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Digitization is an opportunity for everyone to be better, more efficient and more successful.[1] Whether we are looking at the level of an individual, a smaller or larger community, a business, or even the state itself, the use of the latest technologies is no longer an issue (perhaps no longer just an option) but a kind of necessity to meet different expectations. The state itself is in such a situation, it must meet today’s expectations, be it self-imposed criteria or the expectations of its citizens, or perhaps the conditions of an external power (such as the EU) and it must take advantage of the achievements of digitization. The aim of the present study is to examine how digital novelties have been utilized at the municipal level in Hungary in order to meet the criterion of Good State. For this purpose, we first examine central strategy-making from the perspective of municipal digitization, and then evaluate it through various professional materials. The focus of the study is on the centrally coordinated and implemented ASP[2] system of the autonomous municipalities, because this was the first unified domestic development to be introduced in the case of all municipalities, in contrast the former, typically island-like, individual developments.

The government that came to power in 2010 – already the barest beginning – developed a number of measures and plans and embarked on the transformation of several cardinal areas. (as is always the case with new governments). The public administration could not „escape” the introduction of innovations either. The program for the transformation of public administration was hallmarked by the name of Zoltán MAGYARY. The program was released for the first time on the anniversary of the namesake’s birth on June 10, 2011,[3] and for the second time on August 31, 2012.[4] „The goals and principles, peculiarities listed in the introduction of the program are gathered under the buzzword »good state«”.[5]

The legal bases and organizational framework for the renewal of the public administration were established by the Magyary programs, however, „the most important goal, the creation of the provider state, has not yet been achieved”,[6] János LÁZÁR said this in the greeting of the Public Administration and Public Service Development Strategy 2014–2020 (from now on: Development Strategy).

Measuring the results and efficiency of government functions („good state”) has significant international practice, which also served as a pattern for Hungary. Among the international surveys, the Government at a Glance (GaaG) report[7] should be emphasized, which compares the government performance of OECD member countries. On the other hand, the Bertelsmann Stiftung’s Transformation Index (BTI)[8] should be highlighted, which analyzes and assesses the quality of democracy, market economy and political management in 129 developing and transition countries. The indicators and results of the IMD World Competitiveness Ranking[9] were also taken into consideration when developing the domestic indicators Thus, these international documents also provided a basis for the preparation of the domestic Good State and Governance reports.[10]

In the present study, therefore, we want to transform the good state approach to the municipal level, and there we try to focus mainly on the opportunities provided by digitization. In this article we deal tangentially with the main municipality guidelines of the Magyary programs and the Development Strategy. Furthermore, taking into account the municipal aspects, we examine the Good State and Governance reports in detail, as well as other professional materials related to digitization.

We also intend to use the study to proof two hypotheses.

The first hypothesis is that the centrally coordinated municipal digitization developments provided a significant push and opportunity for the development of the Good State in several aspects.

The second hypothesis is that the municipal ASP system is one of the most complex electronic administration system from the customer’s point of view.

1. Magyary programs

Following the 2010 parliamentary elections, the Government defined the Magyary Program as a theoretical and action framework for its plan for the full administrative renewal of the Hungarian state. Initially, it would have been released annually, but in the end „only” two versions were born, setting the direction for improvements over several years. As mentioned in the introduction, the goal of the Magyary programs was to build a good state. „Without immerse in the interpretation of good as a concept, our starting point is that the state can be considered good by serving the needs of individuals, communities and businesses in the most appropriate way and within the framework of the public good.”[11] Furthermore, a good state includes the protection of natural and cultural values and the enforcement of the principles of effective rule of law and accountability. We need to deal with the Magyary programs because the municipality reforms at that time – in connection with the reorganization of the territorial state administration – were closely related to the Magyary program 11.[12] The three „components” of a good state development concept are the Magyary program, municipality reform and judicial reform. The 11 main development goals of the Magyary program were focused at the central bodies of public administration and the organizational system of state administration. However, some of its measures have also contributed to the development of the municipal organizational system and human resources.

