The history of the ethnic borderlands of Hungary and Romania in the years 1867–1944 were marked by changing national borders, ethnic conflicts and economic problems. Using a local case study of the city and county of Szatmár/Satu-Mare, this thesis investigates the practice and social mechanisms of economic nationalizing. It explores the interplay between ethno-national and economic factors, and furthermore analyses what social mechanisms lead to and explain inclusion, exclusion and annihilation.

The underlying principle of economic nationalizing in both countries was the separation of citizens into ethnic categories and the establishment of a dominant core nation entitled to political and economic privileges from the state. National leaders implemented a policy of economic nationalizing that exploited and redistributed resources taken from the minorities. To pursue this end, leaders instrumentalized ethnicity, which institutionalized inequality and ethnic exclusion. This process of ethnic, and finally racial, exclusion marked the whole period and reached its culmination in the annihilation of the Jews throughout most of Hungary in 1944.

For nearly a century, ethnic exclusion undermined the various nationalizing projects in the two countries: the Magyarization of the minorities in dualist Hungary (1867–1918); the Romanianization of the economy of the ethnic borderland in interwar Romania (1918–1940); and finally the re-Hungarianization of the economy in Second World War Hungary (1940–1944).

The extreme case of exclusion, namely the Holocaust, revealed that the path of exclusion brought nothing but destruction for everyone. This reinforces the thesis that economic nationalizing through the exclusion of minorities induces a vicious circle of ethnic bifurcation, political instability and unfavorable conditions for achieving economic prosperity. Exclusion served the short-term elite’s interest but undermined the long-term nation’s ability to prosper.