Th is paper provides a polemic interpretation of recent Hungarian public-administration reforms compared to the opinions that can be found in international scientifi c literature. Th e divergence of the various interpretations stems from the diff erent perspectives on the historic context of the development path of the Hungarian municipal administration during the pre-and post-regime change period. Th e differences in the interpretation of the achievements of the regime change determine whether one would suggest a minor correction or a total replacement -if given the possibility. Aft er briefl y describing the public-administration legacy of the communist past and of the post-communist decades, the article delves into the analysis of the fi nancial unsustainability of the highly decentralized local-government system. Th e analysis builds on the fi ndings of international fi nanciers that operate as policy-transfer powerhouses, as well. Bursting fi nancial tensions led to Hungary's loan agreement with the IMF in 1996. Although the loan was paid back by 1998, internal systemic ineffi ciencies stemming from the uneasy compromises of the regime change still had their corroding eff ect, although vulnerable fi nances were veiled by occasional conjunctures in the domestic and international economy. In the year 2008, the country became virtually insolvent and again applied for an IMF loan. Th e IMF itself formulated certain measures to increase the effi ciency of the overdecentralized local-government system. Unlike its predecessor, the government that stepped into power in 2010 had the political power to launch systemic corrections in the local-government system. Th e reforms contained a trade-off : the majority of local competences in exchange for fi scally consolidating local governments. Th is is labeled as a trade-off between effi ciency and democracy by certain authors. It is a fact that the overdecentralized form of local public administration was ineffi cient and unsustainable. Now there is an opportunity to test whether an overcentralized public administration would be effi cient.