REVIEW #8: The Curious Case of (De)Centralization in Bosnia and Herzegovina

Bosnia and Herzegovina is an exceptional case for liberal debate over decentralization. The political and legal order created by the international community in Dayton, Ohio (1995) resulted in a country divided into two parts, with one district.

Half of the country, called the entity of Republika Srpska, is extremely centralized with only a small percent of local (municipality) political power. The other half, the entity of the Federation of Bosnia and Herzegovina, is extremely decentralized and consists of ten cantons with ten cantonal prime ministers and more than one hundred cantonal ministers.

For a long time, it was considered that this kind of political structure was the weakness of Bosnia and Herzegovina and the reason for its future disintegration as a state. But for twenty-three years, Bosnia and Herzegovina has managed to exist and in the last few years more and more authors and researchers acknowledge that its complexity and decentralization are the main reason why Bosnia and Herzegovina survives as a state, satisfying the needs of political elites.

On the other hand, this situation provides an opportunity for excellent insight into the differences between the centralized and decentralized part of Bosnia and Herzegovina, with the highlight on the state of personal and any other freedoms.

This phenomenon, however, poses a number of questions: Are there any (political/economic and other) differences between the centralized and decentralized part of Bosnia and Herzegovina? What are the consequences of the complex political and legal structure of Bosnia and Herzegovina in the context of personal freedom of its citizens? What is the status of personal freedoms in Bosnia and Herzegovina, and what is the greatest challenge in this area?

Another important question that must be addressed is why is the (democratic) decentralization important for liberals? First of all, it improves the general and personal freedoms of the individuals and is an essential factor in achieving economic growth – which may also be observed in the case of Bosnia and Herzegovina. Democratic decentralization in the long run leads to the advancement of personal freedoms. Still, complexity can result in problems regarding the rule of law, which is shown by the Human Freedom Index, as the most problematic part of personal freedoms in Bosnia and Herzegovina.

Introducing Decentralization in Bosnia and Herzegovina

The small European country of Bosnia and Herzegovina (B&H) is truly unique when it comes to the relationship of decentralization and centralization. The peculiar constitutional arrangement of the country, which was primarily crafted due to war during the 1990s and the intervention of the international community, created a decentralized state structure that alongside the central government has entities, cantons, and municipalities as the levels of local government.

Such a complex state structure provides specific insight into the consequences of (de)centralization and the comparison of its effects. It also enables an analysis of the impact of decentralization on the human rights of citizens of B&H. Before analyzing the specifics of this country, it is necessary to consider the essence and all the advantages of the decentralization process, especially from the libertarian position.

What is Decentralization?

Decentralization is a process that significantly marks the first decades of the 21st century. Whether it is the decentralization of the Internet and the rise of cryptocurrencies like Bitcoin, or the fact that the OECD area has grown more decentralized over the last two decades, the fact is that decentralization is here and is happening all around us. Although there has been a trend of centralization in the last two hundred years1, the world has been turning to decentralization, especially in the context of the development of information technologies primarily linked to the Internet.2


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1 (2014) WSJ Reports on the Megatrend of Decentralization. Available [online]:

2 Sharma, G. (2014) Weekend Read: The Imminent Decentralized Computing Revolution. Available [online]: