International incentives to Hungary and Romania after the Cold War
Western economic incentives to Hungary and Romania in the early 1990s to resolve their border dispute and improve their treatment of minorities presents another case of the use of economic incentives to achieve significant objectives. Consequently, policy success would once again challenge the realist model (R). Here, too, the incentives had a non-trivial economic impact, especially for economically challenged post-Communist states, so the commercial liberal model (CL) would find it difficult to explain an economic statecraft failure. This case differs from the previous chapter’s, however, since it involved target states with varying regime types. As we shall see, Hungary during this period was considered a democracy, whereas Romania was not. Thus, this case will shed some light on whether regime type affects the utility of economic statecraft as conditionalist regime model (CR) suggests. This chapter investigates the utility of these models, as well as our own TSI and stateness model in explaining the success of Western economic incentives in stabilizing Hungarian-Romanian relations. We follow the same steps as in the previous chapter. The first section presents a brief background on the case. In the second section, we discuss the nature of American and European Union economic incentives to Hungary and Romania. The third section examines the likely impact of compliance on Hungarian and Romanian TSI. We then investigate the two targets’ degrees of stateness. The fifth section evaluates whether the goals of economic statecraft were successful in this case. Finally, we examine what factors explain this outcome. The chapter concludes with a consideration of what this case, on its own, suggests about the four competing models of economic statecraft.