The Goals and Consequences of the Centralization of Public Education in Hungary
Authors: Semjén András , Le Marcell , Hermann Zoltán 
Published: January 2019

Introduction:
A robust process of centralization in education administration and school finance has taken place in Hungary in the course of the present decade. The governance, control, and funding of schools has been taken from local government by the state, and the autonomy of headmasters and teachers has diminished. However, neither the objectives of, nor the motives behind this centralization seem to be completely clear. This paper aims to contribute to the clarification of these objectives and motives, and explores whether the reform has been successful in achieving its declared objectives.

Methods:
The clarification of the objectives and motives relies not only on an analysis of the existing literature, but on the textual analysis of various legal texts, together with the use of structured research interviews and press interviews with education policy makers and people working in education administration. Simple statistical methods (including inequality measures and concentration indicators) are employed to determine the impact of the centralization process via the analysis of administrative data on school finances, teacher earnings and student performance.

Results:
It was found that while the declared objectives of the centralization included the reduction of inequalities in resource availability and teachers’ wages, and an improvement in equality of educational opportunity, in the first two post-reform years there was a significant drop in the level of resources per student, resulting in a slight increase of inequality of resources. A drop in expenditure may in principle indicate a growth in efficiency, but in this instance this seems actually to have been achieved at the expense of shortages and other school-level problems with a negative effect on the quality of education.

Discussion:
The usual requirements to be observed in public sector governance reforms were deliberately neglected, and the reform was carried through in the absence of any pilot study or systematic impact assessment. This is all the more problematic as the recent literature on the experience of other countries does not provide unanimous support for centralization. Further, given the declared objectives of the reforms, it is rather remarkable that no systematic monitoring of results was put into place.

Limitations:
The analysis offered here is confined to the short term effects of the reform. A more complete evaluation of the reform will only be possible later, when the longer term effects of the process become clear. The relatively short time since the reform does not allow the definitive identification and evaluation of the effects of the centralization on student performance. However, the short-term effects on inequalities in school finances and teacher salaries are worth investigating at this point. The limited availability of school budget data from the pre-reform period restricts somewhat the reliability of the analysis of the effects of the reform on school expenditure. A further limitation is that the statistical analysis presented here is restricted to basic schools2 only, in the interests of simplifying comparisons. However, a preliminary analysis of secondary schools showed very similar patterns.

Conclusions:
The empirical results are to a certain degree inconclusive. As far as school funding is concerned, the inequality of funding increased right after the centralization, then stagnated and started to diminish significantly only after 2015. At the same time, from the perspective of school funding per student on the basis of the income of various local authorities, the results seem somewhat more satisfactory, and it is possible to identify some positive effects in this respect.