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Small State Autonomy in Hierarchical Regimes. the Case of Bulgaria in the German and Soviet Spheres of Influence 1933 – 1956

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Small State Autonomy in Hierarchical Regimes. the Case of Bulgaria in the German and Soviet Spheres of Influence 1933 – 1956 Small State Autonomy in Hierarchical Regimes. The Case of Bulgaria in the German and Soviet Spheres of Influence 1933 – 1956 By Vera Asenova Submitted to Central European University Doctoral School of Political Science, Public Policy and International Relations In partial fulfillment of the requirements for the degree of Doctor of Philosophy Supervisor: Prof. Julius Horváth Budapest, Hungary November 2013 Statement I hereby state that the thesis contains no materials accepted for any other degrees in any other institutions. The thesis contains no materials previously written and/or published by another person, except where appropriate acknowledgement is made in the form of bibliographical reference. Vera Asenova ………………... ii Abstract This thesis studies international cooperation between a small and a big state in the framework of administered international trade regimes. It discusses the short-term economic goals and long-term institutional effects of international rules on domestic politics of small states. A central concept is the concept of authority in hierarchical relations as defined by Lake, 2009. Authority is granted by the small state in the course of interaction with the hegemonic state, but authority is also utilized by the latter in order to attract small partners and to create positive expectations from cooperation. The main research question is how do small states trade their own authority for economic gains in relations with foreign governments and with local actors. This question is about the relationship between international and domestic hierarchies and the structural continuities that result from international cooperation. The contested relationship between foreign authority and domestic institutions is examined through the experience of Bulgaria under two different international trade regimes – the German economic sphere in the 1930’s and the Council for Mutual Economic Assistance (CMEA) in the early 1950’s. These are two very restrictive regimes of administered economies and bilateral clearing trade. Both core countries of these regimes extend economic benefits to the small states in order to legitimize their rule and build international authority. The Nazi and the Soviet regimes relied on authority to a different extent and used it at different points in time to legitimize their power. Nazi Germany used soft power in the early 1930’s to attract economic cooperation, which evolved to hard power and economic exploitation during WWII. Soviet power at the end of WWII was in the form of military occupation and economic exploitation and gradually took a softer form including economic concessions to its sphere of influence. In both cases the small state had a certain degree of authority and was able to extract short term economic benefits from cooperation with the hegemon. I argue that the small state has more agency than it is usually assumed in the literature. iii Acknowledgements This thesis was a search for voice and it started with listening to others. Above all I want to thank my supervisor, Julius Horváth, for suggesting this topic to me and for encouraging me to explore it. His comments and recommendations have helped me develop and improve it and I am especially thankful for his always-positive attitude and consistent support. I thank László Csaba for commenting on early drafts and suggesting important references. I am grateful to Nikolay Nenovsky – for being a great mentor and early example of a critical and free thinker. I am indebted to Jonas Scherner and Eugene White for their careful editing and critique of a part of the thesis. I owe a very special thanks to Andrew Janos who offered valuable perspectives on my research and helped me define its scope. I would like to thank also Huricihan Islamoglu, Steven Fish, Jason Wittenberg, Ivan Berend, Brad de Long and Stephen Krasner, who during my visiting fellowship at UC Berkeley helped me see the research from different theoretical standpoints. David Lake, Elen Comisso, Thilo Bodenstein, Luca Fantacci, Markus Wien and Philippe Schmitter have also provided great feedback and ideas. My stay at the Institute for Human Sciences, Vienna has offered me the critical remarks of Janos Kovacz, Ivan Krastev, Philip Howe and the junior fellows and friends Aga Pasieka, Olha Martynyuk, Dave Petrucelli, Elizabeth-Anne Robinson, Jadwiga Biskupska, Julia Rudolph and others. The Bulgarian Public Records Office has kindly provided access to the archives and the economic historians Martin Ivanov, Roumen Avramov, Gospodinka Nikova, Pencho Penchev and Rositsa Rangelova have been always available for suggesting resources and discussing ideas. I also owe a big thank you to the Institute for Humane Studies for providing financial and career developing assistance. Parts of the thesis were presented and discussed at different conferences in Florence (2009), Washington D.C. (2009), Budapest (2010), Reykjavik (2011), Vienna, (2011), San Diego, (2012), Chicago (2013) and Sofia, (2013). I am grateful for all the comments I received from discussants and from the anonymous referees of my submitted manuscripts. I thank my friends and colleagues for sharing the momentary triumphs and recurring doubts of academic research - Anna Selmeczi, Andras Szalai, Kiril Kossev, Kristin Makszin, Lucia Kurekova, Magdalena Bernaciak, Stefan Cibian, Momtchil Karpouzanov, Petar Stankov, Stefan Kolev, Svetoslav Salkin and Vera Scepanovics. The friendship of Elena and Nikolay Bobevi, Nikolai Kyuchukov, Radena Tsvetanova, Stella Vassileva, Zornitsa Stefanova, Genoveva Ilieva and Camelia Ivanova has been the one thing I’ve never doubted. I thank them for all the fun times together, for knowing me and still loving me, and for the honest reminders when “the time to hesitate is through”. I thank my family for their patience and support. My mom, who taught me to dream big, and my dad, who taught me to know my limitations, my aunt and uncle and my two cousins whom I feel sisters, have helped me tremendously. Thank you for always being there for me, and please, forgive me the absence and the mess. Finding a voice is no easier than finding ones perfect match. But it is likewise possible. Thank you, Zack, for happening to me, for reading me the way you do and for believing in me like noone has. Your love makes everything fall into place. iv Table of Contents Introduction................................................................................................................1 Chapter 1: The International Trade Regimes of Germany 1932-1939 and the Soviet Union 1949-1956...........................................................................................13 1.1. Defining Bilateral Clearing .........................................................................15 1.2. Different Political Ends...............................................................................23 1.2.1. International division of labor....................................................................24 1.2.2. Raw materials and autarky .......................................................................26 1.2.3. Ideology and institutions ...........................................................................28 1.2.4. Security.....................................................................................................32 1.3. Different Global Conditions .......................................................................33 1.4. Similar Economic Means............................................................................37 1.5. Puzzle and Research Question..................................................................40 1.5. A Case of International Trade Regime Continuity ...................................45 Conclusion............................................................................................................48 Chapter 2: Literature Review, Theoretical Framework and Case Selection.......50 2.1. Definition of Small States in Hierarchical Relations................................51 2.2. The German Offer for Eastern Europe in the 1930’s – Economic Exploitation or Economics in Hard Times?.......................................................53 2.3. The Small East European States ...............................................................61 2.3.1. Yugoslavia in the German economic sphere............................................66 2.3.2. Romania in the German economic sphere ...............................................68 2.3.3. Bulgaria in the German economic sphere ................................................73 2.4. Theoretical Framework...............................................................................78 Conclusion............................................................................................................89 Chapter 3: Bulgarian-German Relations – Foreign Sources of Domestic Institutions ...............................................................................................................90 3.1. The Great Depression in Bulgaria and Germany .....................................91 3.2. Establishing Bilateral Trade Relations Bulgaria - Germany 1931-1932 .95 3.3. Growing German Influence ........................................................................98 3.4. Financing of Exporters and Inflationary Effects ....................................106 3.5. Wartime Economic Relations ..................................................................112 Conclusion..........................................................................................................115
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