Economics & Peacemaking: Bosnia and Herzegovina

This study reviews the important economic lessons of post-conflict Bosnia and Herzegovina, in particular examining the impact of the political settlement on the post-conflict economy and the hurdles posed by a fragmented and ethnically divided state, the efficacy of the international recovery and reform programme, the consequences of a weak investment and trade strategy and the failure to develop the local private sector. The overarching economic lesson is that the structure of the political settlement controls the nature of the post-conflict economy, so it is of utmost importance that political progress is structured in a way that encourages optimal economic development. Economic disparities and poor financial prospects endanger a fragile peace.