Introduction
The collapse of the Nagorno-Karabakh political and military order represents one of the most consequential geopolitical shifts in the South Caucasus since the end of the Soviet Union. Armenia’s military defeat in the Second Nagorno-Karabakh War (2020), followed by the fall of the self-proclaimed Republic of Artsakh in 2023, brought not only the end of a protracted territorial dispute but also a profound rupture in the Armenian state’s domestic and foreign policy orientations. Far from being merely a question of borders or strategy, the loss of Nagorno-Karabakh challenged deeply entrenched narratives of identity, security, and legitimacy in Armenian political life.
This article investigates a paradox: Can military defeat and territorial loss foster democratization? While traditional realist theories would expect such an outcome to trigger political instability or authoritarian consolidation, Armenia has shown surprising democratic resilience in the aftermath of its defeats. Since the Velvet Revolution of 2018, and despite the enormous psychological and strategic shock of 2020–2023, Armenia has maintained competitive elections, strengthened institutional pluralism, and pursued anti-corruption reforms (Ishkanian 2021; Freedom House 2023).
Yet it is crucial to recognize that the unresolved status of Nagorno-Karabakh—and the broader state of protracted territorial conflict with Azerbaijan—has been the primary structural impediment to democratization in Armenia since independence. Even before the consolidation of the Karabakh leadership, the very existence of an ongoing war effort entrenched a securitized political culture, diverted institutional resources, and justified limitations on political pluralism. This trajectory invites theoretical reflection on the relationship between peace, borders, and democratic development.
To explore this, the article adopts the lens of the Territorial Peace Theory (TPT), a framework developed as a counterpoint to the more widely known Democratic Peace Theory (DPT). While DPT posits that democracies tend not to go to war with each other, TPT reverses the logic: it suggests that peace, especially in the form of stable borders and resolved territorial disputes, precedes and enables democratization (Gibler and Tir 2010; Gibler 2012). In environments where territorial conflict dominates public life, governments tend to centralize power, suppress dissent, and defer reform in the name of national defense. In contrast, when external threats subside—through peace agreements, border stabilization, or even defeat—opportunities emerge for civilian control, political liberalization, and reform (Gibler 2007; Tir and Jasinski 2008).
Armenia, long governed by elites whose legitimacy was rooted in the wartime legacy of Karabakh, offers a particularly revealing case. The dismantling of the so-called Karabakh security order—including the erosion of power held by the “Karabakh clan” (Ter-Petrosyan 2008)—has triggered a recalibration of Armenia’s national identity and strategic priorities. The country’s shifting alliances, democratic endurance, and evolving civic discourse raise the possibility that territorial loss has become a condition—not an obstacle—for democratic consolidation.
In recent months, there has been a great deal of insistence within the Armenian government on solutions that would allow for stability and peace. Moreover, concomitantly, if we take a look at the levels of economic and social growth and the increase in democratic standards and freedom of the press and expression in Armenia, these are rising considerably. All of this is set against a backdrop of peace deal negotiations that witnesses how Yerevan is at the forefront of efforts to strike a final and definitive deal, despite the fact that both defeat and rancour towards Baku are not over. However in pushing for a deal, it proves to be the peace-promoting actor in the region in the eyes of the international community, and, essentially, Aliyev and his own government have little excuse now to claim that Armenia does not want stability in the region.
The final focus will be on the role of the EU in this process. Did the European Union play an important role in the post-conflict democratization process in line with the logic of the TPT?
Overall, the article will provide insights that are useful both for the literature on Caucasus Conflicts and on EU external relations and policy in the South Caucasus. Notably, it will provide profound insights for the literature on democratization processes and transitions, particularly for that on postwar democratization.
The Territorial Peace Theory: Conceptual Foundations and Relevance for the “Armenian case”
Among the various theoretical approaches connecting war, peace, and democracy, the Territorial Peace Theory (TPT) provides a compelling and underutilized framework for interpreting Armenia’s recent political trajectory. Developed as a critique and complement to the Democratic Peace Theory (DPT), TPT reverses the causal logic that has dominated liberal IR and comparative politics for decades. While DPT suggests that democracies are more peaceful because of their internal norms and institutional constraints, TPT argues that peace—especially the resolution of territorial disputes—precedes and enables democratization (Gibler 2007; Gibler and Tir 2010).
By embracing institutional reforms, economic modernization, and regional diplomacy, Armenia has the potential to redefine its national trajectory beyond the framework of ethno-territorial conflict. The success of this transition will depend on the resilience of its democratic institutions, the adaptability of its leadership, and the willingness of regional and international partners to support Armenia’s new path. Further research is needed to assess the long-term effects of military defeat on democratization and state stability.
