The Austrian Empire's failures throughout history had many causes: domestic political instability, pressure from hostile powers abroad, the ravages of war, economic decline, weakness at the top, and the incompetence of those carrying out its policies.
All these causes compounded one another, bringing about the Austro-Hungarian Compromise. It let the Austrian Empire cling to life for several decades, but that was all it could do.
If Prince Schwarzenberg's policies had been allowed to continue, if Alexander Bach had received the support of the Empire's leaders, if the historical Franz had possessed enough resolve, if the people carrying out the policies hadn't been both vicious and stupid, but had implemented them properly—
If the Austrian Empire hadn't suffered successive defeats at the Battle of Magenta and the Battle of Solferino, if Prussia hadn't outmaneuvered it in the Prusso-Danish War, if it hadn't suffered a crushing defeat at the Battle of Königgrätz—
But there were no endless ifs, and there was no need for them.
Franz didn't like to gamble, whether he held the advantage or had his life hanging by a thread.
Due to certain traditions and cultural beliefs, the Austrians—and even the Europeans—had a blind faith in decentralization and economic sanctions.
Franz had no intention of dividing the Lands of the Crown of Saint Stephen into four parts: Hungary, Slovakia, Croatia, and Transylvania.
Or rather, Franz didn't intend to divide it into only four parts. He planned to split Hungary—its current territory—into three: Western Hungary, Central Hungary, and Eastern Hungary.
Nor did Franz intend to appoint countless governors to keep one another in check. He planned to unite Western Hungary, Central Hungary, the plains of southwestern Slovakia, and the countless Imperial Manors scattered throughout the region into a new Imperial Territory.
That was right. Rather than let the Hungarians repeatedly