The recognition of a State by another State is usually based upon a mixture of factual and political concerns — factually, does the state meet all the traditional criteria of statehood, and politically, what are the risks and rewards of recognizing or refusing to recognize another sovereign. The tiny island nation of Nauru, however, has shown the potential of a third important consideration: raw financial compensation.

For $50 million, Nauru has effectively sold its vote in the statehood electoral college to the fledgling international entity of Abkhazia. Hat tip International Law Prof.

Nauru, an eight-square-mile rock in the South Pacific with about 11,000 inhabitants, was no pushover, according to the influential Russian daily newspaper Kommersant. In talks with Russian officials, Nauru requested $50 million for “urgent social and economic projects,” the newspaper reported, citing unnamed Russian diplomats.

This is not the first time Nauru has put a price tag on recognition of statehood. Back in 2002, in a somewhat more contentious situation, Nauru switched its recognition from Taiwan to the PRC for $130 million. So in merely 7 years, the price has already fallen dramatically, by $80 million.

This could of course be a case of price discrimination — Nauru knows China can afford to pay a lot more than Abkhazia — or perhaps it could be argued that Nauru’s recognition was more valuable to China as it was not just a vote for them it was a vote against Taiwan. But I think it is more likely that the difference in price can be attributed to a decrease in the service’s value.

State recognition is more art than science, but the specific motivations behind a State’s decision to recognize another State do affect how much weight that choice to recognize is given when it is factored into the overall statehood calculation. Now that we know Nauru is willing to give a vote of statehood to any wannabe sovereign that can meet its price, the significance of recognition by Nauru as an indicia of statehood will be severely discounted. Therefore, the more often Nauru engages in recognition-for-cash sales, the more Nauru’s recognition will decrease in value. Just like the phosphate that once sustained Nauru’s economy, recognition is a non-renewable resource, and will not sustain Nauru forever.

Essentially, for a mere $50 million, Nauru has sold off a portion of its international law making power to Abkhazia.

On the other hand, Abkhazia may benefit from the trade in other ways. Although Nauru’s recognition is worth little in itself, the fact Abkhazia was able to demonstrate its ability to acquire $50 million, engage in international diplomacy with another recognize state, and donate a sum of money as “foreign aid” could signal to other nations that Abkhazia is a serious player after all.

Under Article 1 of the Montevideo Convention, the fourth and final qualification for statehood is a “capacity to enter into relations with the other states.” The deal may have been somewhat sordid and tacky, but nevertheless, by acquiring Nauru’s recognition, Abkhazia proved it had the capacity to engage in foreign relations.

-Susan