Anti-corruption efforts in Bosnia and Herzegovina (BiH) are impeded by its decentralized political system, weak law enforcement, and engagement with international aid after the 1992-1995 Bosnian War. The United States Agency for International Development (USAID) must fund more research in anti-corruption and informality in BiH, encourage rule-of-law norm-building in its aid packages to BiH, and renew its “Assistance to Citizens in the Fight Against Corruption” BiH program in 2024.
Policymakers have struggled to address corruption in post-Yugoslavia BiH for decades. In 2022, Transparency International—who scores public corruption on a scale of 0 (very corrupt) and 100 (very clean)—gave BiH a Corruption Perception Index score of 34, which aligns with the downward trajectory of BiH’s score over the last five years.[i] However, the roots of BiH’s losing struggle against corruption trace back to the breakup of the former Yugoslavia and its following political and ethnic conflicts. Although corruption existed in the former Yugoslavia, the uncertainty and crises of the late 1990s and early 2000s provided new pathways in BiH for criminal and political actors to abuse the transitioning governmental and economic structures for their personal gain.[ii] The wars in the Balkans coupled with the transitions to a market-based economy and a formally democratic political system led to instability in BiH that profoundly altered its social norms surrounding corruption.[iii] The European Union (EU) and other international actors have worked with the BiH government to implement anti-corruption legislation and entities, but corruption still perpetuates under the new legislation. Rather than disappearing as BiH stabilized in the post-war period, corruption flourished under new power dynamics between political elites, criminal actors, and ordinary people.
In BiH, corruption remains a key concern of its citizens. A high perception of corruption has perpetuated among citizens for most, if not all, of the post-war period.[iv] In 2011, the United Nations Office on Drug and Crime (UNODC) conducted a study on the individual experiences of bribery across the different sectors in BiH.[v] They found that even though citizens viewed corruption as one of the largest challenges to their country, they still persisted in petty corruption practices themselves.[vi] BiH citizens regularly paid bribes, primarily in cash, to speed up or finalize procedures, avoid payments of fines, or receive better treatment.[vii] Jasmina Mangafic and Ljiljan Veselinovic conducted a similar study funded by USAID nearly a decade later in 2020, which showed little improvement from 2011.[viii] The trends of high perception of public corruption and frequency of petty corruption found in the 2011 UNODC report continued to affect health, education, employment, and public procurement in 2020.[ix] Anti-corruption efforts in the former Yugoslavia are often met with the informal idea of “ne talasaj”—translated “don’t make waves”—which copes with unfair unwritten rules by conforming to, rather than resisting, informal social norms.[x] Mangafic and Veselinovic suggest that the stagnant high levels of petty corruption across various sectors of BiH’s economy show that corruption is not a violation of a social norm, rather it became the norm as individual citizens felt the need to respond to public corruption with bribery.[xi]
International anti-corruption policy in BiH has fixated on establishing formal mechanisms for anti-corruption with the assumption that legitimate legislation will weaken corruption. But, various actors in BiH have taken advantage of these formal mechanisms as ways to conceal their political corruption activities through additional informal norms originating from the immediate post-war period.[xii] Krista Lee-Jones with the U4 Anti-Corruption Resource Centre found in her research that political corruption is widespread across all levels of BiH’s government, including undue political interference and influence, clientelism, patronage, selective prosecution of high political elite, bribery, and abuse of public office.[xiii] Michael Pugh and Boris Divjak describe the relationship between formal and informal institutions in BiH as a “culture of corruption” that has rooted in its society through its political elites.[xiv] To use Gretchen Helmke and Steven Levitsky’s typology, BiH’s informal institutions of corruption can be “substitutive” in replacement of ineffective, unenforced formal institutions or “accommodating” with the formal anti-corruption institutions to perpetuate corruption with minimal consequences.[xv] The hybridity of formal and informal institutions in post-war BiH pushes against the Western norms of anti-corruption and prevents their integration into its society.
