The proposed paper will analyse the state-democracy nexus on the Baltic Seaboard, while comparing the new democracies (Latvia and Estonia) with the old ones (Sweden and Denmark). It allows us to contrast the classical state-democracy nexus model (the state first, then democracy) with a special model, in which a relatively well-functioning democracy and considerable state-capacity emerge almost simultaneously within a short time-span (for Estonia and Latvia mostly 1991 – 2004). However, considering the limited space of the paper, we will focus more on the new democracies and treat the old democracies as the important normative reference points. While focusing predominately on Latvia and Estonia, the paper seeks to provide a novel three-fold contribution to the state-democracy nexus debate, while exploring three factors which impact has not been fully understood: (1) the impact of the mixed (semi-)colonial legacies (for Estonia and Latvia the Baltic German and the Russian/Soviet legacies – both had a crucial impact on the state-building and the democratization potential) (2) the role played by the EU and NATO (so far the influence of the international actors has not been sufficiently explored in the state-democracy debate); (3) the early transition reform trajectories (there is still a persistent divergence between Estonia and Latvia concerning the quality of democracy and the state capacity, and it seems that the reform trajectories in the 1990s can explain that divergence). The proposed study is predominately qualitative, but utilizes the state capacity index by Hanson and Sigman (2013), the Bertelsmann Transformation Index, and the data from the V-Dem project. The preliminary results indicate that the state-democracy nexus theory must pay more attention to the impact of the international actors, early transition reforms and colonial legacies – these factors are not relevant for old democracies, but seem essential for the new ones.