmental protection funds (formerly controlled by voivodships), reduced transfers through the equalisation scheme (Janosikowe) and failed to match the increasing costs related to Covid-19 emergency services with compensation. Unrelated to the pandemic, but the government carried on with its centralisation attempt over the public school system. Two measures generating the most public outcry were a proposal for healthcare reform and the operation of the new Government Fund for Local Investments. Regarding local governments the healthcare reform would have included the decision to cede control over the hospitals to the Ministry of Health, but was later abandoned. The investment fund received widespread criticism for its non-transparent decision-making process and for favouring government-affiliated municipalities during the disbursement of funds. Throughout the pandemic local civil society organisations, mayors and the Association of Polish Cities publicly criticised the centralisation efforts of the national government, but generally achieved little success. With municipalities experiencing record high public trust ratings and receiving praise from citizens for the pandemic crisis management, it is unclear whether these actions will prove politically beneficial for the government during the elections in 2023 and 2024.
Romania also embarked on an opportunistic, albeit limited centralisation process. Closely related to the pandemic, the government took over the management of healthcare facilities from local administrations with the power to appoint, suspend and release from office the persons in charge of these establishments. They also transferred the local police force under the operational reporting to the Ministry of Internal Affairs. The government employed a similar, discretionary funding scheme for development like Hungary and Poland. Additional funding during the pandemic has been provided for municipalities through the Budget Reserve Fund on a case by case basis, but without transparent award criteria. Both political bias and a cyclical disbursement aligned with elections can be shown in the funding data. In some cases, local authorities followed the example of the national government and abused the opportunity of simplified spending regulations during the state of emergency to finance their own agendas in a non-transparent manner. Where Hungary employed a mix of pandemic compensation and development programmes, and Poland provided additional funding mostly through the Fund for Local Investments, Romania only used this Reserve Fund to compensate for the increased costs and reduced revenues of municipalities. Nonetheless, all three approaches share a similar underlying logic of non-transparent discretionary decisions, especially when contrasted with Czechia’s blanket compensation for all municipalities.
Interaction of local and the national level
Both the effectiveness of centralisation efforts and the nature of the interactions between the local and national levels are influenced by the distribution of power between these two levels of administration – two components are institutional set-up and the strength of the respective political mandate (Fig. x). Based on the example of these four countries, we found that in countries with more decentralised administrations (Poland, Czechia) the local level is more likely to resist centralisation attempts than in countries where local governments already have relatively fewer functions and resources (Romania, Hungary). Moreover, in Romania and Hungary municipalities attempt to represent their interests through partisan channels and actors try to secure better positions for their own cities, with the individual bargaining strategies further increasing the leverage of the national level and often leading to clientelistic relations. In contrast, in Poland and Czechia, local actors represent their interests publicly and collectively, often through unions, associations or other alliances. The success of political action (be it collective or individual lobbying) however is highly dependent on the concentration of political power. It is reasonable to expect that in countries, where national governments have a strong political mandate and authority is used in a more hegemonic way (Poland, Hungary) it will be more difficult to resist centralisation in times of crisis than in countries with more diffuse political power-structure (Czechia, Romania).
The Czech Republic and Poland are similarly decentralised states with significant competences and resources delegated to the local level and supported by sufficient constitutional safeguards. However, the differences in the political mandate can explain the different situation local governance faces in these two countries. In Poland, a unified and centralised party has governed with a sufficient legislative majority since 2015 and already managed to erode local autonomy significantly. Hungary provides the worst-practice blueprint for what would happen in case constitutional majority is attained by PiS. Nonetheless, local actors still have the means and the public support to fight back occasionally and challenge the government in certain policy areas. In contrast, Czechia has had a minority government during the first half of the crisis and even the current coalition is constituted of highly diverse parties. Taking into consideration, that mayors may hold position in the national legislation and that the local level has a direct political representation in the government in the form of Mayors and Independents (STAN), it is not hard to see that local level has the most room to manoeuvre in the Czech Republic out of the four observed countries – both in institutional and political terms. This set-up makes it practically impossible for any (coalition) government to successfully attempt to centralise resources and competences from the local level, as opposed to Poland, where actors are engaged in a fierce struggle over municipal autonomy.
The nature of the interaction between the local and national level is probably best highlighted by the differences between the Czech and Romanian cases. Both countries have had fairly fragmented governments with relatively fragile legislative bases. But where Czech municipalities are able to build on a strong, secure institutional, formal setting and this results in collective action and political representation, Romanian municipalities lack such resources in a centralised state and rely on informal linkages and individual bargaining strategies. The relationship between the central and local government becomes two-way and transactional with both sides having to gain from a partnership, as the national level hopes for political support and legitimacy “on the ground” from locally relevant actors, and both sides avoid a confrontational approach to negotiations, thus making the issue of local autonomy absent from the political agenda in elections. More nuance can be added to the observation by comparing the Hungarian and Romanian cases, where both countries operate a more centralised administration, and both countries have a significant share of decision-making happening in informal settings. However, in Romania, the central government stands to gain something from a transactional approach, as opposed to Hungary, where informal power is exercised through command-and-control and blackmail-style relations (depending on the party standing of any given mayor) between the national and local level. This mostly results in a situation where government-affiliated municipalities may engage in a similarly competitive, clientelistic lobbying as their Romanian counterparts, while opposition-led cities submit to the idea that they will have to make do in a hostile environment.
Our assessment highlights the relevance of the institutional set-up and division of administrative responsibilities in determining the effectiveness of challenging the central authority. In a more decentralised system actors are more likely to resist and utilise all the available political and legal tools to maintain autonomy, while lack of formal safeguards of independent local administration actors will rely more on obscure informal, clientelistic linkages significantly more prone to corruption and inefficient public service provision.