This previous research on both petty and public corruption in BiH provides the foundation to understand how engrained corruption is in the post-war culture; however, more work on effective anti-corruption measures in BiH is needed. USAID—responsible for the distribution of American foreign assistance—maintains that anti-corruption “…is essential to fulfilling [its] mission of strengthening democratic societies, and advancing a free, just, and peaceful world.”[xvi] With BiH as one of its countries of focus, USAID aims to cultivate a strong civil society and accountable public institutions with a focus on exposing and restraining corruption in BiH.[xvii] USAID’s anti-corruption development assistance policies for BiH must be attuned to the legacy and perpetuation of informal norms surrounding corruption, otherwise its efforts may exacerbate corruption.[xviii] The aftermath of the Bosnian War and ensuing political crises created specific anti-corruption problems for BiH. This paper aims to identify some of the anti-corruption challenges and failures unique to BiH through the lens of informality, so that USAID policymakers can avoid repeating past mistakes of other international organizations and continue addressing the complexities of anti-corruption.
Layers upon layers of causal factors complicate anti-corruption policy. Yet, scholars and policymakers have often attempted to solve issues of corruption with “one size fits all” approaches that neglect the nuances of a specific social system and the potential ripple effects unique to that system. Paul M. Heywood, in his article “Rethinking Corruption: Hocus-Pocus, Locus, and Focus,” outlines a few of these major shortcomings of anti-corruption research. First, he warns against the tendencies to find a “magic bullet” solution that will solve issues of corruption with “hocus-pocus” policy solutions.[xix] Corruption cannot be solved with the same set of policy tools in every case. Second, Heywood identifies the flaws in confining the study of corruption to a “locus” of only nation states. The lines between the public and private spheres are too blurred in many countries to effectively limit a study of corruption to the nation state.[xx] Finally, he addresses researchers that have a “focus” that avoids corruption’s many levels of complexity. Rather, he argues, anti-corruption research should clarify types of corruption, actors involved, and norms associated, so that policy recommendations can be tuned to a specific case.[xxi]
Rasma Karklins provides a typology that outlines three levels of interaction in corruption: everyday interaction between officials and citizens (Level I), interaction within public institutions (Level II), and influence over political institutions (Level III).[xxii] Level I everyday interactions primarily revolve around bribery practices between officials and citizens; however, her typology also includes intentional over-regulation to extort money out of citizens. Karklins’ Level II interactions within public institutions include abuse of public funds for personal gain, malpractice from privatization and public procurement, and influence-peddling with clientelism. Level III involves state capture, collusive power networks, election interference, misuse of legislative or judicial power, political blackmail, or manipulated media. This typology provides language to explain the political nature of corrupt acts in BiH, while also accounting for the roles of everyday citizens and the private sector.[xxiii] The focus of this paper is on Level III public corruption, since BiH’s petty corruption remains intertwined with public corruption of political elites. However, the extent to which changes in public corruption correlates to frequency of petty corruption in BiH is outside the scope of this paper.
