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Abstract This article focuses on Hungary, a unitary state with a local government system founded close to the Germanic state tradition and infused with some Napoleonic elements. Various forms of local and regional autonomy existed in the history of Hungary, however they were destroyed in the communist period. In the new political system of Hungary, the fundamental elements were based on considerations and interactions of participants. The outcome was not determined by any of the state traditions but rather by the cultural kit available to actors and limited by the path dependency of existing institutions, the self-interest of the old and new elites, the symbolically and economically powerful external influence, and the public mood. External pressure more than the state tradition has shaped the political system of Hungary. The local democratization yielded a mixed outcome. On the one hand, local governments were able to successfully replace the old system of communist councils, and became the basis of the functioning system of public administration and legal autonomy. However, the subnational system now has to overcome four challenges, all of which have roots in the various aspects of democratization: the democratic deficit; the highly fragmented local government system with a high cost of local administration and services; the lack of consensus on the powerful meso-governmental level; and the weakness of the societal autonomies.
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