In this sense, the very presence of a frozen conflict in Nagorno-Karabakh functioned as a democratic barrier from the outset. From the early 1990s, Armenia operated under a de facto state of war, shaping political priorities around national survival and enabling the emergence of militarized legitimacy. TPT is especially relevant in such contexts, where territorial conflict is not simply an external affair, but a domestic conditioning factor that stunts the development of democratic norms, civilian oversight, and institutional autonomy.
The core assumption of TPT is that territorial conflict increases the likelihood of authoritarianism. States involved in active disputes tend to centralize power, maintain large security apparatuses, and justify restrictions on political freedom through national security concerns. Conversely, the resolution of border conflicts, whether through diplomatic settlement or even military defeat, reduces external threat perception and opens political space for institutional liberalization, demilitarization of politics, and democratic accountability (Gibler 2012; Tir and Jasinski 2008).
TPT has been tested primarily through large-N empirical studies, which have found robust correlations between settled borders and regime transitions toward democracy. Gibler and Tir (2014) demonstrate that states without territorial disputes are significantly more likely to experience peaceful democratization than those embroiled in conflict. The theory also explains why authoritarian regimes are more prone to militarized interstate disputes: they may use external threats to consolidate domestic power (Trumbore and Boyer 2000; Bennett and Stam 2004).
However, the case of Armenia offers a unique opportunity to explore TPT in a semi-democratic, post-Soviet, post-conflict context. For much of its post-independence history, Armenia’s democratic development was constrained by its unresolved conflict with Azerbaijan over Nagorno-Karabakh. The political elite, particularly Nagorno-Karabakh affiliated presidents Robert Kocharyan and Serzh Sargsyan, derived much of their legitimacy from wartime credentials and a securitized national identity centered on Nagorno-Karabakh (Broers 2019; Ter-Petrosyan 2008). This led to decades of political stagnation, restricted media and judicial independence, and limited civil society participation.
The 2020 military defeat in the Second Nagorno-Karabakh War, followed by the effective dismantling of the de-facto Republic of Artsakh in 2023, produced not only a geopolitical rupture but a potential de-securitization of Armenia’s domestic political space. Prime Minister Nikol Pashinyan’s continued leadership—despite defeat—signals a new form of legitimacy grounded in electoral accountability rather than territorial defense. Armenia’s loss of Karabakh, though traumatic, may have removed the very factor that prevented democratic consolidation.
This hypothesis aligns with broader observations in TPT literature: territorial loss, paradoxically, can promote liberalization by discrediting militarized elites and reducing public tolerance for permanent states of exception (Waldner 2012; Ginsburg and Huq 2018). Indeed, Armenia’s slight improvements in democratic indicators—despite economic hardship and regional isolation—suggest that post-conflict environments may, under specific conditions, produce opportunities for civilian-led governance reform.
To explain the possibility of a continuation of democratization after defeat, it is also worth considering the literature from Nancy Bermeo and Pereira Watts (Bermeo 2003; Bermeo 2010; Pereira Watts 2016). Some authors, albeit not many, focus on the element of war by linking it to how a military victory can lead to future stability and possible future democratization of the country (Fortna, Huang 2012). On the contrary, the classics in the democratization literature are surprisingly reticent about the links between defeat in war and lasting democracy. Most of our theoretical literature on democratic transitions or democratic consolidation leaves the connection to war either wholly neglected or seriously undertheorized. The two most important concepts that can be taken from the literature of Bermeo for this case are those of postwar democratization and pre-war levels of democracy, and, precisely in the case of Armenia, we can observe how pre-war levels of democracy have changed for the better and thus there has been progress in the post-war democratization process.
Prime Minister Nikol Pashinyan stated that he would be willing to make changes to the constitution, by referendum, to ensure lasting peace and prosperity for the country. Hence, Armenia could be envisaged as a case of continued democratization and new stability after defeat since key reforms in governance, judiciary independence, and electoral transparency indicate an ongoing commitment to democratization (changes in postwar democratization and pre-war levels of democracy). Armenia’s economy has long been constrained by its reliance on remittances, limited trade routes, and geopolitical tensions. The resolution of the Nagorno-Karabakh conflict, however, presents an “opportunity” for economic diversification, foreign investment, and regional cooperation. The prospect of reopening borders with Turkey and Azerbaijan, alongside deepening ties with the European Union, could create new economic prospects. While the loss of Nagorno-Karabakh is a painful chapter in Armenia’s history, it may also serve as a transformative moment for democratization and long-term stability. Another key point that can demonstrate this is the government's announcement of the ‘Real Armenia Agenda 2026’ (new election year). This expression very much denotes the fact that there will be a focus on the real reforms needed for the republic of Armenia on a social and economic level, leaving aside “revenge” aspects and external territorial claims. This announcement has sparked quite a few protests and discontent within the parliament and society, especially among the refugees from Nagorno-Karabakh, who see any chance of their return to their homeland undermined.
