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Austria-Hungary was a loose federation (1867-1918) in which the kingdom of
Hungary enjoyed self-government and proportional representation in joint
affairs (principally foreign relations and defence) with the western and
northern lands of the Austrian Empire under the Emperors (who were also
Kings of Hungary) of the Habsburg dynasty.

The non-Hungarian part is often referred to as Cisleithania because most of
its territory lay west (or to "this" side, from an Austrian perspective) of
the Leithe river (though Galicia to the north-east was also a part), but in
official Austrian parlance its constituent provinces were known collectively
as "the lands represented in the Reichsrat (the Imperial council)",
Cisleithania's parliament.

The Ausgleich ("compromise") of February 1867 which inaugurated the Empire's
dualist structure in place of the former unitary Austrian Empire (1804-1867)
was a result of the latter's declining strength and loss of power in Italy
(war of 1859) and Germany (Austro-Prussian War, 1866) and continued
Hungarian dissatisfaction with rule from Vienna following Austria's
suppression (with Russian support) of the Hungarian revolution of 1848-1849.

In particular, Hungarian leaders demanded and received the Emperor's
coronation as King of Hungary as a reaffirmation of Hungary's historic
privileges, and the establishment of a separate parliament at Budapest with
the powers to enact laws for the historic lands of the Hungarian crown,
though on a basis which would preserve the political dominance of ethnic
Hungarians (more specifically of the country's large nobility and educated
elite) and the exclusion from effective power of the country's large
Romanian and Slav minorities.

Relations over the next half-century between the two halves of the Empire
(in fact the Cisleithan part contained about 57% of the combined realm's
population and a rather larger share of its economic resources) were
punctuated by repeated disputes over shared external tariff arrangements and
the financial contribution of each government to the common treasury. Under
the terms of the Ausgleich, these matters were determined by an agreement
which was to be renegotiated every ten years, which created political
turmoil each time the agreement was up for renewal. The disputes between the
halves of the empire culminated in the mid-1900s in a prolonged
constitutional crisis triggered by disagreement over the language of command
in Hungarian army units, and deepened by the advent to power in Budapest
(April 1906) of a Hungarian nationalist coalition. The common arrangements
were renewed provisionally (October 1907, November 1917) on an "as is"

The dominant ethnic group in each part of the Empire constituted a minority
in the area which it controlled: Germans numbered only some 36% of
Cisleithania's population, and Magyars slightly under a half of Hungary's.

Czechs (the majority in the Austrian crownlands of Bohemia, Moravia and
Austrian Silesia), Poles and Ukrainians (in Galicia), Slovenes (in Carniola,
Carinthia and southern Styria, mostly today's Slovenia) and Croats, Italians
and Slovenes in Istria each sought a greater say in Cisleithan affairs.

At the same time, Magyar dominance was contested by the majorities of
Romanians in Transylvania and eastern Banat, Slovaks in today's Slovakia,
Croats and Serbs in crownlands Croatia and Dalmatia (today's Croatia),
Bosnia and Herzegovina and provinces known as Vojvodina (today's northern
Serbia). The Romanians and the Serbs were looking also to union with their
fellows in the newly-founded kingdoms of Romania and Serbia, respectively.

Though Hungary's leaders were on the whole less willing than their German
Austrian counterparts to share power with their subject minorities, they
granted a large measure of autonomy to the kingdom of Croatia in 1868,
parallelling to some extent their own accommodation within the Empire the
previous year.

The Imperial (Austrian) and Royal (Hungarian) governments differed also to
some extent in their attitude toward the Empire's common foreign policy,
leaders in Budapest fearing particularly annexations of territory which
would add to the kingdom's non-Hungarian populations, though the Empire's
alliance with Germany against Russia from October 1879 (see Dual Alliance,
1879) commanded general acceptance, the latter power being seen as the
principal external military threat to both parts.

The territory of Bosnia and Herzegovina, occupied by Austro-Hungarian forces
since August 1878 under the Treaty of Berlin was annexed in October 1908 as
a common holding under the control of the finance ministry rather than being
attached to either government, an anomalous situation which led some in
Vienna to contemplate its combination with Croatia in a third component of
the Empire combining its southern Slav regions under the domination of Croat
leaders who might be more sympathetic to Vienna than Budapest.

The outbreak of World War I in July-August 1914, triggered by the
assassination by Bosnian Serb militants in the Bosnian capital Sarajevo of
Franz Ferdinand, Archduke of Austria, heir to his childless uncle the
Emperor Franz Josef, brought the Empire into conflict with Russia and her
allies France and the United Kingdom as well as Serbia and (from May 1915)
Italy. Austria-Hungary was largely responsible for the start of the war.
Many in the leadership of the country feared the loss of ethnically slavic
territories to Serbia, just as they had lost ethnically Italian areas to
nationalist movements sweeping through Italy, so they decided to confront
Serbia militarily before it could incite revolt in the southern lands of the
Empire. Using the assassination as an excuse they presented a list of
demands they knew Serbia would never accept, and launching a war when they
were turned down. Though Austro-Hungarian troops initially defended the
routes into Hungary and repulsed Italian advances in Gorizia, even advancing
into enemy territory following German-led victories in Galicia (May 1915)
and at Caporetto (October 1917). The war officially concluded for
Austria-Hungary when it entered an armistice with the Allies on November 3, 1918.

The strain of war, enemy blockade and increasing anti-war agitation among
socialists and national minorities intent on taking power, led to the
Empire's disintegration in October-December 1918. Throughout the war the
Austro-Hungarian war effort had become more and more subordinate to the
direction of German planners.

While first the Czechs (October 28) and then the Hungarians proclaimed their
independence, Transylvania's majority joined Romania (taking with them a
large Hungarian minority) and the southern Slav lands united with Serbia as
the State of the Serbs, Croats and Slovenes (later Yugoslavia). Both Austria
and Hungary became republics, exiling the Habsburg family in perpetuity. A
pro-monarchist revival in Hungary after the communist revolution and
Romanian intervention of 1919 led to the country's formal reversion to a
kingdom (March 1920), but with the throne vacant. Attempts by the last
Emperor, Charles I, to regain power in Budapest (March, October 1921) ended
in his deportation to Madeira, where he died the following year.

Historical views of Austria-Hungary have varied throughout the 20th century:
— Historians in the early part of the century tended to view the
Habsburg polity as despotic and obsolete.
— Subsequent experience of the region's inter-war "balkanization" and
more recent nationality conflicts, coupled with wider efforts at European
federalism, have resulted in a more favorable assessment of Austria-Hungary.
— One controversy among historians remains whether the Empire's
collapse was the inevitable result of a decades-long decline or whether it
would have survived in some form in the absence of military defeat in World
War I.
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