A substantial achievement resulting from economic and political changes in Hungary has been the development of the local government system. That sector of general government will have a key role in the process of accession to the European Union. In spite of some undoubted achievements in the local government system, it can be stated that one of the bottlenecks of the accession process is actually the local government sector. This paper is meant to analyse, from the perspectives of economics and finances, the experiences in the operations of the local government system in Hungary and make recommendations as to some possible further development options thereof.