Nonetheless, this application of TPT must be treated with caution. As explored in later sections, the fragility of Armenia’s democracy, combined with regional threats and limited security guarantees, challenges the linear assumptions of the theory. While Armenia may currently resemble a TPT case, its trajectory remains uncertain, and dependent on both internal resilience and sustained international support.
This section thus lays the foundation for the analysis that follows. By viewing Armenia’s domestic and foreign policy developments through the lens of Territorial Peace, the article aims to reframe debates on democratization after defeat and to assess whether the removal of territorial conflict can truly enable political transformation in fragile states.
Breaking with the “Karabakhist Order”: Pashinyan’s Rise and the End of a Security-Centered Statehood
The emergence of Nikol Pashinyan as Armenia’s political leader in 2018 marked a watershed moment in the country's post-Soviet political trajectory. His rise through the Velvet Revolution—an unprecedented civic mobilization that led to the resignation of Serzh Sargsyan and a peaceful transfer of power—broke with the pattern of elite continuity that had dominated Armenian politics since independence. Most notably, Pashinyan’s leadership came to represent a symbolic rupture with the so-called “Karabakh elite” a term widely used to describe the political elite originating from Nagorno-Karabakh, particularly former Presidents Robert Kocharyan and Serzh Sargsyan.
For nearly two decades, this group maintained a firm grip on Armenia’s political institutions, closely linking national identity and state legitimacy to the control and defense of Nagorno-Karabakh. Their rise to power in the 1990s followed Armenia’s military success in the First Karabakh War and was sustained by a political narrative that prioritized security, nationalism, and deference to military legitimacy over institutional liberalization. As a result, Armenia’s democratic development was stalled by what some scholars have termed a “securitized elite structure,” in which political power was deeply intertwined with war-era networks and territorial claims (Broers 2019; Ishkanian 2021).
From the early post-war period, Armenian political leadership had been largely monopolized by this so-called “Karabakhist” model tradition—most notably former Presidents Robert Kocharyan and Serzh Sargsyan—who had built their authority on the victory in the First Nagorno-Karabakh War (1992–1994). Their legitimacy was grounded in narratives of national defense, territorial control, and the moral superiority of the Karabakh struggle, which shaped not only foreign policy but also Armenia’s domestic power structure (Broers 2019; Iskandaryan 2013).
In practice, this translated into a securitized model of governance, in which democratic reform was subordinated to perceived national existential threats. Institutions were frequently bypassed or co-opted, and political competition was limited through informal networks, clientelism, and the strategic use of war discourse. Scholars such as Way (2005) and Hale (2015) have described such regimes in the post-Soviet space as “patronal” or “hybrid” systems—where strong informal loyalties overshadow formal democratic structures, especially in conflict-prone environments.
Pashinyan’s rise through a non-violent, bottom-up movement challenged this entire model. As a former journalist, political prisoner, and outsider to the security elite, he symbolized the civilianization of Armenian politics. His discourse did not emphasize territorial unity, but rather focused on anti-corruption, transparency, and the reconnection of the state to society (Ishkanian 2021; Grigoryan 2022). His movement attracted a broad base, particularly among urban youth and civil society actors, who had long been marginalized under the securitized state structure.
However, this break in leadership tradition was not immediate or total. After his election as prime minister, Pashinyan was forced to navigate a still-dominant security apparatus, an unreformed judiciary, and a bureaucracy shaped by the previous governments. The unresolved status of Nagorno-Karabakh also limited his ability to fully distance the state from militarized nationalism. Until the 2020 war, he continued to make rhetorical commitments to the defense of Nagorno-Karabakh, even as his government pushed for institutional reform at home.
From the perspective of Territorial Peace Theory, this period (2018–2020) can be understood as a liminal moment: the seeds of democratization were planted, but the structure of territorial conflict still constrained full liberalization. Only with the 2020 defeat and the 2023 collapse of the Artsakh republic entity did a clearer “opportunity” emerge for the de-securitization of state power and the full assertion of civilian political authority.
Indeed, Pashinyan’s continued legitimacy despite defeat may be interpreted as part of this transition. Voters in the 2021 snap elections opted to reaffirm a civilian-led, reform-oriented leadership rather than return to the nationalist-military establishment represented by former president Kocharyan. This suggests a shift in the societal basis of legitimacy: from military victory to democratic accountability, from territory to governance.
