Recent statements by EU officials both in Sarajevo and in Brussels have announced a shift in the EU’s priorities regarding BiH. The Sejdic-Finci issue, long regarded as the most pressing obstacle on BiH’s road to EU membership, will be set to one side, at least for now. In the words of EU foreign affairs chief Catherine Ashton, the EU is looking to draft a “compact for growth and jobs,” a unified approach that will include big-picture economic reforms and programs that stimulate employment, all with the aim of “mov[ing] the country forward in its European perspective.” This shift in priorities from constitutional restructuring to economic growth is welcome, indeed overdue.
There are two keys to successful EU economic policy intervention. The first is entity and cantonal agreement and ownership. It is a sad fact that one of the reasons for the slow pace of governmental reform in BiH is the past behavior of various High Representatives. Without legal authority, High Representatives imposed new laws and institutions onto the structure established by the BiH Constitution. Many of these non-consensual changes transferred mandates from entity to central level, creating new agencies and ministries in Sarajevo. These have become bigger and more expensive each year. They refuse transparency or accountability.
The second key to success is EU recognition of BiH’s decentralized structure. The EU and the entity and cantonal governments should tailor programs to the specific conditions in each location. Previous interventions that imposed BiH-level institutions—in addition to violating the Constitution—have served only to bloat the BiH budget, while failing to deliver services to citizens.
According to a 2008 paper by the UNDP Bratislava Regional Centre:
The need for decentralization and devolution of power from central to local authorities has become one of the priorities in changing the state in most [former socialist block] countries to make it more democratic and efficient in delivering public services and promoting economic and social development.¹
The same paper observes, “Decentralization increases opportunities for participation and accountability, thereby deepening democracy and increasing democratic legitimacy. This is especially so where a country’s population is diverse, and needs and preferences vary between regions.”
A 2009 study commissioned by the Assembly of European Regions (AER), a network of regions from 33 European countries, found that “decentralisation, amongst other factors, has a significantly positive influence both on the level and the dynamics of economic performance of countries and regions: The higher (ceteris paribus) the decentralisation indicator, the higher the economic performance.”² The AER study emphasizes that benefits of decentralization are greatest in countries where policy preferences differ based on region. According to the study:
The demand for public goods can differ substantially between regions because the preferences of citizens are formed by regional traditions. . . . The bigger the differences in regional preferences within a country, the greater the potential benefits from decentralisation. By supporting decentralisation different preferences of the population can be better incorporated into policy. This helps to ensure that an individual’s needs will be considered more adequately.
Both practically and legally, BiH is a decentralized country composed of the two entities. The EU’s new economic focus could make a real difference in the lives of BiH citizens, if implemented at the local level where citizens will be directly affected.
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1. Decentralization in the Europe and CIS region, Democratic Governance Practice, UNDP Bratislava Regional Centre, April 2008.
2. From Subsidiarity to Success: The Impact of Decentralisation on Economic Growth, Part 2: Decentralisation and Economic Performance (May 2009) (researched and produced by BAK Basel Economics, commissioned and published by Assembly of European Regions) (“From Subsidiarity to Success”).
