
Austria-Hungary, also known as the Austro-Hungarian Empire, was a state in Central Europe that existed from 1867 until the end of World War I in 1918. It was formed through a compromise between the ruling Habsburg dynasty and the Hungarians, which split the empire into two semi-independent halves: the Kingdom of Hungary and the Austrian Empire. This compromise was driven by the Hungarians' desire for independence and the need to retain the empire's great power status. The Austro-Hungarian Empire was a major European power and the largest political entity in mainland Europe before World War I, known for its economic growth and social changes during the age of industrialization.
| Characteristics | Values |
|---|---|
| Official Name | Austria-Hungary |
| Also Known As | Österreich-Ungarn, Österreichisch-Ungarische Monarchie, Österreichisch-Ungarisches Reich, Austro-Hungarian Empire, Austro-Hungarian Monarchy, Doppelmonarchie, Dual Monarchy |
| Type of State | Empire |
| Type of Empire | Dual Monarchy |
| Previous Name | Austrian Empire |
| Year of Formation | 1867 |
| Year of Dissolution | 1918 |
| Total Years of Existence | 51 years |
| Ruling Dynasty | Habsburg |
| Monarch | Emperor Franz Joseph, King of Hungary |
| No. of Capital Cities | 2: Vienna and Budapest |
| Total Area | 700,000 square kilometres |
| Population | 52 million |
| No. of Kingdoms | 3: Austria, Hungary, and Croatia-Slavonia |
| No. of Armies | 3 |
| No. of Parliaments | 2 |
| Economic Characteristics | Strong agriculture and food industry, rapid industrial growth, high annual growth, advanced railway infrastructure |
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What You'll Learn

The Austro-Hungarian Compromise of 1867
The Compromise of 1867 ended the 18-year-long military dictatorship and absolutist rule over Hungary imposed by Emperor Franz Joseph after the Hungarian Revolution of 1848. It restored the territorial integrity and the old historic constitution of the Kingdom of Hungary. Hungary received full internal autonomy and a responsible ministry, while the empire remained a single great state for purposes of war and foreign affairs, thus maintaining its dynastic prestige abroad. The emperor, however, remained the same for both halves of the empire, and the ministers were responsible to him, not to a majority of the Reichsrat (the Imperial Council).
The Austro-Hungarian Compromise was a direct result of the Second Italian War of Independence and the Austro-Prussian War, which had left the Habsburg Empire on the verge of collapse in 1866. The wars caused significant state debt and a financial crisis, forcing the Habsburgs to reconcile with Hungary to save their empire and dynasty. The Hungarian "rebels" had lost their brief war of independence in 1848, and the subsequent counter-revolutionary efforts failed to suppress nationalist and liberal sentiments across the empire.
The Compromise was officially passed as a constitutional law by the Hungarian parliament in March 1867, with the rights of individuals secured and a genuinely impartial judiciary created. However, it was only supported by a very small part of Hungarian society, as suffrage was very limited at the time. The Compromise was widely seen as a betrayal of Hungarian interests and the achievements of the 1848-49 War of Independence, causing deep and lasting divisions in Hungarian society.
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The Austrian Empire before 1867
The Austrian Empire, also known as the Empire of Austria, was a multinational European great power from 1804 until 1867. It was created by proclamation out of the realms of the Habsburgs. During its existence, it was the third most populous monarchy in Europe after the Russian Empire and the United Kingdom. Geographically, it was the third-largest empire in Europe after the Russian Empire and the First French Empire.
The Austrian Empire was proclaimed by Francis II in 1804 in response to Napoleon's declaration of the First French Empire. This unified all Habsburg possessions under one central government. It remained part of the Holy Roman Empire until the latter's dissolution in 1806. It continued fighting against Napoleon throughout the Napoleonic Wars, except for a period between 1809 and 1813, when Austria was first allied with Napoleon during the invasion of Russia and later neutral during the first few weeks of the Sixth Coalition War.
The Austrian Empire was legally a single state, although the overarching structure and the status of its component lands initially remained similar to those under the composite monarchy. This was especially true for the status of the Kingdom of Hungary, which had never been a part of the Holy Roman Empire and had always been considered a separate realm. Hungary's affairs were administered by its own institutions (King and Diet), and no Imperial institutions were involved in its government.
Following the revolutions of 1848, there was a brief attempt to introduce modern-style political districts. However, the reforms of 1853-54 instead instituted a system that delegated the responsibilities of the Kreise among subordinate Amtsbezirke ('office districts'), which persisted until 1867. In the course of the post-1848 reforms, Transylvania was also divided into Kreise in 1851 (and re-divided in 1854).
In 1866, Austria was defeated in the Austro-Prussian War, which led to the dissolution of the German Confederation and the Venetian lands switching to Italian rule. This defeat prompted the Austro-Hungarian Compromise of 1867, which joined the Kingdom of Hungary and the Empire of Austria to form Austria-Hungary, also known as the Dual Monarchy. This change effectively split the empire into two semi-independent halves: the Kingdom of Hungary and the rest (which continued to be called the Austrian Empire).