Yet, the durability of this shift remains in question. Protests led by nationalist and clerical factions—such as the 2022 Tavush for the Homeland movement—indicate that revanchist forces are still active, and that the old discourse of territorial grievance can be mobilized under pressure. Nevertheless, the initial break with the Karabakh-centric power structure initiated by Pashinyan laid the groundwork for the post-defeat transformation explored in the next sections.
It is also interesting to retrace some exemplary historical passages through crucial documents and meetings that demonstrate the pre-2018 treatment of the Nagorno-Karabakh issue in a context we might define as non-TPT.
The first is the “Package” Option 1997. This proposal, which addressed both Karabakh’s legal status as well as security issues together as a package, envisaged the inclusion of Karabakh within Azerbaijan as a broadly autonomous national and territorial entity. Karabakh would maintain a connection with Armenia through the Lachin corridor, which had come under Armenian control during the first Karabakh war, and which Azerbaijan would lease to the OSCE Minsk Group – a negotiating body chaired by Russia, US, and France, tasked with finding a solution to the Karabakh conflict. The Minsk Group would provide the use of the corridor exclusively to the Nagorno-Karabakh authorities. The remaining territories that had come under Armenian control during the war would be returned to Azerbaijani control. Then-Armenian President Levon Ter-Petrossian was in favor of this proposal, but it was rejected by a majority of Armenia’s senior leadership and the Karabakh leadership.
In 1997, the “Step-by-Step” Option was proposed and there were essentially four points:
1) the gradual return of the territories outside the Nagorno Karabakh Autonomous Region (NKAO) to Azerbaijan, except for the Lachin region; 2) deployment of peacekeepers; 3) provision of security guarantees for the Armenian population of Nagorno Karabakh; 4) the final determination of Karabakh’s legal status to come in later negotiations.
Then-Armenian President Levon Ter-Petrossian was in favor of this proposal, but as was the case with the “package” proposal, this was also rejected by Armenia’s senior leadership and the Karabakh leadership. From this point on, it can be seen that most of the proposed solutions would be rejected by Azerbaijan instead. This was a period when, according to some scholars, even Armenia itself, including the Karabakh leaders, would perhaps have been willing to accept some solutions. The first example is that of 1998 – the “Common State” Proposal. This proposal was introduced by then-Russian Foreign Minister Yevgeny Primakov. This plan presupposed a common state comprising Azerbaijan and Karabakh, which would mean horizontal relations between Baku and Stepanakert, and not a hierarchical one. Azerbaijan rejected this plan before Armenia and Karabakh had a chance to react.
Thenwe have the “2001 – Key West Negotiations”. In these negotiations, the first aspects to be highlighted are the unification of Nagorno Karabakh’s (NKAO territories) with Armenia via the Lachin corridor and the return of territories outside NKAO to Azerbaijan. In the end, it is interesting to see how there is a focus on the guarantees of unobstructed communication and transportation between Azerbaijan and Nakhichevan to be addressed through overpasses or bridges. Azerbaijani President Heydar Aliyev agreed to the plan at Key West, but rejected the plan upon being met with opposition when he returned to Baku.
Finally, we had the “Madrid Document”. Nonetheless, this document ended up not being considered by either sides. The Madrid Document was based on the premise (which came to be known as the Madrid Principles) that the resolution of the conflict would require addressing four aspects: security, status, return of refugees and return of territories. The document was submitted to that year’s OSCE Ministerial Council meeting, convened in Madrid. The Madrid Document proposal can be summarized in six crucial points:
1) Future determination of the final legal status of Nagorno-Karabakh through a legally binding expression of “will (or referendum)”; 2) An interim status for Nagorno-Karabakh providing guarantees for security and self-governance; 3) The return of the seven territories under Armenian control, surrounding Nagorno-Karabakh, to Azerbaijani control; with two of those territories – Kelbajar and Lachin – being returned at a later date; 4) A corridor linking Armenia to Nagorno-Karabakh; 5) The right of all internally displaced persons and refugees to return to their former places of residence; 6) International security guarantees that would include a peacekeeping operation.
The historical record of the pre-2018 peace proposals—from the 1997 “Package” and “Step-by-Step” options to the Key West negotiations and the Madrid Principles—highlights the structural entrenchment of the Nagorno-Karabakh conflict within Armenia’s political architecture. The repeated rejection of these frameworks by both Armenian and especially Karabakh elites illustrates the extent to which domestic legitimacy and state authority were conditioned by unresolved territorial claims and securitized narratives. Within this context, the emergence of Nikol Pashinyan represented more than a leadership transition: it signaled a paradigmatic rupture in the foundations of post-Soviet Armenian governance. By decentering the nationalist-military legacy of the “Karabakhist” elite and foregrounding a reformist, civilian-centered discourse, Pashinyan initiated a reorientation of Armenia’s state-building trajectory—away from coercive legitimacy based on conflict, toward a model rooted in institutional accountability and civic participation.
