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Prepared under Task Order #DFD‑I‑01‑04‑00229‑00 under the Democracy and
Governance Analytical Services Indefinite Quantity Contract,
#DFD-I-00-04-00229-00

**Submitted to:**

USAID/Bosnia-Herzegovina

**Contractor:**

Democracy International, Inc.

4802 Montgomery Lane, Suite 200

Bethesda, MD 20814

Tel: 301-961-1660

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BOSNIA-HERZEGOVINA DEMOCRACY AND GOVERNANCE ASSESSMENT

MAY 2007

###### DISCLAIMER {#disclaimer .unnumbered}

The authors' views expressed in this publication do not necessarily
reflect the views of the United States Agency for International
Development or the United States Government.

**TABLE OF CONTENTS**

[EXECUTIVE SUMMARY i](#executive-summary)

[1. ASSESSMENT OBJECTIVES 1](#assessment-objectives-1)

[2. POLITICAL BACKGROUND 2](#political-background-1)

[2.1. STATUS OF DEMOCRACY 5](#status-of-democracy-1)

[2.1.1. Consensus 5](#consensus)

[2.1.2. Inclusion 6](#inclusion)

[2.1.3. Competition 7](#competition)

[2.1.4. Rule of Law 7](#rule-of-law-1)

[2.1.5. Governance 8](#governance)

[3. PRINCIPAL DEMOCRACY AND GOVERNANCE CHALLENGES
10](#principal-democracy-and-governance-challenges-1)

[3.1. State Parliament 10](#state-parliament-1)

[3.2. Rule of Law 11](#rule-of-law-2)

[3.3. Local Government 13](#local-government-1)

[3.4. Political Parties 14](#political-parties-1)

[3.5. Civil Society 15](#civil-society-1)

[3.6. Media 16](#media-1)

[4. UNIFYING STATE INSTITUTIONS IN A REFORMED CONSTITUTIONAL STRUCTURE
20](#unifying-state-institutions-in-a-reformed-constitutional-structure-1)

[5. PROGRAM RECOMMENDATIONS 21](#program-recommendations)

[5.1. Governance Programs 22](#governance-programs)

[5.2. Rule of Law Support Programs 24](#rule-of-law-support-programs)

[5.3. Civil Society Support Programs
25](#civil-society-support-programs)

[5.4. Parliament and Political Party Support Programs
26](#parliament-and-political-party-support-programs)

[6. CONCLUSION 28](#conclusion)

[APPENDIX A: SECTOR POLICY BRIEFS A1](#appendix-a-sector-policy-briefs)

[APPENDIX B: MEETINGS B1](#appendix-b-meetings)

##   {#section .unnumbered}

##  {#section-1 .unnumbered}

# EXECUTIVE SUMMARY {#executive-summary .unnumbered}

## Assessment Objectives {#assessment-objectives .unnumbered}

This assessment of the status of democracy and governance (DG) in Bosnia
and Herzegovina is intended to inform USAID's development of a new
long-term strategy for supporting democratic development and good
governance in the country. With many existing DG activities about to
conclude, the assessment is especially timely for setting priorities for
new DG program interventions over the next three to five years. The
assessment follows the USAID-recommended framework for strategy
development methodology, which calls for a four-step analytical process
followed by recommendations for programming priorities.

## Political Background {#political-background .unnumbered}

A good understanding of the political background of a country is
fundamental to a sound DG assessment. In the case of Bosnia, the best
current starting point is the 1992-95 war that grew out of the collapse
of the Yugoslav state and the Dayton Peace Accords that brought the
fighting to an end in 1995. Dayton did not create a new country or
change state boundaries, but it profoundly changed the internal
structures and political dynamics of the independent Bosnian state.

Unfortunately, years later it appears that this government structure
prevents the Bosnian state from performing many of its sovereign
responsibilities efficiently, if at all. In the last 18 months or so,
Bosnia has begun an open, realistic "beyond Dayton" discussion centered
around constitutional reforms. However, it appears that no broad
consensus about national identity or state structures underpins this
public debate about the future of the country.