A “magic bullet” solution to anti-corruption is not possible; however, additional insight into the “locus” of unique post-war relationships between BiH public and private actors with a “focus” on the contrast between Level III informal and formal institutions will provide an opportunity to avoid repeated anti-corruption policy failure.[xxiv]
Many scholars point to the decentralized nature of the BiH political system as a key complication for anti-corruption policies, but the norm of corruption within a decentralized system emerged in the 1990s. Roberto Belloni points out in his book, The Rise and Fall of Peacebuilding in the Balkans, that the lack of formal structures in wartime allowed for new informal actors to emerge, who based their political legitimacy on patronage and violence.[xxv] Nationalist politicians took advantage of the 1990s political crises by offering protection and support to specific ethnic groups. The fear of ethnic rivalry that persisted into the post-war period perpetuated this patronal legitimacy.[xxvi] Belloni calls this phenomenon an “unspoken pact” that solidified corruption as the norm for ensuring political power in BiH.[xxvii] Criminal structures became intimately tied to state structures, as public funds became mismanaged and redistributed—Level II type corruption—to maintain clientele relationships.[xxviii] Lee-Jones observed in her research that the main governing parties of BiH are run through patronage networks, which took advantage of international aid and economic liberalization policies, according to Belloni.[xxix] This state capture, moving into Level III, led to the distrust in public institutions and dependence on informal networks seen in everyday citizens still today.[xxx]
On the formal level, the current political system exists to address the ethnic and nationalist challenges following the Bosnian War. In 1995, the Dayton Accords ended the Bosnian War and established a tripartite presidency to ease ethno-religious violence.[xxxi] Under this agreement, the Federation of BiH elects a Croat and a Muslim Bosniak president, while Republika Srpska elects a Serbian president, and the three presidents rotate every eight months.[xxxii] The continual rotation between the three presidents leaves room in the system for a lack of coordination on anti-corruption efforts and a lack of accountability for corrupt activities. Furthermore, Lee-Jones notes that political elites use the ongoing political rhetoric surrounding nationalism and ethnic division stemming from the 1990s conflict, which acts as an additional barrier to anti-corruption cooperation.[xxxiii] To the benefit of these patronal network actors, public corruption runs under the radar of a decentralized system.
Decentralization also hinders the prosecution of corruption in BiH. Various judicial, law enforcement, and anti-corruption entities are responsible for the investigation and prosecution of corruption cases.[xxxiv] Anti-corruption jurisdiction is split between the following bodies: the Agency for the Prevention of Corruption and Coordination of the Fight Against Corruption, which is limited in its functional powers; the Prosecutor’s Office, which is confined to the narrow prosecution of specific crimes; the High Judicial and Prosecutorial Council, which is hindered by internal conflict of interests; the Public Procurement Agency, which also faces conflict of interest issues; the Central Election Commission, which is restricted in its response to election financing complaints; the State Investigation and Protection Agency, which primarily collects and processes information for international laws; and the Auditor General, which lacks investigative and supervisory capabilities.[xxxv] Further decentralization occurs in the formal legislation itself. BiH’s legal and institutional framework for anti-corruption include four criminal codes; however, these anti-corruption laws are inconsistent in their legislation and application across the judiciary.[xxxvi] Although money laundering, political party financing, conflict of interest, and public procurement laws have been reformed, their changes are mostly cosmetic and ineffective, as asset declarations drag in their processing or lack updates.[xxxvii]
Even though a legislative framework of anti-corruption exists in BiH, corruption persists. In efforts to improve BiH’s status in the EU accession process, the European Commission produced a report in 2021 that showed BiH’s progress in achieving EU criteria.[xxxviii] The EU Commission found that BiH exhibited “systematic shortcomings” in law enforcement cooperation, intelligence, effectiveness, and vulnerability to political interference.[xxxix] Selective prosecution of corruption cases and lack of independence of the judiciary due to state capture, both Level III type corruption, were two major concerns for the EU’s assessment of BiH’s democratic institutions.[xl] Few public officials submit their financial reports and asset declarations, as conflict of interest sanctions remain lenient.[xli] The judiciary, according to the EU Commission, produces an “alarmingly low number” of final convictions in corruption cases involving high-profile actors.[xlii] Lee-Jones writes that the executive branch “…openly exerts pressure on prosecutors’ offices by issuing demands and making threats in public” regarding judicial decision-making.[xliii] In some instances, the judiciary avoids high level corruption cases entirely.[xliv] Informal corruption networks have deeply co-opted the formal legislative system.
