Peace, democracy, prosperity, stability and growth are the foundations of
modern, western-styled democracies. These basic principles are the result of
a long, intrinsic process of state-building, democratisation and liberalisation
in the so-called western countries.
When it comes to “exporting” these ideals, when it comes to “westernisation”
of transforming countries, there is a contradiction between the path
and the goal, namely: liberal means with as little of non-market influences
in economic life as possible; democratic means the political order and its actors
are to be chosen by the people of the country. By forcing countries into
westernisation,the bureaus and governing bodies and officials as well as the
noise that surrounds them produce exactly the opposite
Table of Contents
1. Introduction
2. The political Economy of post-Dayton BiH
2.1 The state and political reforms
2.2 Institutions
2.3 Cladenstine Economy
3. Conclusion
Objectives & Topics
This paper examines the political and economic consequences of international intervention in Bosnia and Herzegovina, focusing on how external efforts to establish a liberal democracy have led to the creation of a rentier economy, bureaucratic inefficiency, and the preservation of ethnic divisions.
- The impact of international intervention and the "Dayton" structure on domestic sovereignty.
- Mechanisms of rent-seeking behavior within the political and economic elite.
- The role of the High Representative and its effect on democratic accountability.
- The influence of international aid and NGO funding on local political and economic development.
- The persistence of ethnic division as an economic rationale for political actors.
Excerpt from the Book
The state and political reforms
“State plays the major role in any reform process. Because of that, a much wider concept has to be used than that of a provider of public goods, although that remains to be one of its crucial functions.”[16]
On the other hand the state intervenes in economic life by levying taxes, subsidizing, acting as supplier and demander and it does all this while being unable to “engage in economic calculations and therefore sufferimg from severe inefficiencies.”[9]
Namely the state is one of the main sources of rents existing in an economy and these rents do not only change the economy directly but also indirectly by changing the behaviour of the economic actors. It might become, given the relative attractiveness, the most attractive form of economic action to become a rent-seeker and not to engage in productive areas of economic life[11]. The economy might become a renteer economy, where every senseful economic activity includes the competition for the rent that exists not due to a market outcome but due to the transfer of funds[19].
Summary of Chapters
Introduction: This chapter outlines the inherent contradiction between the goal of establishing liberal democracy through external, often non-democratic, international intervention in Bosnia and Herzegovina.
The political Economy of post-Dayton BiH: This chapter analyzes how the Dayton Peace Agreement created a complex, state-dependent economy characterized by rent-seeking, institutional weakness, and a reliance on international aid that incentivizes the maintenance of ethnic conflict.
Conclusion: This section summarizes how international state-building efforts in Bosnia and Herzegovina have unintentionally stifled proper development by reinforcing ethnic separation as the primary economic and political rationale for elites.
Keywords
Bosnia and Herzegovina, Dayton Peace Agreement, International Intervention, State-building, Rent-seeking, Political Economy, Liberal Democracy, Ethnic Separation, High Representative, Institutional Reform, Clandestine Economy, Foreign Aid, Public Goods.
Frequently Asked Questions
What is the core subject of this paper?
The paper explores the political and economic consequences of international interventions in Bosnia and Herzegovina, specifically how they affect state-building and democratic development.
What are the primary themes discussed?
Key themes include the impact of international bureaucracy, the nature of rent-seeking economies, the institutional legacy of the Dayton Peace Agreement, and the relationship between ethnic division and political elites.
What is the main research objective?
The objective is to analyze how the international intervention, while intending to foster a stable, liberal democratic country, has instead created a system that hinders economic growth and maintains ethnic friction.
Which scientific approach does the author use?
The author employs a political economy perspective, utilizing institutional economics and public choice theory to assess the inefficiencies of the Bosnian state.
What topics are covered in the main body?
The main body covers political reforms, the role of international institutions, the emergence of a clandestine economy, and the influence of international funding on civil society and local governance.
Which keywords best describe this work?
Relevant keywords include Bosnia and Herzegovina, Rent-seeking, International Intervention, Dayton Peace Agreement, and State-building.
How does the author explain the failure of economic reform in Bosnia?
The author argues that because rent-seeking is more profitable than productive economic activity, political elites have a direct incentive to maintain the status quo and ethnic divisions rather than pursue reforms.
What role does the High Representative play in the author's argument?
The author points to the High Representative as a figure with absolute, non-elected power, which undermines local sovereignty and renders public elections in Bosnia largely symbolic rather than functional.
Why does the author consider NGO funding in Bosnia problematic?
The author suggests that international funding for NGOs creates another layer of rent-seeking that attracts educated individuals away from productive economic sectors, while making these organizations beholden to foreign donors rather than local needs.
- Quote paper
- Manuel Mahler-Hutter (Author), 2010, Aspects of the Political Economy of Bosnia and Hercegovina, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/194490