The political triangle comprising the national government and the two
entity components of Bosnia has coexisted uneasily but in relatively
stable fashion since Dayton. This stasis also has led to a kind of
locked-in status quo political balance due to constitutional, statutory
and electoral structures and political dynamics. This equilibrium
symmetry is now breaking down, mainly due to rapid political and
economic changes occurring in the Republika Srpska. There, a
consolidation of political authority around the governing administration
and market-oriented economic reforms are yielding economic growth,
greater political stability and a clearer sense of direction. The same
changes are not taking place in the Federation. The emerging asymmetry
presents very serious risks to, but also new opportunities for,
democratic development and political change in Bosnia.

## Status of Democracy {#status-of-democracy .unnumbered}

In order to identify principal DG issues, the report analyzes five key
elements of democracy: consensus, inclusion, competition, rule of law
and governance. The lack of a consensus or common vision about the basic
nature of the Bosnian state stands out sharply as the country's
fundamental issue. Dayton did not solve this problem, nor have the 12
years since. There is simply still no agreed-upon "Bosnia." The
country's citizens do not share a strong sense of common national
identity, and allegiance to the state is weak.

The polity is fairly inclusive but only within the parameters of
ethnicity and settlement patterns brought on by the war. Political
debate and competition is vigorous, with parties very active and
elections meeting international standards. Rule of law is still weak,
but in a broad sense the country is governed by law rather than by
arbitrary state action. However, the basic legal institutional framework
reflected in the Dayton structures does not work well and is an
important part of the fundamental governance problem---dysfunctional
government. The bright spot in governance is at the local level, where
progress is being made.

## Principal Democracy and Governance Challenges  {#principal-democracy-and-governance-challenges .unnumbered}

### State Parliament {#state-parliament .unnumbered}

The lack of unifying state institutions is a dominant issue when looking
at how to improve performance and strengthen legitimacy at the state
level. State Parliament should play a stronger role in representing all
citizens' interests in a directly accountable way. Its structure and
limited authority make this national responsibility difficult to carry
out. USAID should consider legislative strengthening at the state level,
with certain focused activities with the two entity parliaments for
pragmatic reasons.

### Rule of Law {#rule-of-law .unnumbered}

Building respect for the rule of law is closely related to the
state-building process and should be considered an important element in
addressing DG issues. The administration of justice is inefficient and
does not enjoy public confidence, but many of the system's deficiencies
are amenable to modernization interventions. Rights protection,
especially for minorities, will depend on the rule of law. USAID's
involvement, which emphasizes state-level institution-building and
public service delivery improvements in the courts, has the correct
strategic focus. It should be continued.

### Local Government {#local-government .unnumbered}

The local government system is improving and donor programming,
particularly USAID's, is achieving visible results in improving
governance at the level closest to the citizens. With a recommended
strategic focus on national-level issues local government programming
has a lower priority, but it is making an important contribution to
improved governance where it is most visible to the people. The planned
new GAP II project should be designed in a way that its activities
directly support national state-building objectives as well.

### Political Parties  {#political-parties .unnumbered}

Currently, political parties and leading politicians appear to be more a
part of the problem than a part of the solution to Bosnia's governance
problems. Nonetheless, they will be in the forefront of any "beyond
Dayton" discussions and they will have to act as midwife for any new
consensus about the future of the Bosnian state. They are not
demonstrating that kind of political will now. USAID should work with
political parties, but only at the national level in connection with
state-building issues, especially constitutional reform and the role of
State Parliament and its legislators.