In defining the 11 objectives of the Magyary program, the public administrative development concepts implemented in the Member States of the European Union were taken into account, according to which the following objectives were pursued: increasing the efficiency and effectiveness of public administration, reducing public administration expenditure, ncreasing public administration capacity, involving citizens, increasing transparency, modernizing administrative work, computerising, citizen-friendly administration, citizen charters. Basically, the target system of the program wanted to intervene in the development of public administration in four areas. These four areas are organization, task, procedure, and staff. Of these four target areas, no municipal mention was made in the procedural area alone in the program, so we will not examine this further.

One of the defining parts of the renewal of the administrative organization was the transformation of the territorial administration. As part of the transformation of the territorial administration, on Ja­nuary 1, 2011, the government agency – as the general territorial governmental bodies of the Government – and later the district offices began to function.[13] It is clear from the preamble of the law establishing districts that the purpose of establishing districts was (also) to create the conditions for the operation of a good state. The Magyary program, together with the local government reform, transformed the system of local public affairs and state administration affairs, thus bringing about a change in the organizational system of municipalities. In terms of tasks, they wanted to review the powers of the notary in the following respects: „(professional) powers in the field of local public affairs (in the future, the competence of the municipality); state administration (professional) competences (in the future government agency competence) and administrative (functional) competences in the competence of both bodies (district office and local municipality).”[14] The program envisages the review and deregulation of municipal laws by the Deputy State Secretariat for Municipality (Ministry of the Interior). With regard to staff, the program established the coordination of the activities of ministries, municipalities and other bodies, as well as defining uniform staff policy principles. In these three areas the program required regulation by cardinal law on local governments and related legislation.

The authors of the Magyary program 12 sought to create a separate document, which can be interpreted not only in conjunction with the Magyary program 11. Although version 12.0 builds a lot on its predecessor, due to many changes in the administration, it covers newer and newer topics and municipality is also given a more prominent role in it. The program devotes a separate subchapter to fit into the municipal program. The program considered the adoption of the Act CLXXXIX of 2011 on Municipalities of Hungary (from now on: Hungarian Municipalities Act) as a significant step. The Hungarian Muni­cipalities Act and the Fundamental Law also put the system of muni­cipality organization and tasks on a new basis. The program has already spoken of the transfer of state administration tasks performed by the notary (mayor) to the district office as a fact.[15] With the grouping of municipal powers to the district office, not only the municipal powers but also the municipal staff were reduced, as many employees were able to continue working for the district offices. The program required the establishment of a municipal ASP center.[16] Which can be seen as a significant step in municipal digitization.

Despite the fact that the central focus of the Magyary programs was not on the municipality administration, significant steps were still induced regarding the „start-up” of the municipality system and municipality digitization. The indicative role of the strategies also shows well the emerging new perspective, which seeks to re-evaluate the hitherto fundamentally passive (or rather left-behind) position of municipalities in digital development policy. It is difficult to form an opinion on the perceptible results of the strategy, as the real impact of the two programs is questionable due to their short duration, but the fact that it paved the way for more effective integration of municipal digital developments into government development programs and thus access to resources especially for EU Operational Programs and Cohesion Instruments.[17]

2. Development Strategy

Several experts believed that instead of one-year strategies, a longer-term, larger-scale program should be developed, „in which the Hungarian public administration can prove that it is good”.[18] As stated in the introduction the Development Strategy wanted to build on the foundations of the Magyary programs which already considered the „organizational foundations of a good state”[19] designated by the Magyary programs to be given. In addition to achieving a good state as the main goal, the Development Strategy also highlights the establishment of a provider state by the 2020 target date. The Development Strategy envisaged the further transfer of municipality – state administration – powers to the district offices. In our days such changes have taken place in certain areas. The plan aimed to develop, among other things, municipal management, customer relations and municipal information systems. From the point of view of our topic, the national expansion of the services of the municipal ASP center is a key area.[20] A clear example of the strengthening of digitization at the local level is that from 1 January 2014 electronic communication was introduced between municipalities and county government agencies within the system of the National Legislation Database. In connection with this the Strategy aims to deepen electronic communication more and more widely. The interesting thing about the Strategy is that it also includes village trustee services in the circle of people who need to help in public access to e-government.[21] With the nationwide extension of the services of the municipal ASP center, the municipalities were provided with a unified IT system and their administrative processes were standardized. The Development Strategy also stipulates that in order to make the provision of state and municipality public services more effective, development tools, resources and opportunities for the exchange of experience must be provided.