This section has traced the continuities and disruptions within Armenia’s political leadership and its relationship to the Karabakh issue. The analysis situates Pashinyan’s rise as a critical juncture—amplified by the exogenous shock of military defeat in 2020 and the formal disintegration of the Nagorno-Karabakh entity in 2023—that may have opened a path toward the de-securitization of governance. The extent to which this transformation can be consolidated, however, remains contested. The following sections examine whether this post-conflict moment constitutes a genuine case of democratization consistent with the logics of Territorial Peace Theory, and whether it enables a sustained process of civilian-led state/nation-building in the face of geopolitical uncertainty and internal polarization.
Political Transformation after Defeat: Domestic Reform and Strategic Realignment
Following the 2020 military defeat and the definitive loss of control over Nagorno-Karabakh in 2023, Armenia experienced not only a territorial and geopolitical redefinition, but also a profound internal restructuring. Contrary to widespread expectations that such a national trauma would trigger authoritarian regression or the return of militarized elites, the post-war period has, instead, seen a fragile yet notable consolidation of democratic practices. Electoral integrity was preserved in the 2021 snap elections, civil society regained a degree of influence, and public discourse became increasingly centered on accountability rather than territorial irredentism (Freedom House 2023; Ishkanian 2021).
From the perspective of the Territorial Peace Theory (TPT), this evolution is not coincidental. The closure of the “Karabakh question,” however painful, effectively removed the central territorial dispute that had long sustained militarized nationalism and elite securitization. The “Karabakh elite and leadership”, whose legitimacy and power derived from their wartime credentials and association with the defense of Nagorno-Karabakh, lost both symbolic capital and institutional foothold (Broers 2019; Iskandaryan 2013). Pashinyan’s continued political dominance—despite presiding over a historic defeat—can be interpreted as a public mandate for civilian-led reform and a break from securitized governance.
What followed was an attempt, albeit inconsistent, to reconstruct state legitimacy through institutional reform rather than nationalist rhetoric. Parliamentary procedures were revitalized, transparency and anti-corruption initiatives gained prominence, and judicial reforms began to decouple the legal system from executive control (Transparency International 2022). While oligarchic structures and informal networks persist, there has been a visible retreat of military figures from top civilian roles—a key indicator of demilitarization in governance (Levitsky & Way 2010).
Moreover, the post-war shift was not limited to the domestic arena. Armenia’s foreign policy orientation underwent a significant transformation, reflecting both strategic necessity and ideological recalibration. Russia—historically perceived as Armenia’s security patron—faced mounting criticism in public discourse and political circles alike, particularly due to its passivity during the 2020 and 2023 Azerbaijani offensives. The erosion of trust in the CSTO (Collective Security Treaty Organization) was emblematic of a broader strategic disillusionment.
In response, the Pashinyan government began seeking closer engagement with the European Union, the United States, and regional partners like India and Iran. These efforts were not merely opportunistic but aligned with the logic of Territorial Peace: with the collapse of the Karabakh front, Armenia ceased to define its international identity in terms of military confrontation and began articulating a more civilian, law-based conception of sovereignty. The application to join the International Criminal Court, intensified cooperation with NATO under the Partnership for Peace, and Armenia’s increasingly vocal participation in EU-led dialogues signal a shift toward legal-institutional security frameworks rather than traditional deterrence (Delcour & Wolczuk 2015; European External Action Service 2023).
Nonetheless, Armenia’s foreign policy shift should not be interpreted as a complete strategic realignment. Despite the erosion of public and political trust in Moscow, Russia remains a critical actor in Armenia’s security architecture and economic landscape. The continued presence of Russian border guards and peacekeepers (at least until 2023), deep energy and trade ties, and Armenia’s formal membership in the Eurasian Economic Union (EAEU) and the Collective Security Treaty Organization (CSTO) reflect a degree of structural interdependence. Moreover, Prime Minister Pashinyan’s multiple visits to Russia during and after the 2020 and 2023 conflicts—albeit often marked by diplomatic tension—signal that Yerevan has not fully severed its alliance with Moscow, but rather adopted a more flexible, multi-vector approach. This pragmatic balancing strategy underscores the constraints faced by small states seeking to recalibrate foreign policy under geopolitical pressure (Cornell 2021; Delcour 2022).
