One of the central issues in Armenia’s domestic political discourse today is constitutional reform. On August 8, 2025, Armenia initialed a peace agreement with Azerbaijan. This created realistic conditions for establishing lasting and stable peace between the two countries. For any reasonable and responsible citizen, it is clear that there is no alternative to a policy aimed at establishing peace. Armenia does not have sufficient economic, demographic, military, or foreign-policy capacity to resume the conflict with Azerbaijan and, as a consequence, maintain strained relations with Turkey. Rejecting the peace agenda would amount to sheer adventurism, threatening the country’s security and running counter to a development-oriented policy.
At the same time, signing a peace agreement with Azerbaijan would almost inevitably lead to the normalization of Armenian-Turkish relations. This would significantly reduce the likelihood of renewed tensions in the region. As a result, the nature of Armenia’s external environment would change qualitatively, reducing both the range of potential threats to its security and the likelihood of their materialization. From the perspective of ensuring its security, Armenia would find itself in a far more favorable position.
These developments would also have practical consequences. The country’s economic risk would decrease significantly, a risk that has accompanied Armenia throughout its independence due to the high likelihood of conflict and war. As a result, the country’s investment appeal would increase. The opening of transport links with neighboring states would substantially expand Armenia’s logistical capabilities. This, in turn, would create opportunities for the country to become more deeply integrated into global supply chains.
From a theoretical perspective, the case for signing a peace agreement is supported by a 2008 World Bank report that provided a comprehensive analysis of the challenges of economic development in modern states1. The report examined the experience of countries that had achieved sustained, uninterrupted economic growth since 1950. One of its conclusions was that all of these countries had operated in highly reliable security environments. They had all made extensive use of the opportunities provided by international trade and had become integrated into global supply chains. Practical evidence supporting this thesis can readily be found in the cases of countries in the Far East and Southeast Asia, as well as Central and Eastern Europe.
The question, however, is how to achieve the final signing of the peace agreement. Setting aside the diplomatic details of the matter, it should simply be noted that, at present, Armenia faces the issue of constitutional reform on its path toward signing the peace agreement. The situation is such that, without this reform, Armenia is unlikely to succeed in this endeavor in the near future. The balance of power between Armenia and its neighbors cannot shift in Armenia’s favor to any meaningful extent without sustained economic development. And, as we have established, such development cannot be ensured without creating favorable conditions for growth, which in turn depend on the existence of peace.
The problem is also that the balance of political forces in Armenia’s domestic political arena makes constitutional reform under the existing procedure almost impossible. The ruling political force does not have a sufficient parliamentary majority to achieve this objective. It probably also lacks sufficient legitimacy to undertake such a step.
Under these circumstances, there is a strong temptation to bypass the procedures required for constitutional reform. The temptation to resort to authoritarian instruments becomes even stronger when one considers that the objective itself is evidently good and well-intentioned.
So why should this path not be pursued?
The reason is that, in addition to the factors listed above, countries with successful records of economic development have also been characterized by what could be described as the liberalization of political or, at the very least, economic life. They have moved from closed and tightly controlled societies toward more open and less controlled ones. None has achieved success by moving in the opposite direction. Surprisingly to some, this has also been true of China, which is often mistakenly classified as a country that achieved success solely through an authoritarian path. From the beginning of Deng Xiaoping’s reforms through the era of Xi Jinping, China’s leadership has periodically resorted to loosening mechanisms of control—in other words, to measures that are liberal in nature—in order to make more effective use of the country’s social potential2.
Over the past seven decades, the overwhelming majority of states that have achieved significant economic development are today established democracies. Without exception, this is also true of the countries that achieved this goal much earlier and now have mature economies.
It can be argued that the principal formula behind the success of countries in establishing effective political and economic institutions is the mechanism of “creative destruction,” which enables societies to make fuller use of their potential through free competition3. The fundamental principle that enables this mechanism to function is the rule of law. It safeguards free competition, protects property rights, and ensures the existence of other institutions that are essential for development4.
Bypassing the legal constraints that exist on the path to constitutional reform would, in essence, amount to the application of authoritarian principles. It would undermine the rule of law. Indirectly, it would also affect the ability to sustain the mechanism of “creative destruction,” which became possible to put into practice following the 2018 revolution. This would represent a retreat toward the use of authoritarian principles in politics.
In this regard, Nobel laureate Daron Acemoglu, in a work co-authored with James Robinson, notes that new elites that replace old authoritarian elites often resort to existing authoritarian institutions because they are already established practices and do not require the additional
effort involved in creating new institutions. By doing so, however, they contribute to a country’s backward trajectory and to the preservation of old authoritarian institutions that are ineffective for economic development5.
Thus, Armenia today faces a dilemma.
On the one hand, it is necessary to promptly implement the constitutional reforms required for peace. However, this could only be done by bypassing the existing requirements. The peace agreement would undoubtedly help create the conditions necessary for sustainable economic development, but the steps taken to achieve it could result in the re-establishment of economically inefficient institutions. Domestic political problems would inevitably emerge as well. The lack of legitimacy, reflected in the distribution of votes in parliament, makes it impossible to bypass the existing norms without consequences.
On the other hand, constitutional reform could be pursued strictly within the framework of the existing norms. However, this would not guarantee the completion of the process in the near future. It cannot be ruled out that it may prove impossible to implement at all. This path risks prolonging the uncertainty prevailing in Armenia’s external political environment, which cannot contribute to creating favorable external conditions for economic development. It would, however, shield the country from a legitimacy crisis, strengthen public trust in the rule of law, and ensure the country’s continued progress along the path of democratic reform.
The second option is undoubtedly much more preferable. But it requires the public to assess the situation correctly and demonstrate a high level of civic awareness, thereby providing the ruling force with sufficient legitimacy to take decisive steps toward establishing peace.
Hrachya Tashchyan
This article was produced by the Armenian Council Research Center, with the support of the Yerevan office of the Friedrich Naumann Foundation for Freedom for the South Caucasus region.
The views and positions expressed in this article do not necessarily reflect those of the Friedrich Naumann Foundation for Freedom or its staff