The Development Startegy looks at municipalities and their tasks more aspects than the Magyary programs. However here we can also find a relatively shallow and often general wording for this branch of public administration. The main target area of the Magyary programs was not the municipality administration. However in the case of the Development Strategy in order to reach the provider state in our opinion the municipalities, which are closest to the citizens has great significance, nevertheless, their role is small here as well.

Overall, the strategic programs do not consider local governments to be a top priority area where the digital switchover and new solutions should be strengthened, although the role of local communities in governance and especially in exploiting the complex opportunities offered by digitalisation (see smart city trends) is increasing. This approach will change with the Digital Welfare Programme 2.0[22] which will place a special emphasis on Smart City Developments. However within the framework of the present study, we do not wish to deal with smart city developments, given their much broader development focus and opportunities than municipal back and front office systems in the narrow sense.

3. Good State and Governance Reports and related documents

From 2015, the National University of Public Service has been publishing Good State and Governance reports and special publications related to the reports in order to achieve and monitor the strategic goals outlined in the programs and plans outlined so far. The main aspect of examination the reports and related documents in our study is municipal digitization and its development. The most expressive indicator of municipal digitization is „the number of municipalities connected to the municipal ASP system”. However, digitization at the local level is also supported by the development of e-government and citizens’ opinions on administration (access, satisfaction, awareness, etc.). Hereinafter we examine the different indicators one by one, and then among the summarizing thoughts we also discuss their overall assessment.

3.1. The number of municipal governments using the services of the Application Service Provider system

Figure 1. shows clearly that Hungary can be rightly proud of the examined indicator. It should also be noted that the municipalities started to use the services provided by the ASP system mainly only as a result of the legal obligation,[23] the degree of voluntary connection was almost small. This does not detract from the digitization value of the area. Many local governments have suffered from maintaining and operating their own IT systems, mainly due to a lack of financial resources. With the introduction of ASP, the state took the burden off the shoulders of the municipalities, but there is a prize for digitization. The used systems can be accessed at any time not only by municipalities, but also by state bodies (such as the Hungarian State Treasury). Thus, the autonomy of municipal management was sacrificed on the altar of digitization.

1. figure: Number and proportion of municipalities connected to the municipal ASP system
Source: Self edited based on the report: Kádár Krisztián: Hatékony közigazgatás. in: (Kaiser Tamás ed.) Jó Állam Jelentés 2019 1st version NKE 2019. 158.

As shown in Figure 1, nowadays all municipalities of Hungary have joined the ASP system and the use of the available special systems[24] is complete. However, if we look back in time (2017–2018), it can also be seen that the connected municipalities did not make full use of the special systems. The indicator basically shows valid data, only because of the municipal settlement portal system, a clause has to be made, because although municipalities have requested this service, they still traditionally fulfill their information obligation on their own website. The examination of the indicator also pertains the fact that this indicator will no longer be applicable in the Good State and Governance reports, respect of that the – mandatory – connection to the ASP system was completed on 1 January 2019.[25]

However, the “digitization benefit” of the ASP system should not only be assessed from the point of view of the public administration, but also the customer aspect should be emphasized. The customer administration side of the electronic administration portal system[26] also operates. On the customer side – after identification – we can start municipal cases, view pending cases, query tax balances and tax information, and pay taxes, fees and charges. This is a significant milestone in municipal administration, as prior to the opportunities provided by ASP, there was no or only a small number of municipalities with the possibility of real online administration.

With the complete introduction of the ASP system, the digital divide between state administration and municipal administration has significantly narrowed. In connection with the operation of the ASP system named by the Magyary program 12, we have already referred to a problematic area, apart from this, it has freed municipalities from significant financial burdens by allowing municipalities work to take place in a uniform system in the country. Furthermore, advances in digitalisation have benefited more efficient public servant’s work.

3.2. Additional indicators of municipal digitization

As mentioned above, the primary indicator of municipal digitization is the connection to the municipal ASP system and its use indicator, however, we present several indicators below, the results of which also show the strong development of digitization at the local level.

