Russia and Europe have a mutual stake in deeper cooperation. The EU is Russia’s most important trading partner—remarkably three times larger than trade with other post-Soviet (non-EU) states—and the administration of President Vladimir Putin, which seeks rapid economic modernization and growth, has upgraded the place of the EU in Russian priorities.

Europeans differ broadly in their attitudes towards Russia, but the EU recognizes that Russia presents “the most important, the most urgent, and the most challenging task that the EU faces at the beginning of the 21st century.”6 Besides depending heavily on Russian oil and gas supplies, the EU with recent and future enlargements will share borders or be in close proximity to Russia from the Arctic Circle to the Black Sea, an area fraught with tensions and crises. Perhaps as much to convince themselves, the two sides periodically reaffirm a “commitment to ensure that EU enlargement will bring the EU and Russia closer together in a Europe without dividing lines” for durable, peaceful engagement.7 At one level, the European approach appears to follow the multidimensional functionalist and institutional logic of gradually and indirectly reintegrating Russia into Europe and a stable post-Cold War order.8 But what are the driving forces of Europe’s long-term, incremental strategy—the pressures of interdependence and normative convergence or a preference to limit liabilities and a deliberate reluctance to institutionalize closer ties? This monograph argues that the latter contention better explains the record. Russians are embracing illiberal attitudes9 and moving

closer to the authoritarian model of a one-party state in lieu of converging on Western or European norms of democracy and human rights.10 Moreover, economic interaction is not spilling over into political and security integration. Lacking secure property rights and rule of law, Russian politics is preoccupied with the distribution and redistribution of property. Gaining political power is the surest means to capturing thestate’s resources and phenomenal wealth. The resulting competition and corruption militates against the consolidation of a repressive authoritarian regime, but it also affects foreign policy, for instance by favoring outcomes that keep oil prices high, such as prolonging the nuclear stand-off with Iran.

Institutionalist and liberal expectations that Russia would develop markets and democratic institutions rapidly and squarely choose modernization and integration into the interdependent, democratic community of nations foundered on the many obstacles to successful transitions in post-communist countries and the former Soviet Union, in   particular.11 Theorists who predict that the development of shared values leads to deep cooperation and harmonious relations similarly overestimated the degree to which norms

in Russia were changing during Perestroika and the first post-Soviet decade. Optimistic forecasts, such as Mikhail Gorbachev’s expectation that Russia would join a common European home, were grounded less in the construction of new identities and institutions, let

alone geopolitical realities, than expressions of wishful thinking. Even Russia’s 1992 application to the Council of Europe, the European organization imposing the least demands on new entrants, was delayed until 1996 when it was decided that “integration” and “cooperation” are preferable to “isolation” and “confrontation,” despite concerns that Russia fell short of European standards for democracy, rule of law, and human rights. Only 4 years later, in April 2000, the Parliamentary Assembly suspended Russia’s voting rights in response to reports of human rights abuses by Russian forces in Chechnya and recommended proceedings to expel Russia from the Council.12 Instead of promoting such common values as tolerance, mutual respect, and standards for safeguarding civil and political rights, Moscow has impeded the work of human rights nongovernmental organizations and constrained “the Council’s ability to promote normative socialization within the country.”13 Meanwhile, after pushing at the end of the Cold War for a leading role for the Organization for Security and

Cooperation in Europe (OSCE), the only Euro-Atlantic institution in which Russia has an equal voice, Moscow soured on the organization as it exposed electoral fraud in post-communist countries.

Institutional theory may be a poor predictor of the EU-Russia special relationship because it

10 over emphasizes the positive role of institutions to deal with problems of international cooperation while ignoring cases of costly, non cooperative standoffs or “non serious bargaining, where states ‘commit’ to vague agreements for various political purposes.” As James Fearon shows, the dynamics of such cases turn on a distributional problem about terms for any mutually beneficial bargain or concerns about the feasibility of monitoring or enforcement. The first problem is indicated when we observe “costly standoffs” in which the dispute has a war-of-attrition aspect, and the parties suffer the costs of holding out for better terms instead of striking a deal that would make both sides better off. Various possible agreements exist that the parties would prefer to no agreement, but they disagree in their ranking of them. Since this process involves uncertainty and private information, it is not uncommon for the two sides to engage in bluffing and misrepresentation of their true positions. In the second problem, even when the “shadow of the future” is long, the parties may think effective monitoring is infeasible, and incentives to renege will discourage any serious bargaining or lead to weak, preliminary agreements.14

The Russia-EU relationship involves both types of problems: (1) recurring costly standoffs in which the stronger side (the EU in most issue areas) demonstrates it can incur costs longer, such as the confrontation over Moscow’s initial refusal to extend the Russia-EU Partnership and Cooperation Agreement (PCA) to the 10 new EU members incorporated in 2004; and (2) uncertainty about future intentions, resulting in the establishment of vague interim arrangements, examples of which include the EU Common Strategy on Russia (1999-2003) and the plethora of “dialogues” (e.g., on political and security matters) and “action 11 plans” (to cooperate on combating organized crime, etc.) agreed upon at summits and other meetings. One important test of the bargaining model for special relationships is in the energy area, particularly EU Russia negotiations over a regulatory regime and liberalization of upstream and downstream markets and access to pipelines. The area of greatest mutual interdependence, energy cooperation, is a case in which Europe faces strong divergent national, political, and security considerations as well as asymmetries favoring Russia. Moscow possesses some energy trump cards and has been willing to hold out for a better deal than offered to date.