The failure of formal anti-corruption entities to effectively curb informal forms of corruption also finds its root in the post-war international policy. In addition to the unintended consequences of the Dayton Accords’ decentralization, international actors contributed to the new norm of corruption in BiH. During the immediate post-war period, international actors sought stability in BiH and turned a “blind eye” to the informal practices of corruption.[xlv] According to Belloni, many international actors believed that the political situation in BiH was so dire coming out of the Bosnian War that any stabilizing system—including the informal patronage networks of corruption—would be an acceptable temporary solution.[xlvi] However, in the early 2000s, when international actors started to require progress on rule-of-law issues to provide aid, they emphasized that BiH’s institutions to abide publicly by formal legislation.[xlvii] But by that point, corruption and patronage had already become the norm. One of the early pieces of BiH’s anti-corruption legislation, the “Comprehensive Anti-Corruption Strategy for Bosnia and Herzegovina,” was largely ineffective, since it served as lip service to anti-corruption reform to ensure that political elites received an income of international aid.[xlviii] The underlying informal institutions remained unaddressed, and corruption persisted.
The EU worked throughout the 21st century to promote anti-corruption in BiH through rule-of-law conditionality to EU accession, but continually ran into the issue of informal patronage norms.[xlix] According to Jasmin Hasić and Dijana Dedić, the EU used traditional enlargement tactics and criteria for BiH, instead of creating an accession package tailored to BiH’s post-war decentralized system.[l] Rather than supporting meaningful strategies for decreasing corruption, the EU unintentionally solidified the power of the local political elites.[li] EU policy—also focused on maintaining stability in BiH—provided the political elites with the belief that “…the EU will adjust to their terms, rather than the other way around.”[lii] The norm of formal acceptance of anti-corruption strategy and informal perpetuation of corruption stunted the effectiveness and legitimacy of EU anti-corruption strategies in BiH. A profound disconnect exists between the formal anti-corruption policies and the informal rules that emerged after the war.
Throughout the post-war period, international actors have presented formal pathways of improved anti-corruption institutions as the primary policy solutions for corruption in BiH. Although strengthening these formal institutions is necessary, the development of anti-corruption institutions have not been effective in curbing public or petty corruption at the informal level. We recommend the following to support USAID’s anti-corruption efforts.
The decentralized political structure creates specific difficulties for anti-corruption policy in BiH. The Dayton Accords were necessary to end the violence of 1992-1995, but the post-war system complicates long-term accountability efforts. USAID needs to fund more research projects to understand the corrupt interactions between formal institutions and informal practices. USAID funded Mangafic and Veselinovic’s 2020 research regarding the individual determinants of bribery in BiH, but more information on the actors and norms involved is needed to put together a holistic picture of corruption in BiH.[liii] Alina Mungiu-Pippidi, in her book The Quest for Good Governance: How Societies Develop Control of Corruption, calls this kind of anti-corruption research a “full diagnosis” of a specific context.[liv] International organizations need to know the specific variables that will impact their results in order to understand the ripple effects of a given anti-corruption policy. In BiH, a key variable is the post-war governance system that intertwines its formal anti-corruption institutions with its informal norms. “One size fits all” good governance initiatives will not be effective in BiH without accounting for the specific informal practices and actors associated with corruption.
BiH has a wide range of formal anti-corruption legislative and judicial entities; however, state capture and a norm of political patronage undermine their legitimacy. The abuse of public office has left the general population with a distrust in the rule of law and a dependence on informal practices.[lv] USAID should engage in norm-building initiatives to encourage anti-corruption change that goes beyond formal assent of the political elites. Mungiu-Pippidi’s work indicates that anti-corruption efforts that do not support norm-building around the rule-of-law run the risk of hurting the general population, especially the underprivileged who will face the brunt of corruption prosecution.[lvi] Rather than appeasing the political elites in the name of stability as previous international organizations did, USAID should focus on creating specific aid packages that validate prosecution of public corruption. Anti-corruption work must promote social confidence in the rule of law. Without progress in informal norms of behavior, formal initiatives of anti-corruption may unintentionally provide the means for corruption to thrive.
