The External Incentives Model Embedded: Evidence From the European Union's Eastern Neighbourhood

The external incentives model (EIM) proved highly compelling in explaining Europeanization and rule adoption in countries from Central, Eastern and Southeast Europe. Building on the EIM, the present article seeks to contribute along three key objectives. First, it proposes to re‐evaluate the EIM for the Eastern European Neighbourhood Policy (ENP) region: Armenia, Azerbaijan, Georgia, Moldova and Ukraine. Second, the paper introduces a conceptual distinction between domestic transformation costs and regulatory costs. Third, it integrates and evaluates the EIM in a broader framework, incorporating domestic and alternative international conditions. The paper combines theory‐guided case comparisons and panel data analysis, based on a dataset with evidence collected from the Eastern ENP countries. The study corroborates the EIM and finds that higher domestic transformation costs lead to lower levels of democratic development and a positive cost–benefit balance of transformation, on the other hand, tends to encourage democratic consolidation in the Eastern ENP region.