Abstract
The article imports insights from prospect theory into the study of integration choices of ruling elites from Eastern Partnership countries. It introduces the notion of multi-attribute reference points and provides an example of identifying their coordinates, against which ruling elites from Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine are expected to consider distinct integration choices: the European Union or Eurasian Economic Union. The research finds that ruling elites from Eastern Partnership countries with the lowest levels of affluence, with medium to high intensity conflicts with Russia and with lower, but still non-trivial costs of domestic transformation have tended to be risk-seeking and opted for the European Union as an integration choice. However, ruling elites from Eastern Partnership countries with low and medium levels of affluence, with no conflict with Russia and with medium to high costs of domestic transformation have tended to be risk-averse and selected the Eurasian Economic Union as an integration option.
Highlights
After fully completing negotiations over the content of the Association Agreement (AA) with the European Union (EU), Armenian President Serzh Sargsyan took many observers by surprise when he announced in September 2013 that Armenia was suspending the association process to the EU and opting instead for integration into the Eurasian Economic Union (EAEU)
This behavioural inclination appears to be confirmed by Georgia, Moldova and Ukraine in 2014, which have multi-attribute reference point (MARP) with low coordinates on all three dimensions and where ruling elites proved to be risk-acceptant while opting for integration into the EU
The choices of ruling elites from Eastern Partnership (EaP) countries to embrace distinct regional integration projects took place in a dynamic material and security context, which defines the coordinates of cross-country MARP against which alternative regional integration outcomes could be considered
Summary
After fully completing negotiations over the content of the Association Agreement (AA) with the European Union (EU), Armenian President Serzh Sargsyan took many observers by surprise when he announced in September 2013 that Armenia was suspending the association process to the EU and opting instead for integration into the Eurasian Economic Union (EAEU). The theoretical prediction informed by prospect theory is to expect risk-seeking propensities in cases where the reference points are coded in the domain of losses This behavioural inclination appears to be confirmed by Georgia, Moldova and Ukraine in 2014, which have MARP with low coordinates on all three dimensions and where ruling elites proved to be risk-acceptant while opting for integration into the EU. The reference position, against which ruling elites from EaP countries are expected to select distinct integration options, can be conceived of as varying on the following three core dimensions: economic affluence, the history of conflict with Russia and the domestic costs of (democratic) transformation. The absence or presence of conflict with Russia, and variable costs of democratic transformation jointly signpost the location of MARP, which are expected to anticipate distinct risk propensities and regional integration choices of incumbent elites from EaP countries (see Figure 1)
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