USAID’s current “Assistance to Citizens in the Fight Against Corruption” program, which partners with Transparency International to bolster civil society anti-corruption efforts in BiH, will end in 2024.[lvii] This program has empowered local actors to advocate not only for formal legislative change, but also for cultural change in their communities. By promoting activism at the civil society level, USAID can contribute to a long-term BiH anti-corruption strategy. This program finds ways to engage the positive aspects of informal activities, rather than only suppressing negative informal activities, such as bribery or petty corruption. The UNODC noted that “The greater the perception of corruption, the greater the probability that certain practices will persist and develop further. If it is anticipated that the payment of a bribe is required to get something done, it is more likely that the bribe will be either requested or offered.”[lviii] Unless the informal practices are met with alternative pathways to meet their needs, corruption will continue as people live in a “ne nalasaj” way in a system that turns a blind eye to the malpractice of the political elite.
Appendix A: Charts and Visualizations
Paul Heywood: “Hocus-Pocus, Locus, and Focus”
Figure 1: Paul M. Heywood’s four dimensions of corruption[lix]
Rasma Karklins: “Typology of Post-Communist Corruption”
Figure 2: Typology of Corrupt Acts[lx]
[i] “Corruption Perception Index 2022,” Transparency International, https://www.transparency.org/en/cpi/2022/index/bih. Accessed November 8, 2023.
[ii] For an example of corruption in the former Yugoslavia see Barbara Frey and Miloš Lecić, “Informal ties to political elites and path dependency in the Croatian agro sector a study of the corruption scandals of Agrokombinat and Agrokor,” Management & Organizational History 18, no. 2, (2023), 151-172.
[iii] Roberto Belloni, “Stability and the Anti-Corruption Agenda,” The Rise and Fall of Peacebuilding in the Balkans (Switzerland: Springer International Publishing AG, 2020), 62.
[iv] Jasmina Mangafic and Ljiljan Veselinovic, “The determinants of corruption at the individual level: evidence from Bosnia-Herzegovina,” Economic Research-Ekonomska Istrazivanja 33, no. 1, (2020), 2671.
[v] “Corruption in Bosnia and Herzegovina: Bribery as Experienced by the Population,” United Nations Office on Drug and Crime Reporting, 2011, https://www.unodc.org/documents/data-and-analysis/statistics/corruption/Bosnia_corruption_report_web.pdf
[vi] “Corruption in Bosnia and Herzegovina: Bribery as Experienced by the Population,” 37.
[vii] “Corruption in Bosnia and Herzegovina: Bribery as Experienced by the Population,” 21.
[viii] Mangafic and Veselinovic, 2670.
[ix] Mangafic and Veselinovic, 2671.
[x] Emina Ribo, “Ne Talasaj (Bosnia and Herzegovina, Croatia, Serbia and Montenegro),” Global Informality Project, July 5, 2022, https://www.in-formality.com/wiki/index.php?title=Ne_Talasaj_(Bosnia_and_Herzegovina,_Croatia,_Serbia_and_Montenegro).
[xi] Mangafic and Veselinovic, 2686.
[xii] Belloni, The Rise and Fall of Peacebuilding in the Balkans, 56.
[xiii] Krista Lee-Jones, “Bosnia and Herzegovina: Overview of corruption and anti-corruption,” U4 Anti-Corruption Resource Centre, 2018, 4, https://beta.u4.no/publications/bosnia-and-herzegovina-overview-of-corruption-and-anti-corruption.pdf.
[xiv] Michael Pugh and Boris Divjak, “The political economy of corruption in Bosnia and Herzegovina,” Corruption and post-conflict peacebuilding: selling the peace? (Oxon: Routledge, 2012), 99.
[xv] Gretchen Helmke and Steven Levitsky, “Informal Institutions and Comparative Politics: A Research Agenda,” Perspectives on Politics 2, no. 4 (2004): 278-279.
[xvi] “Anti-Corruption,” USAID, https://www.usaid.gov/anti-corruption. Accessed November 8, 2023.
[xvii] “FACT SHEET: Assistance to Citizens in the Fight Against Corruption in Bosnia and Herzegovina,” USAID, https://www.usaid.gov/bosnia-and-herzegovina/fact-sheet/fact-sheet-assistance-citizens-fight-against-corruption-bosnia-and-herzegovina. Accessed November 10, 2023.