Figure 2. shows the visible progress for citizens submitting online formsIn 2018, almost 94% of municipalities already used the ASP system, furthermore, the application of Act CL of 2016 on General Administrative Procedure and Act CCXXII of 2015 on General Rules of Electronic Administration and Trust Services from 1 January 2018 „opens the door to electronic administration and … empowers customers to conduct their cases fully electronically.”[27] In this legal and technological environment, the progressive increase in online form filling is just the expected result.

2. figure: Proportion of submissions of online forms among Internet users and the entire population
Source: Self edited based on the report: Kádár Krisztián im. 147.

The continuous increase in the annual results shown in Figure 3 supports the continued growth of e-government. The mandatory introduction of digitized municipality in 2017 and its expansion in 2018 are also thought to play a role in uploading the leap-like document shown in Figure 3. Figures 2 and 3 support the increased use of ASP’s customer side special system.

3. figure: The number of registrations and electronic documents uploaded to Customer Portal
Source: Self edited based on the report: Kádár Krisztián im. 150.

The Good State and Governance report also covers customer preferences in terms of administration channel. Although we should establish the fact of digital public administration on the basis of what has been stated above, the preferences of citizens contradict this. Hungarian citizens still prefer the administration involving personal contact and the request for information (2018 – 86,5 %). In comparison, the proportion of those who choose online (2018 – 19.1%), postal (2018 – 5%) or telephone (2018 – 11.3%) administration is much lower. Let us quickly add that there are many types of cases that would not be possible without a real personal presence. Furthermore, it should be noted that as a result of the already mentioned legislative and technical developments, the proportion of those who choose the online channel increased by 7.1% compared to 2017. The other administration channels experienced either stagnation or decrease.[28]

The Good State and Governance reports are complemented by special reports detailing some of the areas examined. Among these special reports, we highlight the expert work „The domestic situation of e-administration in 2018”[29] The document evaluates the Hungarian e-administration from several aspects, so it covers among other things, the presentation and evaluation of the municipal ASP system. The report repeatedly highlights the positive effects of the introduction of the ASP system on the Hungarian e-administration sector.[30] The report concludes with a summary of the services provided by ASP, about regulated electronical administration service (from now on: SZEÜSZ).[31] Based on that the ASP is a complete service although given that the material reflects the conditions of 2018 a gap has still been identified there, however by 2020 it has already disappeared. In connection with ASP, the following administrative phase can be highlighted: guidance, information through the personalized administration interface; identification, form completion, authentication and delivery.[32] In the special report, the payment service was still referred to as the “debt” of the ASP, but nowadays the settlement of the obligation to the municipal tax authorities is solved with the help of the electronic payment and accounting system. Overall, the report sees the ASP system as a successful and efficient digitization solution, also for customers, and cites it as a good example.

In addition to the examination of domestic indicators and documents, it is also worth pointing the measurement of digital public services at the European Union levelThe European Union has been measuring Member States’ digital preparedness since 2015 using the Digital Economy and Society Index (DESI).[33] DESI uses various dimensions to monitor the development of EU Member States in the field of digital competitiveness.

4. figure: Digital public services dimension – DESI
Source: Digital Economy and Society Index (DESI) 2019 Country Report –
id=59898 [2020.03.10.]

In the case of the digital public services dimension, we need to focus on four indicators for our topic. With regard to the four indicators, it should be noted that in each case there is an improvement in a two-year comparison. This also proves that the country’s digital developments are achieving results over time. The proportion of e-government users (internet users submitting forms) in the EU document performed better (53%) than in the first edition of the Good State Report 2019 (46%), despite the fact that both related to the year 2018. However, among the examined DESI indicators – in comparison with the Member States – Hungary still achieved the best result here.

Our systems that fill in forms automatically make life easier for customers, but there is a significant lag in terms of domestic results (31) compared to the EU average (58). This put our country the not-so-prominent 23rd place among the 28 Member States at the time. This would be the highest – personalized – level of service for eGovernment, in which digital public service providers would already include certain data of citizens from the available resources in a personalized form, so that the citizen would not have to fill them again.[34] To shading the image, we would add that municipal ASP systems – after logging in – personalize the forms.

In the parameters of comprehensive online administration and digital public services provided to businesses (82 and 77), Hungary is already much better, but we still perform below the EU average (87 and 85). With regard to both indicators – at the municipal level – progress has been made in the use of ASP systems, given that municipalities can contact businesses through the Company Portal[35] and that municipal online administration is also at a high level.