### Civil Society {#civil-society .unnumbered}

USAID has provided important institutional development support to civil
society with considerable success. It is time for a new focus of
engagement with civil society, one that contributes directly to the
overriding DG strategic goal of helping Bosnia to build consensus around
new constitutional structures and government institutions to support a
modern, functional European nation state. Building public support for
unifying state institutions and constitutional reforms, that is "demand
side" civil society programming, can be the critical new element of
USAID DG programming that strategically links the other
institution-building work such as rule of law and local government to
the core objective of helping to build a new consensus about the future
of the Bosnian people and the state.

### Media {#media .unnumbered}

Media programming, to the extent continued, should be folded into the
civic engagement efforts in order to improve the communications
capabilities of NGOs and other civic groups in their broad-based
advocacy work.

### "Unifying State Institutions in a Reformed Constitutional Structure" {#unifying-state-institutions-in-a-reformed-constitutional-structure .unnumbered}

The recommended objective of USAID's Bosnia DG program could be
concisely stated as "Unifying State Institutions in a Reformed
Constitutional Structure." Having stronger, better performing state
institutions that help to unify the nation at the state level, and a
reformed constitutional structure that makes this feasible, should be
the "big picture" objective for USAID. Demonstrable results in the
administration of justice, local government and civic activism can show
progress toward this ambitious overall strategic objective.

This strategy is designed to help create consensus for democratic
state-building in a post-conflict society. USAID DG programming also
will support a broad range of other USG activities and foreign policy
interests in Bosnia.

What might Bosnian democracy look like in four to five years if this DG
programming is successful? Other major variables will influence the
course of events, but USAID should hope to see a sharply improved court
system and better local government performance. Most important, Bosnia
will have in place a reformed constitution approved by a vote of the
State Parliament and the Bosnian people. Strong civic activism will have
had a direct influence on political leaders and the highest-level
political decision-making in this process. Bosnia and Herzegovina will
be a fully sovereign state, will be a member state of NATO, and will
have achieved candidate status for accession to the EU.

# ASSESSMENT OBJECTIVES 

USAID decided to conduct a democracy and governance assessment in Bosnia
and Herzegovina (BiH) at this time to inform the development of a new
long-term strategy for encouraging democracy, good governance and the
rule of law. Within the next year, the USAID Mission in Sarajevo will
design new democracy and governance (DG) activities, to run for the next
three to five years. Some parts of the existing program portfolio have
been or are likely to be phased out, in some cases because those
projects have come to a natural end. The Mission seeks expert analysis
to help set long-term priorities for DG programming and provide
recommendations for whether it should make interim adjustments in
current programming in light of the priorities suggested by the
assessment report.

Democracy International (DI) fielded a team to conduct this assessment
under the firm's Indefinite Quantity Contract with USAID for Democracy
and Governance Analytical Services. The team consisted of Glenn Cowan,
principal of Democracy International, as team leader; Charles Costello,
former USAID Deputy Assistant Administrator, Director of the Office of
Democracy and Governance, and Mission Director in three countries;
Brenda Pearson, an experienced Balkan expert who has worked extensively
in Bosnia; and Reuf Bajrovic, an independent Bosnian analyst. The team
gathered information for the assessment from interviews conducted during
a three-week stay in Bosnia from mid-January to early February 2007,
from documents provided by USAID and implementing partners, and from a
recent literature review. Over the course of the field work, the team
conducted more than 60 interviews in Sarajevo, Mostar, Brcko and Banja
Luka.

The team has conducted this assessment in accordance with the
methodology and framework of the USAID Office of Democracy and
Governance, as laid out in *Conducting a DG Assessment: A Framework for
Strategy Development*. This framework prescribes a four-step process and
a recommended set of questions and analytical issues. The steps are:

1.  Analysis of the status of democracy and governance in the country
    using five analytical "lenses" (consensus, inclusion, competition,
    rule of law and governance) for the purpose of identifying the
    principal DG challenge(s) facing the country;

2.  Consideration of the country's political actors, interests,
    resources and strategies, leading to an understanding of how the
    political game is played;

3.  Analysis of the institutional arenas in which political actors
    operate for the purpose of understanding their relevance to the
    principal DG problem and identifying opportunities for democratic
    advancement and constraints to change;

4.  Consideration of the interests and resources of donors, including
    USAID, and other strategic considerations important to USAID,
    leading to identification of recommended areas for DG programs.