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The Hungarian War of Independence in 1848
The Austrian Empire, which officially dates back to 1804, became known as Austria-Hungary in 1867. This change was the result of a compromise between Emperor Franz Joseph and Hungary, which granted the kingdom internal autonomy.
However, Hungary had long sought independence from the Austrian Empire, with nationalist and liberal sentiments persisting across the empire's territories. In 1848, a wave of revolutions swept across Europe, and Hungary was no exception. The Hungarian War of Independence of 1848, also known as the Hungarian Revolution of 1848, was a pivotal episode in the kingdom's pursuit of sovereignty.
The revolution began in Pest in March 1848, with the establishment of a Hungarian ministry responsible to the Diet. Lajos Kossuth, a prominent leader, played a significant role in the uprising. He rallied a revolutionary army, known as the 'Honvéd' or territorial army, which consisted of around 170,000 troops. The Hungarians sought to overthrow the Habsburg rule and establish their independence.
The war was not without its challenges and setbacks. Croatian troops, led by Count Josip Jelačić, invaded southern Hungary, and the Hungarian units faced a defeat at the Battle of Schwechat near Vienna. Despite this, the Hungarians persevered, and in April 1849, Kossuth issued the celebrated Hungarian Declaration of Independence. The struggle for independence culminated in August 1849, with the capitulation of the revolutionary army in Világos near Arad, bringing an end to the Hungarian War of Independence.
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The Dual Monarchy
In 1866, the Austrian Empire suffered setbacks due to the Austro-Prussian War, which further weakened its power and influence. Emperor Franz Joseph of Austria recognised the need to compromise with the Hungarians to maintain the empire's great power status. Negotiations were led by Ferenc Deák on the Hungarian side, and resulted in the creation of a dualist structure for the empire. Hungary received full internal autonomy and a responsible ministry, while the empire remained a single great state for purposes of war and foreign affairs. Franz Joseph became King of Hungary, in addition to being Emperor of Austria.
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The economic and industrial growth of Austria-Hungary
The Austro-Hungarian Empire, which lasted from 1867 to 1918, was a predominantly rural empire with a small industrial base. However, it experienced significant economic and industrial growth during its existence. This growth was driven by various factors, including technological change, foreign investment, and the division of labour between the eastern and western halves of the empire.
In 1867, the Austrian Empire was officially transformed into Austria-Hungary through the Austro-Hungarian Compromise, also known as the Ausgleich. This compromise granted Hungary full internal autonomy and created a dual monarchy with distinct Austrian and Hungarian halves. This change had economic implications, as it led to the division of labour between the two halves of the empire. The western areas, centred around Prague and Vienna, specialised in various manufacturing industries, excelling in sectors related to the First Industrial Revolution. On the other hand, the eastern areas, with Budapest as its hub, focused on agriculture and food production, becoming a predominant force in these sectors within the empire.
The period following the establishment of Austria-Hungary witnessed rapid industrialisation and urbanisation. Technological advancements accelerated this process, with the GNP per capita growing at a rate of approximately 1.76% per year from 1870 to 1913. While the Austro-Hungarian economy lagged behind those of Germany and Britain, it compared favourably to other European nations such as France. The empire's strong agricultural and food industries, centred in Hungary, played a significant role in exports to the rest of Europe. By 1913, the population of Austria-Hungary, including Bosnia-Herzegovina, had reached 53 million, reflecting the empire's growth.
Foreign investment also contributed to the economic growth of Austria-Hungary. Between 1870 and 1913, Germany, France, and, to a lesser extent, Great Britain, were the primary sources of foreign investment in the empire. Vienna, the empire's economic hub, raised tariffs in the 1870s and 1880s to protect its burgeoning industries, resulting in robust economic growth and a doubling of GNP from 1870 to 1913. The growth of GDP per capita in Austria-Hungary was slightly higher than in the rest of Europe during this period.
The division of labour between the east and west, coupled with the existing economic and monetary union, further propelled economic growth in the early 20th century. The eastern regions, particularly the Kingdom of Hungary, experienced consistent economic growth, gradually reducing the economic disparities between the two halves of the empire. By the end of the 19th century, the eastern parts of the empire began to surpass the western regions economically. This growth was evident in sectors related to the Second Industrial Revolution, such as machine building and electric industries. Austria-Hungary became the world's fourth-largest machine-building industry and the third-largest manufacturer and exporter of electric appliances and power generation equipment. Additionally, the Hungarian kingdom boasted an extensive rail network, with nearly half of the empire's railways built within its territory, ranking sixth in the world for railway density.
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Frequently asked questions
Austria-Hungary, also known as the Austro-Hungarian Empire, was formed in 1867 and lasted until 1918.
The Austro-Hungarian Compromise of 1867, also known as the Ausgleich, was an agreement between the ruling Habsburg dynasty and the Hungarians. It effectively split the empire into two semi-independent halves: the Kingdom of Hungary and the Austrian Empire.
The agreement created a dual monarchy, with each kingdom having its own prime minister and parliament. The central government in Vienna, led by the monarch, was in charge of foreign policy, the customs union, and the armed forces. The agreement also led to the protection of individual rights, the creation of an impartial judiciary, and the guarantee of freedom of belief and education.



































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