Mayor takes initiative
Community Based Economic Development
in the Town of Nagykata, Hungary
Best Practice UN-Habitat 2002

Lead Idea

Cooperation was the key to making a single initiative successful. The mayor of Nagykata in Hungary, with the help of a comprehensive democratic process, was able to draw up an urban development plan which has already won international recognition. As a result, many major companies have settled in the area and unemployment has been reduced from 25% to 5%.

The issue at stake

Following the fall of the Iron Curtain, Nagykata, a town of 13,000 inhabitants, was faced with a rate of unemployment of 25% in the 1990ies. With no infrastructure in place few investors were keen to settle in the area. In addition, state funding was hard to come by.

Possible solutions, resources

Katalin Bodrogi, the ambitious mayor of the town, contacted the Canadian Urban Institute (CUI), which was just about to launch a project to support economic development plans for cities in Hungary. To participate in the project a town or city had to submit a concept prepared with the support of citizens. A working group had to take stock of the situation, identify synergies, opportunities and options. Once that step was completed the CUI agreed to finance a pilot project, a training programme and a promotion campaign in cooperation with the international business community.

Process, effects

Citizens were asked to contribute their points of view throughout the entire process. Only those steps were implemented which had the support of the majority of residents. Adhering to the democratic approach proved very difficult during this first stage, as the mayor frequently had to fight the political opposition and their criticism of the proposed measures. Yet dealing and coming to terms with criticism also added quality to the project and raised its acceptance with the population. Soon investors were found who supported the project: a large Japanese corporation built a huge plant with 1,900 new jobs; it was quickly followed by a Swedish company and a number of smaller firms. At the same time, tourism was developed as a second pillar for the local economy, making use of the spa waters nearby as one of the town's attractions.

Experiences, transferability

The rate of unemployment was reduced from 25% to 5%, at the same time state funding dropped from 95% to 80%. Ms Bodrogi has won recognition as an expert for economic development programmes for small towns in Hungary and has participated in several seminars since. She considers active citizen participation one of the main aspects in the context of successful economic development.
A network has been established with neighbouring towns, and regional EU funding has been applied for.

Size of municipality: small town
Participation: mayor's initiative, regular surveys with inhabitants, discussions with opposition parties
Financing: local budget, Canadian Urban Institute funding, international corporations, EU regional funding for network