The framework is designed to lead to a document and discussion that lay
out problems and possible solutions, suggest priorities and provide a
basis for subsequent program choices and more specific program design.
Following the assessment, it is expected that the USAID Mission will
carry out the detailed sector analysis and consultation with prospective
partners needed to select specific program activities and design program
interventions.

# POLITICAL BACKGROUND

The Dayton Peace Accord did not create a new country, but it changed
profoundly the internal structure of a pre-existing state, which today
casts doubt on what constitutes the basic definition of the Bosnian
state. The current structure bears little relationship to that which
existed before the war. Unfortunately, it is becoming increasingly clear
that this government structure, in and of itself, prevents the state
from performing many of its sovereign duties efficiently, if at all.
There are a host of problems beyond that of state structure, but even
were these other difficulties moderated, the artificiality of the state
structure would still be debilitating. As the Venice Commission noted,
the state structure

> is neither rational, nor efficient . . . power is scattered on too
> many levels and is usually exercised by political or administrative
> units that are too small to function efficiently . . . A state the
> size of Bosnia-Herzegovina cannot afford constitutional arrangements
> that are too complicated as a result of which more than 50 percent of
> the GDP is spent on financing the bureaucracy.[^1]

In the last 18 months, Bosnia has begun a realistic "beyond Dayton"
discussion. If this political conversation is to result in a viable
state, it can only be based on stronger institutions at the state level.
The state institutions must demonstrate to Bosnians of all ethnicities
that it is in their best interests to be part of a single state. No such
broad consensus about national identity and state structures currently
exists. Only if the politicians and elected leaders change the political
dynamics will people begin to believe in a common future, but this
assumes political will on their part, which is not the case with most
political leaders in BiH. Pressure for change will also need to manifest
itself from other quarters, such as public opinion, civic activism,
interest groups, regional developments and the international community.

Self-sustaining state-level institutions need to be encouraged, or there
is a real risk that the limited gains in state-building made in the past
12 years will evaporate, with unpredictable and perhaps dangerous
consequences. This lack of unifying state institutions is a dominant
theme in the current discussion of how to encourage democratic
development and good governance.

The recent history of Bosnia is well known to USAID and does not need
retelling in this document. How this past is reflected in current
politics, however, is germane. In the years after Dayton, an equilibrium
developed among the Republika Srpska (RS) entity, the Federation entity
and the state level or national government of BiH. To a degree, a
similar relationship existed among the three main ethnic populations. No
single structure or group was predominant; the economy was managed
reasonably well (although economic performance remains unsatisfactory);
political freedoms and the rule of law were expanded; and socio-economic
indicators improved slightly, though they remain below pre-war levels.
The uncertain peace resulting from Dayton has held. The operating
principle among donors was, in effect, one of mutually assured and
incremental improvements at the entity level and among constituent
peoples. Assistance was provided to both entities of BiH and to the
state to help them improve in their respective spheres but with the
unstated goal of maintaining a certain symmetry based on political
realities on the ground, so that no power center became too strong or
advanced at the expense of the others. Built-in structures providing for
minority veto power reinforced this situation.

This managed stalemate has been broken in the past year or so. The
political situation in Bosnia at the beginning of the assessment was
redefined by several factors: a) the failure of the constitutional
changes in the Bosnian State Parliament in April 2006; b) a national
election campaign designed to accentuate and inflame ethnic differences
(due to the fact that the constitutional reform debate before the
elections placed this issue at the center); c) the voiced (and likely
real) lack of concern with the European integration process; and d)
since the elections and for the first time since the war, the RS is in
an advantageous position in relation to the Federation, with the
likelihood that the economic and other reforms taking place in the RS
will ensure a long-term asymmetry between them.