While some analysts see this as a form of bandwagoning, it may instead reflect a broader normative reorientation—an attempt to anchor Armenia’s post-defeat identity in liberal internationalism. This is consistent with TPT’s assumption that peaceful borders enable engagement with rule-based orders, which in turn support domestic liberalization and resilience (Gibler 2012; Tir and Jasinski 2008).
Yet, the process remains fragile. Pockets of political polarization persist, nationalist actors continue to mobilize around narratives of betrayal and territorial loss, and the absence of hard security guarantees from the West limits the credibility of Armenia’s new direction. Again, the 2022 Tavush protests, led by nationalist and clerical factions, highlighted how unresolved trauma and socio-economic frustration could still be leveraged to challenge democratic reforms (Abrahamyan 2022).
However, surely, several developments since 2020 lend support to the hypothesis that Armenia is undergoing a positive transformation in line with the Territorial Peace Theory. Domestically, the 2021 snap parliamentary elections—held less than a year after the crushing defeat in Nagorno-Karabakh—were widely recognized as free and competitive by international observers, including the OSCE/ODIHR mission. Prime Minister Pashinyan’s Civic Contract party won a clear majority, not through nationalist appeals, but by emphasizing institutional stability and anti-corruption reform, reflecting a shift in political legitimacy away from militarized nationalism.
In 2022, the government adopted a judicial reform roadmap in collaboration with the EU and Council of Europe, which included the restructuring of the Supreme Judicial Council and vetting procedures for judges. These steps were praised by the European Commission as examples of “tangible progress in consolidating the rule of law” (EEAS 2023). The same year, Armenia ratified a new anti-corruption strategy and launched the “Unified Anti-Corruption Electronic Platform” for public transparency, further signaling institutional innovation. In terms of socio-economic growth, Armenia is also witnessing important results in line with this discourse. Armenia’s press freedom and internet freedom ratings are quite high. The press freedom index has risen six levels from 2023 to 2024 (from 48th position to 43rd), while internet freedom has risen from 74th last year to 72nd now.
On the foreign policy front, Armenia’s application to the International Criminal Court (formalized in 2023) was a landmark move, aligning the country with global legal norms despite Russian disapproval. In 2024, Yerevan hosted the first Armenia-EU Political and Security Dialogue, a mechanism designed to deepen strategic cooperation, further integrating Armenia into European frameworks. Perhaps most strikingly, Prime Minister Pashinyan has repeatedly emphasized the importance of a “peace agenda” in public speeches, including his 2023 address to parliament where he stated: “We must finally reject the paradigm of permanent war. Security for Armenia will come not from territory, but from diplomacy, economic strength, and democratic legitimacy.”
This rhetorical shift—echoed by key ministers and reflected in government policy—indicates a normative transformation in Armenia’s conception of statehood and sovereignty, in line with TPT expectations. While significant risks remain, these developments collectively suggest that Armenia is tentatively succeeding in transforming territorial defeat into democratic opportunity, making it a rare and instructive case for scholars and policymakers alike. Ultimately, Armenia’s case demonstrates how territorial loss—rather than only victory—can trigger a reconfiguration of political legitimacy. The post-2020 period has allowed the state to partially escape the narrative trap of permanent mobilization. Whether this transformation will solidify into a lasting democratic order depends on institutional depth, societal resilience, and the capacity of international partners to support Armenia’s transition beyond symbolic gestures.
The EU’s Role in Armenia’s Democratic Transition and Regional Reorientation
Over the past several years, the European Union has progressively increased its presence and engagement in the South Caucasus. Numerous programs and projects have been implemented to promote the rule of law, strengthen democratic institutions, and enhance ties with the region’s societies. Most of these initiatives fall under the umbrella of the European Neighbourhood Policy (ENP), and in recent years, particular attention has been directed toward Armenia.
Some scholars argue that Georgia’s gradual disengagement from the EU agenda, combined with the expected resolution of the Nagorno-Karabakh conflict and Armenia’s growing willingness to pursue peaceful normalization, have made Yerevan an increasingly attractive partner for the EU. Official documents and academic literature highlight how key policy ideas—such as the promotion of democracy, the rule of law, and legal harmonization—have shaped the design and tools of EU engagement with Armenia despite significant contextual challenges (Tulmets 2005; Del Sarto & Schumacher 2005; Kelley 2006). These mechanisms have become relevant variables in understanding Armenia’s post-war democratization trajectory.
