Incentives are everything. Since its founding in 1993, the European Union (EU) has understood this and become a master of soft power pressure and incentive-based democratic reforms. Indeed, as much as the European Union began as an economic union, it has taken on another, more abstract, dimension: the instillation of democratic values in its neighborhood through soft power initiatives.
As an economic space founded upon the idea of free trade with mainly Western European, wealthy, and powerful countries, accession to the EU is an enormous motivator for developing and less wealthy countries in the EU’s neighborhood. This motivator, understandably, has been shown to become much less powerful once countries have acceded to the European Union. Thus, in order to avoid this incentive problem, the European Union should try and fully democratize countries well before their accession to the EU.
The European Union has perfectly understood its desirability and its position on the world sphere. For many countries—particularly former members of the Soviet bloc such as Hungary, Romania, Bulgaria, Ukraine, and others—EU accession means access to 450 million consumers and 22.5 million small and medium sized enterprises. Not only that, but it potentially means border-free access to other European countries, allowing for the free movement of talent and capital. The European Union recognizes this and uses access to the European single market as leverage in its attempts to reform and democratize its neighborhood by inspiring reform in the judiciary, the civil service, and other government institutions where political “inertia” would otherwise block change. Indeed, European accession has been cited by scholars as one of the most effective and rapid mechanisms to implement reform in neighboring countries, as it sets forth clear rule of law criteria for entrance into the Union as well as financial and technical support to achieve these criteria.
Evidently, the European Union’s leverage hinges upon the incentive of EU accession. Thus, it has been argued that once a country accedes to the EU, and therefore no longer has that incentive, the leverage and capacity of the EU to implement reforms is greatly reduced. This is compounded by the fact that measurement of compliance for the EU is based on adopting legislation, rather than its enforcement and implementation – meaning that failures to correctly implement policies post-accession are criticized but, in general, go unpunished. According to Lipset in his article, Some Social Requisites of Democracy, democratic stability is based upon the “effectiveness and legitimacy” of the political system. It then follows that, if the failure to effectively and legitimately implement policy is not punished, then democratic stability will not ensue, and the European Union will have failed at democratizing a country through soft power.
Take Hungary for example – while the EU’s leverage was able to reform Hungarian government institutions prior to its accession, the EU now has far less leverage with regards to Hungary’s post-accession democratic backsliding, demonstrating the EU’s incentive problem. At the time of its accession to the EU in 2004, Hungary was hailed as the prime example of EU leverage. Indeed, prior to accession, the country had made astounding and rapid progress towards democratization through economic success and rule of law reforms, protecting human, commercial, and civil rights thanks to the bureaucratic and technocratic experience of its post-communist elites. More recently, under the direction of Prime Minister Viktor Orbán, Hungary has taken a turn towards authoritarianism, with executive attacks on the media as well as the legislative and judicial branches; using constitutional powers of the Prime Minister to erode democratic institutions and reduce opposition. The European Union, having caught on to this trend, recently warned of anti-democratic tendencies in the executive commission’s first report on rule of law adherence in Europe. Reports such as these are one of the EU’s means to exert soft power pressure on its members in order to keep them in line with EU ideals and values. However, upon the release of this report and public chastising by the Union, Hungary denied all allegations and dismissed the report as irrelevant and biased, demonstrating their complete disregard for European opinion and pressure. Condemning Hungary and calling them out for authoritarian tendencies has not incentivized Hungary to enforce democratic norms and values, as their EU member status is too difficult to rescind to pose a current credible threat to the country’s elites.
accession to and association with the European Union remains an incredibly
powerful tool in the EU’s foreign policy arsenal, the leverage it gains from it
is conditional on the accession of a country to the European Union. The case of
Hungary demonstrates the EU’s lack of leverage after a country’s accession.
Although Hungary was a stable democracy upon entering the EU, the Union’s
inability to prevent its erosion further proves the need for the EU to
democratize countries well before they accede in order to fully implement a
 Vachudová, Milada Anna. “Corruption and Compliance in the EU’s Post-Communist Members and Candidates.” Journal of Common Market Studies 47 (September 1, 2009): 43–62. https://doi.org/10.1111/j.1468-5965.2009.02013.x.
 Vachudová, Milada Anna. Europe Undivided: Democracy, Leverage, and Integration After Communism. Oxford: Oxford University Press, 2005.
 Guasti, Petra, and Bojan Dobovsek. “Informal Institutions and EU Accession: Corruption and Clientelism in Central and Eastern Europe.” Reykjavik, 2011. https://ecpr.eu/Filestore/PaperProposal/55210a55-9335-4431-a0f6-d06a1097aca4.pdf.
 Lipset, Seymour Martin. “Some Social Requisites of Democracy: Economic Development and Political Legitimacy.” The American Political Science Review 53, no. 1 (March 1959): 69–105.
 Varol, Ozan. “Stealth Authoritarianism.” Iowa Law Review 100 (n.d.): 1673–1742.