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This article asks under which conditions the state‐building efforts of external actors in areas of limited statehood are likely to be effective. We argue that the legitimacy of the specific norms promoted by external actors among local actors is crucial for their success in strengthening state capacities. International efforts need to resonate with prevalent social norms. To substantiate this argument, we focus on the European Union's (EU) anticorruption programs and their implementation in one of the most corrupt regions in the world, the Southern Caucasus. We show that legitimacy can explain why the EU's fight against corruption helped reduce corruption in Georgia but not in Armenia. In both countries, political elites could selectively use anticorruption programs as an instrument against political opponents, using enhanced state capacities to stabilize the incumbent regime. Only in Georgia, however, was the fight against corruption facilitated by sustained domestic mobilization for anticorruption policies that added pressure on political elites “from below.”

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In order to tackle democratic backsliding in EU member states, the European Commission proposed a new financial conditionality in May 2018 that would allow the suspension of EU funds in cases of systematic rule of law infringements. This article seeks to evaluate the Commission's proposal in terms of its chances at successfully deterring or redressing such infringements. Drawing on both the literature on EU enlargement and on international sanctions, we identify a list of scope conditions for conditionality in order to systematically evaluate the institutional design and analyze the context of application of the proposed rule of law conditionality on EU funds with regard to its expected effectiveness. We find that the current proposal would indeed improve the speed and likelihood of sanctions compared to existing mechanisms, but lacks in the determinacy of conditions and procedures, thus undermining its perceived legitimacy and chances of success.

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