As noted, EU conditionality occupies a core position by constituting the independent variable in the explanatory models put forward by most scholars interested in the domestic impact of European integration in post-communist space. Yet, as cautioned by Johan Olsen (1996: 271) domestic transformation may occur on the basis of a „multitude of co-evolving, parallel, and not necessarily tightly-coupled processes‟. Therefore, the study of
„Europeanisation‟ does not accommodate easily „the language of dependent and independent variables and the logic of regression analysis‟ (ibid). Identifying the dependent variable - here the domestic institutional development in light of the European integration incentives - and intervening variables - the domestic and EU contexts - is relatively a straightforward task. However, indicating ex ante the main independent variable in a social context characterised by multiple endogenous and exogenous pressures for development is more complicated. More than one independent variable converging in a given point of time may contribute to the same outcome. Put differently, „Europeanisation‟
may either be a sufficient (i.e., the only independent variable) or a necessary (one important among many independent conditions) factor in a particular chain of institutional development. In situations where „equifinality‟ is present alternative independent variables to EU incentives contribute to the same outcome. Therefore, accounting for
„multi-85
causality‟ poses significant strains in a positivist and variable-centred explanatory framework. Disentangling the relative causal weight of conditionality requires thus careful process-tracing and time-oriented analysis (see Introduction).
In this context, drawing on the literatures of „Europeanisation‟ and „Transition‟, an indicative set of variables located at both sides (EU-domestic) is offered below as a useful guide in making sense of the processes of Europeanisation and institutional development in the case of Croatia. Insights from both RCI and HI are used here given that this study departs from the common assumption that the domestic institutional context processes external (and internal) reform incentives shaping accordingly the domestic responses to them.
3.7.1. EU-side variables
Credible Conditionality: Conditionality refers to the multiple rules set by the EU as conditions that candidate states have to fulfil in order to receive rewards from the EU. As noted, credibility has a dual meaning as it refers both to the EU‟s threat of withholding the rewards in case of non-compliance and promise to deliver the reward in case of rule adoption (Schimmelfennig and Sedelmeier, 2005b: 13). Apart from the „democracy‟ and
„acquis conditionality‟ (Schimmelfennig and Sedelmeier, 2005c, 2007) phases, Hughes et al. (2004: 26) suggested a further distinction in the nature of conditionality between (i) formal conditionality „which embodies the publicly stated preconditions as set out in the broad principles of the „Copenhagen criteria‟ and the legal framework of the acquis’ and (ii) informal conditionality „which includes the operational pressures and recommendations applied by actors within the European Commission to achieve particular outcomes during their interactions with (candidates states) in the course of enlargement‟. Both typologies offer useful insights to the complex nature of conditionality, and will therefore guide this study.
Determinacy and salience of conditions: Regarding determinacy, the clearer the behavioural implications of a rule and the more „legalised‟ and binding its status, the higher its determinacy (Schimmelfennig and Sedelmeier, 2005b: 12). As for salience, the likelihood of rule adoption increases when the EU pays increased attention to a given area subject to conditionality (Grabbe, 2006).
86 3.7.2. Domestic-side variables
Institutional Legacies: In general, the notion of legacies denotes the persistence and shaping power of material (e.g., formal institutions) and non-material (e.g., culture, habits) priors inherited from past political and social institutional contexts. In the case of post-communist Europe, the concept reflects primarily (though not exclusively) post-communist (material) institutional legacies. In the case of Croatia, however, the scope of the notion will extend further in the immediate post-communist period (1989-1999) in order to capture the particular mode of regime change, the violent dissolution of Yugoslavia, and the authoritarian ten-year rule of nationalists. Two particular structural features are assumed to play a decisive role in shaping EU influence in terms of post-communist heritage: the war legacies and the authoritarian/nationalist cult of government of the ruling Croatian Democratic Union (HDZ) under President TuĎman between 1990 and 1999. In this respect, the existence of strongly embedded institutional arrangements [(pre-) communist and post-communist] in an issue-area subject to EU conditionality strongly influences actors‟ reform strategies by shaping the menu of (their) institutional choices (Pierson, 2004). Accordingly, „any revisions that do occur will often be powerfully constrained and channelled by previous institutional choices and the processes those choices unleash‟ (Pierson, 2004: 152). When political institutions „form a complicated ecology of inter-connected rules‟ (March and Olsen, 1989: 170) massive increasing returns (North, 1990: 95), that is, positive reinforcing feedbacks, will make path dependence and/or „bounded transformation‟ a common feature of institutional evolution. Thus it is assumed that: given particular starting points, particular „choices‟ or forms of development may be „bounded‟ within established paths (cf. Weir, 1992; Thelen, 2004; Pierson, 2004).
Actors’ strategies: The focus on institutional legacies helps to clarify the role of structural constrains on purposeful agency. At the same time, the role of political and policy leadership needs to be explored and the relevant processes identified. Grabbe (2006: 206) argues that the political will to produce change in light of EU conditions is a key factor in shaping the actual scope of „Europeanisation‟ effects. EU conditionality both constrains and empowers domestic actors (Schimmelfennig and Sedelmeier, 2005b). The ways in which actors respond to EU impulses must be interpreted thus as sensitive to strategies, tactics, and bargaining (cf. Featherstone and Papadimitriou, 2008). EU stimuli may work
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either directly on the target government (which then weighs its „moves‟ in a cost-benefit fashion) or indirectly via the differential empowerment of domestic actors who then use European developments „from below‟ to shape domestic responses (Schimmelfennig and Sedelmeier, 2005b: 11-12; Börzel and Risse, 2003, 2007). Accordingly, the weaker the political will to reform, the slower the process of institutional development is.