Although Hungary does not reach the level of the EU average in the case of key indicators, significant progress has been made in a three-year comparison, and local government digitization ambitions are also significant.

4. Summarizing thoughts

We have dedicated our research to the examination of the municipal digitization segment of the Good State. In order to research this field, it was necessary to briefly discuss the Hungarian programs from the aspect of the municipality. The major part of our research dealt with the indicators, their cause and consequences, which included in the Good State and Governance reports and related documents. At the beginning of the study, we laid down two hypotheses, which we try to prove as a conclusion.

The first hypothesis was about municipal digitization developments that effectively contributed to the expansion of the Good State. However, previous facts need to be documented to support the hypothesis. As a result of various municipality developments, the municipality systems of Hungary were island-like.[36] There were municipalities that could afford a major development, but there were also those who only reached out to the systems in case of problems. This „diverse” system of municipalities was ended by the ASP system induced by the Magyary program 12. The unification of state administration tasks, although still ongoing today, laid its foundations in the early 2010s. This kind of centralization, unified access (both on the agent and customer side) can be expected for the ideal fulfillment of the Good State. The same service could be used by a citizen living anywhere in the country and any municipal civil servant could perform his or her tasks in the same standard system. The drastic and dynamic development of the background infrastructure at the municipal level has led to the achievement of the Good State.

The second hypothesis of this research emphasizes the complexity of the customer-side ASP system. We believe that in this digitized world a significant advantage is that the customer can handle their case fully online. In our opinion, this is possible due to the ASP system. We mentioned that the customer side of the ASP system can be accessed through the personalized administration interface, and here all the moments of administration can also be accessed online. So we can follow the administrative steps online from the submission of the application to the receipt of the decision. This is not an individual case in Hungary, but it is still more common when certain administrative acts can only be performed electronically. This administrative process is raised even higher by the already mentioned personalization. With this and other convenience features (e.g., form verification) it takes a fraction of the time for example to submit an application for municipal support than paper-based administration. We could also say that the ASP system has reached the peak from the customer side, but there is always more to come…

Examining the two hypotheses, we can state that based on the aspects examined in the study, we consider both hypotheses to be justified and believe that the ASP system is one of the best that could have happened to municipalities in terms of digital society and e-government. However, we emphasize that in the present essay only the digital point of view was relevant, additional benefits from ASP were not considered.

In summary, we can say that the development and extension of the ASP system has greatly contributed to the realization of municipal digitization in line with the goals of the Good State.

Gergely Cseh
assistant lecturer,
University of Miskolc Faculty of Law,
Department of Public Administrative Law

Czékmann Zsolt
Head of the Department
associate professor,
University of Miskolc Faculty of Law,
Department of Public Administrative Law

* This research was supported by the project nr. EFOP-3.6.2-16-2017-
00007, titled Aspects on the development of intelligent, sustainable and inclusive society: social, technological, innovation networks in employment and digital economy. The project has been supported by the European Union, co-financed by the European Social Fund and the budget of Hungary.

[1] Unlocking success in digital transformations (McKinsey & Company 2018) [2020.03.20.].

[2] Application Service Provider, ASP.

[3] Zoltán Magyary Public Administration – Development Program (Mp 11.0) (from now on: Magyary program 11). [2020.02.12.].

[4] Zoltán Magyary Public Administration – Development Program (Mp 12.0) (from now on: Magyary program 12).

[5] Pálné Kovács Ilona: Magyary Zoltán és a magyar közigazgatás, Tér és Társadalom 2011/3. 178.

[6] Public Administration and Public Service Development Strategy 2014-2020 2015. 4.

[7] The Organization for Economic Co-operation and Development (OECD) has been publishing the Government at a Glance report every two years since 2009. [2020.02.12.].

[8] [2020.02.12.].

[9] [2020.02.13.]

[10] [2020.02.12.].

[11] Magyary program 11. 5.

[12] Magyary program 11. 5.

[13] For more details on these see: Bencsik András – Fábián Adrián: Régi-új szereplők a területi államigazgatásban: járási hivatalok és kormányablakok, Új Magyar Köz­igazgatás 2014/2. 20–24. és Barta Attila: A területi államigazgatás változásai 2010–2014, Új Magyar Közigazgatás 2014/2. 1–7.