A second test is the development of the Four Common Spaces first initiated in 2003 at the St.

Petersburg EU-Russia summit—a common economic space (building on the notion of a common European Economic Space); a common space of freedom, security, and justice; a space of cooperation in the field of external security; and a space of research and education. To the extent that the common spaces remain abstract and unfulfilled ideas, with less potential for momentum and substance than even Europe’s Neighborhood Policy for engaging its regional partners on a nonmember basis, this constitutes shallow cooperation characteristic of special relationships. Such an outcome likely reflects an inability to resolve competing bargaining preferences. Given that Russia prefers equal partnership while the Europeans emphasize normative integration without membership, a shift in emphasis from the PCA to substantive progress on the four common spaces could signal a shift in the distribution of power, although both fit the special relationship model. The same pattern of bargaining problems is likely to influence any follow on agreement to the PCA which runs through 2007.

References:

6. Javier Solana, “The EU-Russia Strategic Partnership,” Stockholm: Council of the European Union, October 13, 1999.

7. “Joint Statement on EU Enlargement and EU-Russia Relations,” Brussels: European Commission, April 27, 2004.

8. Stephan De Spiegeleire, “Europe’s Security Relation with Russia: Staying the Course,” in Dmitri Trenin, Stephan DeSpiegeleire, and Angela Stent, “Russia’s Security Policy and EURussian Relations,” ESF Working Paper No. 6, March 2002.

9. See, for example, Sarah E. Mendelson and Theodore P.

Gerber, “Failing the Stalin Test,” Foreign Affairs, Vol. 85, No. 1,

January/February 2006, pp. 2-8.

10. For insightful accounts, see M. Steven Fish, Democracy Derailed in Russia. The Failure of Open Politics, New York: Cambridge University Press, 2005; Michael McFaul, “The Fourth Wave of Democracy and Dictatorship: Noncooperative Transitions in the Post-communist World,” World Politics, Vol. 54, No. 2, 2002, pp. 212-244; and Lucan Way, “Authoritarian State Building and the Sources of Political Competition in the Fourth Wave: The Cases of Belarus, Moldova, Russia, and Ukraine,” World Politics, Vol. 57, No. 2, January 2005, pp. 231-261.

11. Valerie Bunce, “Rethinking Recent Democratization, Lessons from the Post communist Experience,” World Politics ,Vol. 55, No. 2, 2003, pp. 167-192; McFaul, “The Fourth Wave;” and European Bank for Reconstruction and Development (EBRD) Transition Reports.

12. Russia’s voting rights were restored in 2001 after agreement to establish a task force on restoring peace in Chechnya. Nothing significant resulted, and both the European Court of Human Rights and the Parliamentary Assembly of the Council took up cases involving torture, executions, and other human rights violations

by Russian troops. See Pamela A. Jordan, “Russia’s Accession to the Council of Europe and Compliance with European HumanRights Norms,” Demokratizatsiya, Vol. 11, No. 2, Spring 2003; idem,“Does Membership have its privileges?: Entrance into the Council 88 of Europe and Compliance with Human Rights Norms,” Human

Rights Quarterly, Vol. 25, No. 3, August 2003, pp. 660-688; and William D. Jackson, “Russia and the Council of Europe: The Perils of Premature Admission,” Problems of Post-Communism, Vol. 51, No. 5, September/October 2004, pp. 23-33.

13. Jeffrey T. Checkel, “International Institutions and Socialization,” ARENA Working Paper, Vol. 99, No. 5; and Sarah E. Mendelson, “Russians’ Rights Imperiled. Has Anybody Noticed?” International Security, Vol. 26, No. 4, Spring 2002, pp. 39-69.

14. James D. Fearon, “Bargaining, Enforcement, and International Cooperation,” International Organization, Vol. 52, No. 2, 1998, pp. 268-305.

15. Stephen D. Krasner, “Global Communications and National Power: Life on the Pareto Frontier,” World Politics, Vol. 43, No. 3, April 1991, pp. 336-366; and Lloyd Gruber, Ruling the World:Power Politics and the Rise of Supranational Institutions, Princeton: Princeton University Press, 2000.