New ESI report - The authoritarian temptation

10 December 2004

In recent weeks, South Eastern Europe has taken a series of extremely important steps towards integration into the European Union. On 6 October, the European Commission affirmed that both Romania and Bulgaria have functioning democracies and market economies, and are on track to join the European Union in January 2007. On the same day, it announced that Turkey fulfils the Copenhagen political criteria, and recommended opening membership negotiations. On a visit to Skopje, Commission President Romani Prodi remarked on the progress that Macedonia has made since submitting its membership application earlier this year. Croatia has already been accepted as a candidate, and will begin accession negotiations early in the new year.

It is the dramatic progress of its neighbours that highlights just how much ground Bosnia and Herzegovina has lost recently simply by standing still. Bosnia is still unable to begin negotiations for a Stabilisation and Association Agreement - the very first milestone on the long road to Europe. With its economy and political system still far from satisfying the Copenhagen criteria, the prospect of full EU membership seems decades away.

In fact, Bosnia and Herzegovina is more internationally isolated today than it was five years ago. It remains on the black list of countries for which a visa is required to travel to the European Union. Together with Serbia-Montenegro, it is one of the last countries in Europe excluded from NATO's Partnership for Peace programme, which with members like Turkmenistan, Belarus and Tajikistan has not traditionally been considered an exclusive club. It has not yet joined the World Trade Organization, whose 147 members include Moldova and Angola. The only major European organisation that Bosnia has been able to join is the Council of Europe. Yet in August 2004, the Parliamentary Assembly of the Council of Europe reviewed the quality of Bosnia's democracy, and questioned "the extent to which the current role of the [High Representative] is compatible with membership of Bosnia-Herzegovina in the Council of Europe" (Resolution 1384).

International isolation is not the only concern: over the past seven years, Bosnia and Herzegovina's economy has performed consistently worse than even the most pessimistic projections of its international advisers. In 1995, the World Bank hoped that the country would become creditworthy by 1998; now, the most optimistic projections are for 2007. Privatisation has failed to prevent the collapse of industries and very few strategic enterprises have found buyers. The international competitiveness of Bosnian products is low, and the progress of its neighbours towards the EU makes it even more difficult for Bosnia to attract foreign investment. A slight improvement in export performance over the past year cannot mask the fact that, in the first eight months of 2004, Bosnia and Herzegovina exported less to the European Union than Gaziantep, a Turkish city of 1.3 million inhabitants not far from the Syrian border.

As a result, Bosnians face a desperate shortage of employment. Less than a third of Bosnia's working-age population participates in the labour force, compared to an EU average of 64 percent, and employment rates among women and young people are among the lowest in Europe. Forced out of the formal economy, many Bosnians are scraping together a living from itinerant labour and informal trade, returning to a life of subsistence agriculture, or simply leaving the country.

The overall conclusion is stark: in the past five years Bosnia and Herzegovina has not just failed to catch up, it has fallen further behind the rest of Europe. A recent UNDP Early Warning Report commented:

"As a country and as a society, Bosnia and Herzegovina has been politically stagnating for several years now… This protracted state of affairs, well over nine years now, can no longer be seen solely as a consequence of the war."

Given the many successes of the peace process and the constant reform of laws and institutions over the past few years, the urgent question is: why is Bosnia and Herzegovina stagnating, and what can be done to change this dynamic?

Over the past two years, ESI has been investigating the challenges of underdevelopment and the constraints on effective governance in Bosnia and Herzegovina. This led us to propose a series of concrete measures that might help to break the current cycle. In summer 2003, we recommended a fundamental change to the current mode of international engagement, in order to push more responsibility onto Bosnia's elected governments (After the Bonn Powers). In early 2004, we suggested a practical way to simplify Bosnia's complex constitutional structure and strengthen its federal system (Making Federalism Work and Waiting for a Miracle).

We now publish a report presenting the main body of our research into Bosnia's post-war political economy, under the title:

Governance and Democracy in Bosnia and Herzegovina: Post-Industrial Society and the Authoritarian Temptation

This report is part of a Governance Assessment funded by the United Kingdom's Department for International Development, which was out by ESI with a team of Bosnian and international researchers. It has been developed through presentations to a large number of different audiences - politicians, international organisations and civil society - across Bosnia and Herzegovina and in different European capitals. The report is accompanied by a Resource Kit of useful documents on Bosnia's political economy, and a short documentary film portraying the effects of social and economic change in a Central Bosnian municipality (A Bosnian Story).

The central conclusion of the Governance Assessment is that, despite extensive restructuring and institution building at all levels, the most striking feature of government in Bosnia and Herzegovina is its passivity in the face of a growing social and economic crisis.

Bosnia and Herzegovina is suffering from a combination of severe industrial decline and widespread rural underdevelopment. These deep structural problems are legacies of fifty years of authoritarian development, and are not dissimilar to those found in other parts of post-communist Europe. What sets Bosnia apart is a vacuum of credible policies in the most critical development areas: industrial policy, agriculture, natural resource management, spatial planning, education and social welfare. Though Bosnian governments are aware, in general terms, of the scale of the crisis facing their country, their policies are often little more than broad statements of good intentions. They are not based upon hard information, or any real analysis of the problems. They are not developed in consultation with the groups they are supposed to help. They do not affect what public institutions actually do. Nor do they affect the way public money is actually spent.

This passivity is in itself a legacy of authoritarian development. Bosnia's political elites have a tradition of looking to outsiders to provide the policies and resources for development. There is widespread distrust of participatory policy-making - the intense process of debate, compromise and constituency-building among different interest groups that characterises the democratic process. Political elites seem to prefer a style of politics where the public interest is determined by experts, outside the political process. This attitude is reinforced by weak mobilisation of interest groups and low expectations of government on the part of ordinary citizens. As a result, Bosnian governments at all levels are not under strong pressure to improve their performance. This dynamic produces governments that are unresponsive, unaccountable and often strikingly out of touch with the society they are supposed to serve.

This deep distrust of policy making through bargaining and compromise among different interest groups constitutes Bosnia's authoritarian temptation. It has been reinforced by the intrusive nature of international engagement in Bosnia, and by the peculiar political economy of the post-war period. The traditional dependence on external funding has shifted to the reconstruction programme, while the international mission now takes the role of the external policy-maker.

This report is a description of the roots of the passivity of the Bosnian state. It offers no new recommendations, road maps or benchmarks, but aims to provoke debate within Bosnian society as to how to improve the quality of government. Its central premise is simple: to move towards Europe, Bosnia and Herzegovina needs to overcome its authoritarian temptation and embrace a genuinely democratic political process. For the international community, this means leaving responsibility in the hands of elected governments, rather than feeding old habits of dependency. For the European Union, it means offering Bosnia the kind of support offered to candidate countries like Bulgaria, Romania and Turkey. The sooner this happens, the sooner Bosnia and Herzegovina will truly set out on the path towards Europe.

Best regards,

Gerald Knaus