[14] Magyary program 11. 25.

[15] Magyary program 12 26.

[16] 257/2016. (VIII. 31.) Government Decree on the Municipal ASP system (from now on: ASP regulation) 1. § 6. municipal ASP system: supporting the performance of municipal tasks, an electronic information system providing a remote application service provider (ASP) over a computer network.

[17] Felber Zsófia: Az e-közigazgatási stratégiák és a megvalósítást szolgáló ÁROP és EKOP projektek. in: Agg János – Felber Zsófia – Kovács Tamás – Molnár Szilárd – Tózsa István: Az infokommunikációs technológia hatása a köz­igazgatás-tudományra. Nemzeti Közszolgálati Egyetem Közigazgatástudományi Kar, Budapest 2013. pp. 39–44.

[18] Gál András Levente: Gondolatok a Magyary Program 2020 elé. [2020.02.21.].

[19] Development strategy 23.

[20] Development strategy 55.

[21] Marsovszki Ádám: A közigazgatás története: Magyary­tól a Magyary programig, Jogelméleti Szemle 2018/3. 101.

[22] Implementation study of the DJP 2.0 adopted by the 1456/2017. (VII. 19.) Government Decision, 3.6.3. chapter, see: [2020.03.20.].

[23] Based on 4-5. annex of the ASP regulation.

[24] ASP regulation 3. § (2) ASP special systems: a) records management system, b) municipal settlement portal system, c) the electronic administration portal system, including the electronic form service, d) management system, e) immovable property system, f) municipal tax system, g) industrial and commercial system, h) nventory of the estate system.

[25] Fibinger Anita – Kádár Krisztián: Hatékony köz­igazgatás – Háttértanulmány a Jó Állam Jelentés Hatékony közigazgatás fejezetének 2017. és 2018. évi kiadásához. in: (Kaiser Tamás ed.): A Jó Állam mérhetősége III. Dialog Campus, Budapest 2019. 196.

[26] [2020.03.01.].

[27] Czékmann Zsolt – Cseh Gergely: Az elektronikus közszolgáltatások megvalósulása napjainkban Magyar­országon. in: Publicationes Universitatis Miskolcinensis Sectio Juridica et Politica, Tomus XXXVI/1. (2018) 37.

[28] Kádár Krisztián i. m. 169.

[29] Balogh Gábor – Barkóczi Dalma – Csótó Mihály – Fibinger Anita – Kádár Krisztián – Papp-Somlai Alexandra – Stelkovics Ákos – Tarpai Zoltán – Zsurka Zsanett: Az elekt­ronikus ügyintézés hazai helyzete 2018-ban – Speciális Jelentés, NKE Budapest 2019.

[30] Balogh Gábor – Barkóczi Dalma – Csótó Mihály – Fibinger Anita – Kádár Krisztián – Papp-Somlai Alexandra – Stelkovics Ákos – Tarpai Zoltán – Zsurka Zsanett i. m. 33. and 57.

[31] About SZEÜSZ see more: Czékmann Zsolt – Cseh Gergely i. m. and Budai Balázs – Gerencsér Balázs Szabolcs – Veszprémi Bernadett: A digitális kor hazai köz­igazgatási specifikumai, Dialog Campus, Budapest, 2018.

[32] Balogh Gábor – Barkóczi Dalma – Csótó Mihály – Fibinger Anita – Kádár Krisztián – Papp-Somlai Alexandra – Stelkovics Ákos – Tarpai Zoltán – Zsurka Zsanett im 124.

[33] Csótó Mihály: Mérni annyi, mint tudni? Az elektronikus közigazgatás közösségi mérőszámairól, Vezetéstudomány/Budapest Management Review 2019/2. 14.

[34] Statisztikai Tükör 2010/134. 1.

[35] 451/2016. (XII. 19.) Government Decree on the detailed rules of electronic administration 89. § (1) …storage provided to entity by the designated service provider…The entity has a Company Portal.

[36] Gergely Cseh: The effect of digital innovation on hungarian municipalities from 1950 to the present day. in: Publicationes Universitatis Miskolcinensis Sectio Juridica et Politica, Tomus XXXVII/1. (2019) 128. n