One major reference point is the Comprehensive and Enhanced Partnership Agreement (CEPA), signed in 2017 and having entered into force in 2021, along with the Joint Communication on the Eastern Partnership policy beyond 2020 and the “Recovery, Resilience and Reform” Staff Working Document. These documents outline a new legal and political framework for EU–Armenia relations, linking socio-economic development, EU integration, and post-conflict democratization. Since the Velvet Revolution and these agreements with the EU, Armenia’s economic indicators have significantly improved, despite challenges from the 2020 war and the COVID-19 pandemic. Between 2018 and 2024, Armenia’s GDP per capita more than doubled—from USD 4,042 to USD 8,715. The Armenian dram has appreciated by 25% against the US dollar since the revolution. Even with a slowdown in 2024 (5.9% growth compared to 8.3% the previous year), Armenia has marked two consecutive years as the fastest growing economy in the region. Sectors such as manufacturing, trade, and financial services have expanded by double digits year-on-year (World Bank 2024; EDB 2023).
These developments are linked, in part, to EU support. Since 2018, the EU has become Armenia’s largest donor, particularly supporting reforms after the revolution. Between 2017 and 2020, €211 million were allocated—most of it post-2018. EU per capita assistance doubled in 2019–2020 compared to 2017. CEPA created three core institutions to guide bilateral cooperation: the EU–Armenia Partnership Council, the Parliamentary Partnership Committee, and the Civil Society Platform (EU Neighbourhood & Enlargement 2021; Delcour & Ghazaryan 2024). Following the 2020 war and the 2023 attack on Nagorno-Karabakh, the EU’s engagement has intensified. Political reforms, especially around governance, the judiciary, and public accountability, were prioritized in the 2021–2027 aid cycle. EU funding has also supported the Ministry of Internal Affairs and police and migration reforms. Special emphasis has been placed on the constitutional reform process and human rights protection, including through capacity-building for Armenia’s Human Rights Defender’s Office (Delcour & Ghazaryan 2024).
Another cornerstone of EU support has been its focus on civil society. Since 2014, the EU has maintained systematic engagement through instruments like the EU Roadmap for Engagement with Civil Society (2021–2027), which aims to enhance the participation of civil society organizations (CSOs) in public life. The roadmap addresses post-COVID and post-war realities, providing tailored support to help CSOs navigate a rapidly shifting political environment. The establishment of the EU Mission in Armenia (EUMA) in 2023—preceded by a short-term monitoring mission in 2022—symbolizes a new level of EU involvement. Although non-military in nature, EUMA serves as a stabilizing presence and as a tool of conflict prevention and confidence-building. It represents a continuation of the EU’s commitment to peacebuilding through legal norms and institutional reinforcement rather than coercive force.
Thus, the evolution of Armenia's regional role following the 2020 and 2023 defeats requires rethinking its positioning not as a military actor but as a state attempting to re-legitimize itself through peaceful diplomacy, institutional resilience, and international integration. Within this new framework, the European Union has gradually acquired a more visible, though still limited, role in Armenia’s external reorientation. Following the Second Nagorno-Karabakh War, and particularly after Azerbaijan's 2023 offensive that brought the Republic of Artsakh to an end, Armenia faced the challenge of redefining its security and foreign policy priorities. With increasing domestic disillusionment toward Russia—viewed by many Armenians as having failed to fulfill its role as security guarantor—Yerevan began seeking closer relations with the EU and other Western actors. This endeavor, however, has been framed not in terms of hard balancing but in terms of political stabilization, legal alignment, and democratic consolidation.
The EU’s role, though primarily normative, has started to translate into practical engagement. The establishment of the European Union Mission in Armenia (EUMA) in 2023, following the deployment of a short-term civilian monitoring mission in 2022, was a crucial step in signaling EU commitment to stability in the region. Although unarmed and non-interventionist, the EUMA, as mentioned before, has symbolic value as a form of external presence and a mechanism of international observation. It reflects the broader European approach to post-conflict peacebuilding, focused on legal mechanisms, human rights, and democratic institutions, rather than on military guarantees. Armenia's government has actively participated in this process of alignment. The 2017 Comprehensive and Enhanced Partnership Agreement (CEPA) remains the backbone of EU-Armenia cooperation. The Armenian government has continued to frame CEPA as a tool for democratic reform and modernization, especially in the judiciary, public administration, and anti-corruption sectors. At the same time, steps toward ratifying the Rome Statute of the International Criminal Court (formalized in 2023) signaled Armenia’s growing alignment with European legal frameworks—even at the cost of increased friction with Moscow.