Reform Capacity: In the mainstream „Europeanisation‟ scholarship the notions of „veto-points‟ and „integrated political leadership‟ converge in the umbrella concept of ‘reform capacity‟ (Héritier, 2001a: 10). According to Héritier and Knill (2001: 258), a country‟s reform capacity is „determined by the number of formal and factual veto positions that need to be overcome in order to realise a decision, and by the degree to which that country enjoys politically integrated leadership‟. Integrated political leadership can be provided by
„formal majoritarian hierarchical government or by a long-standing and successful practice of consensual decision making that incorporates or reconciles diverging interests‟ (ibid).
Thus, „the more fragmented the political leadership and the larger the number of veto points is, the slower the speed of adaptation becomes‟. Similarly, the more densely populated an institution and/or policy-area is by veto-players incurring net adoption costs and/or veto positions requiring legal modification, the more difficult and chronic EU rule adoption becomes. However, given the pervasive power of EU conditionality and the government‟s commitment to membership, „veto-players and/or points are assumed to affect only the speed and timing of compliance, but not the likelihood of rule adoption per se‟ (Schimmelfennig and Sedelmeier, 2005c, 2007).
Administrative capacity: According to Börzel (2002, 2009), Noutcheva and Bechev (2008), and Grabbe (2006) the capacity of a state to respond to EU pressures depends also on its administrative capacity and resources. Among others, administrative capacity refers to staff power, financial resources, expertise, coalition building skills and concentration of competencies (Bursens and Deforche, 2008: 6). All of these can influence a state‟s timely response to EU impulses. The implication is that, the more administrative capacity, the higher the chance of fast and effective rule adoption.
3.8. Conclusion
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This chapter reviewed a broad array of both „top-down‟ Europeanisation and „bottom-up‟
post-communist transition explanatory frameworks in order to locate the crucial variables to explaining Croatia‟s domestic institutional evolution under foreign (most notably EU) direction. Most candidate-Europeanisation approaches point towards patterns of domestic transformation in light of EU conditionality. In contrast, transition theories draw attention to the mediating power of historical legacies in shaping post-communist transformation trajectories in CEE. Put otherwise, while Europeanisation provides for a „European route‟
to domestic institutional development, transition theories define domestic structural and actor constellations with an opposite starting point to that of „Europeanisation‟. As such, the two perspectives can be viewed as two sides of the same coin: each concerned with what is not covered by the other [a similar pluralist perspective has been applied by Featherstone and Papadimitriou (2008) in the case of Greece‟s „Limited Europeanization‟].
It was argued that, although both literatures have provided important heuristics, a more rounded „bottom-up-down‟ explanation sensitive to the process of EU rule „politicisation‟,
„resilience‟ and „institutionalisation‟ is needed in order to compensate for the limitations of both literatures. To that end, drawing from RCI and HI accounts alike, this chapter introduced two additional to „Europeanisation‟ concepts, that is, the notions of „embedded rationality‟ and „institutional development‟, in order to offer a „thicker‟, time-sensitive and
„contextual‟ theoretical explanation (cf. Pierson, 2004: 167-72) to the multi-faceted process of institutional development under foreign (primarily EU) influences.
The next chapter discusses Croatia‟s road to EU membership. Both the European and the domestic context are assumed to influence the sequencing and nature of institutional development in Croatia.
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4
Croatia’s Sluggish Road to EU Membership
4.1. Introduction
This chapter focuses on Croatia‟s long and „sluggish‟ politics of „Europeanisation‟. In particular, it explores the historical relationship between Croatia and the EU since the early 1970s, from the Trade and Cooperation Agreement and Regional Approach, through to Croatia‟s Stabilisation and Association Agreement, application for membership and accession negotiations. It provides an understanding of the domestic and external dynamics that contributed to the country seeking EU membership and the various hurdles to such a goal. It also describes the positions of various EU states and institutions on the country‟s accession process.
90 4.2. The Communist Era
Prior to the collapse of Yugoslavia, socialist Croatia was the second, most prosperous and industrialised republic in the Federation, trailing only Slovenia, with a per capita output perhaps one third above the Yugoslav average (cf. Goldstein, 1999: 173-76). Owing to Yugoslavia‟s unique economic system in the communist world based on „workers‟ self-management‟, decision-making in Croatia had been devolved to enterprise managers and workers who operated in a relatively free market environment (Bartlett, 2003: 31). At the same time, compared to the other communist countries of CEE, the Croatian economy was open to trade and the visa-free movement of labour with both the West and East (Goldstein, 1999: 174). And compared to the other republics that comprised the Yugoslav federation, Croatia was, alongside Slovenia, far more integrated into European networks due to its Hapsburg legacy, geopolitical proximity, its strong export production and tourist industries (Woodward, 1996: 20).
For all these reasons and unlike the other CEECs, Croatia commenced its response to Europeanisation well ahead of independence in 1991. In particular, Croatia benefited from a non-preferential Agreement with the European Economic Community (EEC) signed in Brussels in 1970. This agreement covered a period of three years and expired on 30 April 1973. It was succeeded by a five-year Agreement signed in the same year, which was in force until 30 September 1978. Under the terms of this Agreement the two parties accorded each other most-favoured-nation treatment. The Agreement contained an „evolutive‟
clause. Yugoslavia and the Community were to develop economic cooperation as a complementary element to trade in areas of mutual interest in light of developments in the Community‟s economic policies. Negotiations between the Community and Yugoslavia were resumed in Brussels on 2 and 3 July 1979, with a view to the conclusion of a Trade and Cooperation Agreement to replace the 1973 five-year Agreement. The Agreement was finally signed in 1980 and covered a wide range of fields including agriculture, trade, tourism, energy and scientific and technological research (European Commission, 1979).