The Social Context in Conditionality: Internationalizing Finance and Defense in Postcommunist Europe

Epstein, Rachel. (2007) The Social Context in Conditionality: Internationalizing Finance and Defense in Postcommunist Europe. In: UNSPECIFIED, Montreal, Canada. (Unpublished)

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Abstract

This paper theorizes the conditions under which states are likely to comply with the policy prescriptions of international institutions. Two groups of explanations dominate the literature: 1) that states comply because of the power of incentives and 2) that states comply because they are persuaded by the power of arguments. I provide an alternative ‘hybrid’ approach and suggest that incentives elicit their intended effect only within a specific social context. This context is defined by the uncertainty of domestic actors, the perceived status of international institutions and the credibility of the policies in question. Degrees of uncertainty, hierarchy and credibility imbue incentives with meaning that, from the perspective of domestic actors, make them worthy of compliance or not. Compliance outcomes over time and across counties correspond more consistently to variation in the social context in connection with incentives than to incentives taken on their own. In this chapter, I propose to test the argument in four areas: the democratization of civil-military relations, the denationalization of defense planning, the institutionalization of central bank independence and the internationalization of bank ownership. I briefly address outcomes in four countries: Poland, Hungary, Romania and Ukraine.

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