However, the EU’s limited hard power in the region imposes important constraints. The EU does not offer security guarantees, and its capacity to deter renewed aggression from Azerbaijan is negligible. As such, the credibility of its presence depends on diplomatic consistency and sustained economic and political engagement, not coercive force. This also means that EU support, while crucial, may not be sufficient to anchor Armenia’s democratization if internal tensions, nationalist backlash, or geopolitical isolation were to escalate. From the perspective of Territorial Peace Theory, the EU’s role fits the logic of “legal peacebuilding”: it supports Armenia in institutionalizing post-defeat democratization by helping shift the country’s security rationale away from military confrontation and toward the international rule-based order. Yet, the risk of democratic backsliding remains real—especially as defeat may fuel new nationalist movements or revanchist discourses. In this sense, the EU’s efforts must go beyond normative encouragement and power approach and provide concrete incentives and resources for democratic resilience.
Therefore, the EU, while not a military actor in the South Caucasus, has played and can still play a crucial role in supporting Armenia’s transformation into a peace-seeking and democratically resilient state. This, however, depends on the EU’s willingness to treat Armenia not as a buffer zone but as a strategic partner—investing in long-term democratization even amidst geopolitical volatility.
Limitations and Risks of Interpreting Armenia through the Territorial Peace Lens
While the Territorial Peace Theory (TPT) offers a valuable framework for understanding Armenia’s post-defeat political trajectory, its application to the South Caucasus context must be approached with caution. Unlike many of the empirical cases used to support TPT—mostly drawn from consolidated democracies or post-authoritarian transitions with stable external borders—Armenia’s regional environment remains highly volatile. This raises questions about the long-term viability of democratization driven by territorial stabilization in the absence of credible security guarantees.
One limitation stems from the fragility of Armenia’s democratic institutions, which continue to face internal challenges such as politicized courts, media capture risks, and elite fragmentation (Freedom House 2023; Ishkanian 2021). While the defeat may have delegitimized the securitized “Karabakh clan,” it has not eradicated the political appeal of nationalist narratives, especially in rural or border regions affected by displacement and insecurity. Civil society remains vibrant, but increasingly polarized—a condition that may undermine liberal reform over time (Ginsburg & Huq 2018). Another key limitation is TPT’s limited engagement with external threat persistence. In Armenia’s case, the territorial dispute may have ended on paper, but Azerbaijan’s assertiveness and Turkey’s regional ambitions continue to produce a perception of existential threat. The lack of a robust deterrence mechanism or binding international security framework (e.g. peacekeeping guarantees) leaves Armenia exposed. If domestic reform is not matched by credible external stability, the democratization process risks reversal under the pressure of renewed conflict or internal disillusionment (Levitsky & Way 2010).
Moreover, the TPT framework may struggle to explain foreign policy choices driven by constraint rather than preference. Armenia’s pivot toward the EU, for example, has been partly strategic but also reactive—driven by Moscow’s perceived abandonment rather than a coherent liberal vision. This raises concerns that Armenia’s realignment may be insufficiently institutionalized to support lasting transformation, especially if the EU fails to match political engagement with tangible security incentives (Delcour & Wolczuk 2015). Finally, the broader regional dynamics remain unresolved. Georgia faces its own democratic backsliding; Azerbaijan continues to pursue militarized diplomacy; and Russia, despite its declining influence, retains strategic levers. Within such a context, a small, landlocked democracy may find itself structurally constrained, no matter how internally resilient.
In sum, while TPT helps us make sense of certain aspects of Armenia’s domestic evolution, it must be complemented by critical attention to institutional fragility, geopolitical exposure, and external actor inconsistency. Armenia might currently reflect the characteristics of a TPT case, but whether it can remain one will depend on its capacity to balance reform with regional realism.
Conclusion
Armenia’s trajectory following its defeats in Nagorno-Karabakh challenges conventional assumptions about the political consequences of war and territorial loss. Rather than regressing into autocracy or revanchist nationalism, Armenia has—at least tentatively—embraced a path of institutional renewal, external realignment, and civic engagement. This article has argued that the Territorial Peace Theory provides a useful framework for interpreting this paradox: by eliminating a destabilizing territorial conflict, Armenia has opened space for democratic consolidation.
At the same time, this transformation is fragile and far from complete. The trauma of military defeat, the humanitarian crisis of displaced populations, and the uncertainty of future regional dynamics continue to weigh heavily on Armenian society. Moreover, the persistence of nationalist rhetoric, the vulnerability of democratic institutions, and the limited capacity of external actors like the EU to provide security support all pose risks to the durability of recent gains.
Nevertheless, Armenia’s case suggests that territorial loss does not inevitably lead to political collapse. Under specific conditions—particularly where defeat discredits militarized elites and prompts a strategic rethinking of national priorities—such losses may even generate openings for democratic development. While the coming years will test the resilience of Armenia’s reforms, the post-Karabakh period should be understood not only as a time of grief, but also as a critical juncture in the long and uncertain path toward a more democratic statehood.
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