Milada Anna Vachudova: Passive and active EU leverage

Milada Anna Vachudova“Once a state becomes deeply enmeshed in the European Union’s pre-accession process, the high costs of pulling out of this process motivate even previously illiberal ruling parties to adopt a political strategy that embraces qualifying for EU membership.”

Milada Anna Vachudova is a specialist on the democratisation of post-communist Europe and EU enlargement. Having completed a D.Phil. at Oxford University, she was awarded fellowships and research grants from various prestigious universities including Harvard, Columbia and Princeton. She is now an Associate Professor of Political Science at the University of North Carolina at Chapel Hill and is working on a book comparing the experience of democratization and international engagement in the Western Balkans since 1995.

In her book “Europe undivided” Milada Vachudova explores two key questions related to eastern EU enlargement. First, what explains the variations in the political trajectories of Europe’s post-communist countries after 1989? Why did the Hungary and Poland do well, and why did Bulgaria and Romania lag dramatically behind? Second, did these trajectories later converge, and if so, to what extent was this a product of EU leverage?

Vachudova’s central thesis, as far as the first question is concerned, is that the initial political dynamics were largely determined by the strength of anti-communist opposition forces at the time of regime change. This had a strong influence non only on subsequent political developments, but also on the economic reforms and on harmful practices such as rent seeking:

“The transition to a market-based democracy creates the opportunity for elites to rewrite the rules of the polity and the economy all at once. In such an environment, politicians confront strong incentives to forsake political pluralism and economic liberalism in favour of rent-seeking strategies that channel benefits to narrowly defined interest groups at the expense of society as a whole.

Arbitrage opportunities for those in a position to mediate between the reformed and unreformed sectors of the economy include the liberalization of foreign trade with incomplete price liberalization, the liberalization of prices without market competition, and the privatization of companies without new controls on state credits and subsidies for production. As Hellman pointed out, the transition from a command economy necessarily creates some arbitrage opportunities because not all aspects of a fully functioning market economy can be put in place all at once.”

The presence of an organised opposition jump-starts the creation of a competitive political system, which in turn decreases the opportunities of rent-seeking elites. This was the case in Poland, Hungary and Czechoslovakia, where the rules of the political transition were negotiated between opposition leaders and the communist party officials. The absence of a strong, organised opposition as in Romania, Bulgaria and Slovakia created a political vacuum at the time of regime change that enabled non-opposition governments to hold power.

“In general, citizens in Romania, Bulgaria, and Slovakia were more suspicious of the market: the absence of an opposition to communism, or of a reforming communist party at the end of communism left these societies with a weaker consensus on the desirability of market capitalism. This made it easy for rent-seeking elites to win elections by promising slow, cautious reform.”

Vachudova distinguishes between passive and active EU leverage. Passive leverage, she says, comes down to the attractiveness of EU membership – the EU’s magnetism. Active leverage, by contrast, is understood as deliberate conditionality exercised in the pre-accession process.

For the first five years after 1989, the EU exercised only passive leverage, with widely differing results. While all governments declared EU membership as their key foreign policy goal, the governments of Poland, Hungary and Czechoslovakia began working to meet key EU requirements straight away; the governments of Bulgaria, Romania and (later) Slovakia, did not.

“The cost to governing elites of fulfilling the EU’s domestic requirements varied after 1989 according to their dependence on ethnic nationalism and economic corruption to win and keep political power. Fore illiberal governments, the costs of adapting domestic policies to EU requirements were too high. Their political power depended on domestic strategies that were incompatible with the EU’s requirements of liberal democracy and comprehensive economic reform.

For a few years, while there was only passive leverage, illiberal pattern governments could have it both ways. They could solicit EU membership as a matter of foreign policy, but practice economic and political rent seeking as the daily bread of domestic politics.”

This changed in the mid-1990s, when the EU started to apply what Vachudova calls “active leverage”. Thanks to clearer criteria, increasingly strict monitoring through the “avis”, the annual reports,¬†screening,¬†and the negotiation process itself, governments that only rhetorically supported EU accession were quickly exposed.

“The EU’s active leverage reinforces domestic political change: it elicits compliance as candidates seek to qualify for membership, and the process of complying transforms the polity, the economy and groups in society over the medium term. As candidates move through the pre-accession process toward membership, it becomes less likely that the polity will slide back by becoming less competitive or rolling back reform.”

EU’s active leverage is so powerful, Vachudova argues, because of three characteristics of the pre-accession process: asymmetric interdependence (membership was tremendously attractive and candidates needed EU integration for economic survival); enforcement (the requirements were huge and non-negotiable); and, most of the time, meritocracy (an applicant’s place in the enlargement queue had to correspond to the progress made).

“Governments would cease to devote so much political capital to meeting the requirements of membership if it was obvious that the quality of preparations for any individual candidate could be trumped by domestic politics in EU member states.

At least in principle, a merit-based accession process creates rules which tie the hands of governments not just in aspiring member states, but also in existing ones.”

Active leverage had an effect on the political system of at least some of the accession countries. While it most probably contributed to the fall of the illiberal governments of Bulgaria, Romania and Slovakia, Vachudova maintains that:

“the EU had much greater traction on domestic policy-making in Romania, Bulgaria, and Slovakia after illiberal ruling parties lost elections in 1996, 1997, and 1998 respectively. The opposition parties that took office had used the EU as a focal point for cooperation and had spent time adapting to the EU’s agenda for prospective members; once in office, they were tied to implementing this agenda by the expectations of the voters that progress would be made toward membership.”

Economic and administrative reform was the biggest effect of the EU’s active leverage:

“In all of the candidates for EU membership, the EU’s active leverage promoted reforms of the state and the economy … Governments had to reform in order to move forward in the EU’s pre-accession process. Moving forward in this process in turn served as a credible commitment mechanism for many economic actors that treated it as a guarantee of ongoing reform.”

Vachudova notes that “even when previous illiberal rulers were re-elected in Romania because of the failure of the ‘reformers’ to govern effectively, they did not return to (most) of their old ways, complying instead with EU rules.”

Looking at Vachudova’s analysis from today’s vantage point, the brakes that Slovenia, Greece and Cyprus currently apply on the accession process (because of bi-lateral issues) clearly undermine one of the basic principles of the EU’s leverage: meritocracy.

  • Milada Anna Vachudova, Europe Undivided. Democracy, Leverage, and Integration after Communism, Oxford Univ. Press, 2005.
6 July 2009