[xviii] Belloni, The Rise and Fall of Peacebuilding in the Balkans, 58.
[xix] Paul M. Heywood, “Rethinking Corruption: Hocus-Pocus, Locus and Focus,” The Slavonic and East European review 95, no. 1 (2017): 21.
[xx] Heywood, 36.
[xxi] Heywood, 45. See Appendix A for a visualization of Heywood’s dimensions of corruption.
[xxii] Rasma Karklins, The System Made Me Do It: Corruption in Post-Communist Societies (Oxen: Routledge, 2015), 25.
[xxiii] See Appendix A for the full breakdown of Karklins’ typology.
[xxiv] Heywood, 21.
[xxv] Belloni, The Rise and Fall of Peacebuilding in the Balkans, 57.
[xxvi] Belloni, The Rise and Fall of Peacebuilding in the Balkans, 58.
[xxvii] Ibid.
[xxviii] Belloni, The Rise and Fall of Peacebuilding in the Balkans, 63.
[xxix] Lee-Jones, 7; Belloni, The Rise and Fall of Peacebuilding in the Balkans, 58.
[xxx] Mangafic and Veselinovic, 2686-2687.
[xxxi] Mathias Bak, “Western Balkans and Turkey: Overview of corruption and anti-corruption,” U4 Anti-Corruption Resource Centre and Transparency International, November 12, 2019, 8, https://beta.u4.no/publications/overview-of-corruption-and-anti-corruption-in-the-western-balkans-and-turkey.pdf.
[xxxii] Ibid.
[xxxiii] Lee-Jones, 6.
[xxxiv] Lee-Jones, 7.
[xxxv] Lee-Jones, 15-18.
[xxxvi] Lee-Jones, 10.
[xxxvii] Lee-Jones, 11-13.
[xxxviii] European Commission, “Bosnia and Herzegovina Report 2021,” European Union, October 19, 2021, https://neighbourhood-enlargement.ec.europa.eu/bosnia-and-herzegovina-report-2021_en.
[xxxix] European Commission, 4-5.
[xl] European Commission, 15-16.
[xli] EU Commission, 22.
[xlii] Ibid.
[xliii] Lee-Jones, 4.
[xliv] Lee-Jones, 7.
[xlv] Roberto Belloni and Francesco Strazzari, “Corruption in post-conflict Bosnia-Herzegovina and Kosovo: a deal among friends,” Third world quarterly 35, no. 5 (2014): 855; Belloni, The Rise and Fall of Peacebuilding in the Balkans, 60.
[xlvi] Belloni, The Rise and Fall of Peacebuilding in the Balkans, 60.
[xlvii] Ibid.
[xlviii] Belloni, The Rise and Fall of Peacebuilding in the Balkans, 61.
[xlix] Jasmin Hasić and Dijana Dedić, “Chasing the Candidacy Status: Tacit Contestations of EU Norms in Bosnia and Herzegovina.” Balkanizing Europeanization : Fight Against Corruption and Regional Relations in the Western Balkans (Berlin: Peter Lang, 2019), 97.
[l] Hasić and Dedić, 92.
[li] Belloni, The Rise and Fall of Peacebuilding in the Balkans, 60.
[lii] Hasić and Dedić, 94.
[liii] Mangafic and Veselinovic, 2689.
[liv] Alina Mungiu-Pippidi, The Quest for Good Governance : How Societies Develop Control of Corruption (Cambridge: Cambridge University Press, 2015), 212.
[lv] Belloni, The Rise and Fall of Peacebuilding in the Balkans, 69-70.
[lvi] Mungiu-Pippidi, 208.
[lvii] “FACT SHEET: Assistance to Citizens in the Fight Against Corruption in Bosnia and Herzegovina,” USAID.
[lviii] UNODC, 37.
[lix] Heywood, 47.
[lx] Karklins, 25.