Comparing Central and Eastern Europe with the Western Balkans, Visnja Vukov argues that the EU’s governance of economic integration is a decisive lever of transformation. When the EU prioritises and credibly enforces these requirements, it constrains rent-seeking and weakens state capture. When the EU defers them, however, governments can entrench clientelist political–economic coalitions
Since Russia’s full-scale invasion of Ukraine, enlargement has returned to the centre of the European Union’s agenda. As Veronica Anghel argues in this series' foundational blog, Europeans consider enlargement a strategic necessity rather than a discretionary policy choice. The question, then, is not whether the EU enlarges, but how. It is also whether enlargement can still deliver what it once promised: a stronger, more resilient democratic polity.
The EU’s record offers a sharp contrast. As Milada Vachudova reminds us in this series, many regard the ‘big-bang’ enlargement to Central and Eastern Europe as the EU’s most successful foreign policy tool. They consider it evidence that conditionality can support democratic consolidation. Others, including Jelena Džankić, show that in the Western Balkans, by contrast, EU leverage failed, reforms stalled, and state capture hardened. Explaining this divergence is a prerequisite for getting the next enlargement right.
My recent Journal of European Public Policy article argues that the governance of economic integration is a decisive – and often neglected – component of EU enlargement. It helped strengthen Central and Eastern European domestic institutions, but its relative weakness has contributed to the Western Balkans’ weaker transformation.
In Central and Eastern Europe, the EU prioritised building state capacities to govern the economy – state aid control, development policy, or public procurement – early in the process. This reduced governments’ ability to protect politically connected firms, deepened integration with the EU market, and strengthened domestic coalitions with a stake in accession and the reforms it required.
Unlike in Central and Eastern Europe, in the Western Balkans the EU gave lower priority to market integration, leaving economic governance underdeveloped
In the Western Balkans, by contrast, weaker EU demands and the lower priority given to market integration left economic governance institutions underdeveloped and politicised. Rent-seeking alliances and clientelist ties between political and economic elites therefore persisted, undermining both political reform and longer-term development.
In Central and Eastern Europe, EU demands for market reform were central to the accession process. But in the Western Balkans, other priorities often took precedence: stability, good neighbourly relations and, more recently, alignment with EU foreign policy.
In Central and Eastern Europe, the EU pushed strongly for economic restructuring and for building institutions capable of implementing EU market rules. In the Western Balkans, by contrast, conditionality focused primarily on judicial and rule-of-law reforms. Areas such as state aid control and development policy, meanwhile, were deferred to later stages.
Accession preparations in Central and Eastern Europe focused on market reform. But in the Western Balkans, conditionality focused primarily on rule-of-law reforms
The same divergence is visible in pre-accession funding. Assistance in Central and Eastern Europe supported institutional and economic preparations for membership, while funding in the Western Balkans was more loosely linked to accession and concentrated on growth and infrastructure.
The implications are clearest when comparing Romania and Serbia.
Under EU pressure, in the early 2000s Romania strengthened key institutions for governing the economy – including the Competition Council, development agencies, and public procurement bodies. Combined with depoliticised implementation, these reforms constrained the rent-seeking networks that had flourished in the 1990s. Romania’s growth model shifted accordingly, relying increasingly on foreign direct investment from Western multinationals.
This transition came with costs – weaker trade unions and widening regional inequalities among them. Yet it helped loosen entrenched ties between political and economic elites. It also expanded the set of actors with a stake in EU membership. Even firms linked to the former communist party began to see opportunities in Western investment as older channels of state support narrowed. The result was greater reform continuity: economic and political reforms advanced through accession negotiations despite changes in government. Romania’s institutions remain imperfect, but they function more effectively than those in much of the Western Balkans.
Serbia’s pre-accession process produced few comparable effects. As the stabilitocracy literature argues, EU engagement prioritised stability while democratic reforms were often treated as secondary. Market reforms and the strengthening of economic governance institutions received even less attention.
The consequences were predictable. State aid bodies remained politicised and continued to favour firms close to the ruling party. Development funds kept channelling credit to well-connected business groups. EU funding, meanwhile, focused less on restructuring and institutional reform and more on infrastructure projects. Rent-seeking networks therefore endured, and state capture persisted despite formal conditionality.
In practice, the accession process left the core levers of Serbia’s crony capitalism intact. It also enabled the reproduction of societal coalitions with limited stakes in EU membership. This persistence of patrimonial capitalism, coupled with rising investment from non-European actors, helps explain why domestic demand for accession has remained weak – and has, over time, even declined.
Ukraine and Moldova are now on the enlargement horizon. Once again, the EU faces the challenge of integrating countries marked by corruption, economic underdevelopment, and fragile democratic institutions – problems often sustained by clientelist ties between political and economic elites. The central lesson from past rounds is that economic transformation cannot be treated as a technocratic add-on. Strengthening the state’s capacity to govern the economy should receive greater attention. Moreover, it should come early in negotiations, because it can reshape state–society relations and increase domestic demand for political reform.
The EU must beware of treating economic transformation as a technocratic add-on. Instead, it should come early in negotiations
Where the pre-accession process constrains rent-seeking and deepens ties with the rest of Europe, domestic reformers are more likely to build durable coalitions in support of integration and the reforms it requires. Where economic governance is deferred, by contrast, clientelist structures tend to harden. This renders political reforms harder to implement, and easier to reverse. Over time, that approach risks undermining not only democracy, but also development, inside an enlarged EU.
