In the past decades, exacerbating regional disparities in the European Union as well as the newly joined Eastern European states have led to a growing interest in examining the spatial embeddedness of development. Hungary, a small and very monocentric country, has experienced rapid growth in the region of its capital city and its surrounding, whereas formerly lagging regions continued to fall behind. This thesis examines growing regional disparities in Hungary in order to provide a more comprehensive overview of the phenomenon and synthesise a growing body of both Hungarian and international literature based on their relevance for Hungary. As regional disparities rarely form an explicit research subject, the first aim of this thesis was to establish a suitable method for a comprehensive national level analysis. Within a mixed methodological framework, three theoretical perspectives on regional development were selected to analyse and reveal structural disparities, which were set in contrast with GDP levels of regions. On the one hand, the method proved to be useful to establish a refined rank order of the regions based on their approximated level and speed of development. On the other hand, the three different perspectives revealed structural strength and weaknesses underlying general development level of regions. The results did confirm the multiple advantages of the most developed regions, as well as the complex disadvantage of the most backward regions. Based on this experience a further increase in disparity levels can be expected in Hungary. Regions between the two extremes showed more heterogeneous outcomes across the perspectives, revealing very different development path and structural problems behind the performance level of these regions. Taken together, these findings support the heightening need of decentralization in Hungary, in order to tackle growing regional disparities and establish policy responses at a regional level.

Regional development discourses and theories have significantly changed since the born of regional science. Focus of regional development theories has shifted from industrialization efforts via large-scale enterprises and transfer of central government funds to disadvantaged regions to endogenous capabilities and potentials of innovation and knowledge creation. Endogenous factors and self-development capabilities are highly emphasized by recent development literature. Changes in the regional development discourses also affected regional policies, policy tools and actors / endogenous factors and self-development discourses became dominant in regional development policies and implementations. However, source of regional development for less developed regions that do not have endogenous potentials and self-development capability have not clearly defined and have not empirically tested. The thesis attempted to empirically define regional growth factors and the usefulness of theoretical frameworks. In the thesis, econometric model of Turkey is used for the empirical study. The theoretical framework discussed in the thesis is both economic theories and regional development models. The study shows that all theoretical models offer only partial explanations of regional growth. While study shows that factors emphasized by traditional theories support regional growth, the study has no evidence supporting that soft factors emphasized by recent theories support regional growth. The main findings of this study contribute to theoretical and empirical field by reintroducing role of government and interventions. Factors highlighted by recent regional development theories are not sufficient for explaining growth, since the regional policies at the national level continue to be important therefore factors emphasized by traditional theories still have significant contributions to growth.