In April 2006, Party for BiH (SBiH) parliamentarians, led by Haris
Silajdzic, along with some members of the Croatian Democratic Union
(HDZ), one representative from SDA and one independent MP, voted against
the constitutional amendment package.[^2] Silajdzic used the issue of
constitutional change as an opportunity to return to political life and
jumpstart his pre-election campaign.[^3] Silajdzic called for defeat of
the amendments on the grounds that they were not substantial and made
the RS too strong as a separate entity. His counterproposal was premised
on a new constitution based on European standards and, more importantly,
one that would abolish the entities.

The election campaign was centered on the failed constitutional reform
and the promise (or threat) by Milorad Dodik, Prime Minister of the RS,
that he would "call for a referendum on independence of the RS if the
threats to the RS continue." This clear provocation by Dodik in response
created much disquiet, especially in the Federation, and focused the
election campaign once again on basic ethnic and personal security
issues rather than the socio-economic problems of the country. Analysts
tried to calm the situation by pointing out that there was no legal
basis for the RS to hold a referendum on independence. These arguments
mattered little in the face of Silajdzic's retort that "had the
constitutional reforms been adopted in the BiH Parliament, the RS would
have been emboldened and would have been given an opportunity to call
for a referendum."

During this protracted and obviously divisive debate, the Office of the
High Representative (OHR) was mute. Many Bosnians interpreted this as
proof of the inability or unwillingness of the OHR to address this
perceived deepening crisis, and voters reverted to fear of the past and
old habits of selecting parties that presented themselves as the
defenders of "vital national interests."

EU integration had for some years acted as a strong impetus to a
continued acquiescence to Dayton's constitutional strictures. The
prospect of joining the EU, even if at some distant date, had provided a
modicum of glue to a sometimes tenuous country vision. Central to EU
goals, police reform with creation of a unified state police structure
and reforms in the public broadcasting system were expected at the end
of 2005. The Serb Democratic Party (SDS), faced with the political risk
of supporting this controversial decision, determined not to bear the
political cost of perceived compromise and instead allowed the Party of
Independent Social Democrats (SNSD) to take over the RS entity
government eight months before the general elections. It has not gone
unnoticed that Milorad Dodik thus far has skillfully managed to avoid
transferring police competencies to the state level and has clearly
stated that any reform that threatens the existence of RS entity powers
will not be acceptable. This stance presents a serious challenge to the
power and influence of the international community in Bosnia, and it has
a potentially devastating effect on the EU integration process, which
had been one of the few goals shared among the three ethnic groups.

While the SNSD leadership clearly placed RS entity interests above those
of Bosnia in general, they also, in a very short period, pushed through
a series of reforms that have advanced the economic and governance
position of the RS and made palpable the shortcomings of the Federation.
For the first time since Dayton, the compact based on an assumed
symmetry of development has been broken. SNSD was able to quickly form a
government and in the first 60 days of governing attracted several
billion KM of foreign capital. RS Telecom has been sold to Serbia
Telecom for some 650 million Euros. The Czech state power supply company
has entered an agreement with the RS entity government to invest 1.5
billion Euros in construction of a new thermal power plant. Investment
in a tourist resort in the south of Bosnia, in the proximity of
Dubrovnik, Croatia, will amount to over half a billion Euro. Alone,
these three projects account for more than 2.5 billion Euro of direct
foreign investment, which is more than the total amount invested in
Bosnia in the last ten years. Besides these foreign direct investments,
the RS entity government has signed an agreement with *Strabag*, an
Austrian private firm, on development of a modern highway system in the
RS. According to this agreement, the Austrians will build over 300 km of
highways in the RS through a joint financing agreement of more than 2
billion Euros.

Such a sudden surge in direct foreign investment in Bosnia can be
attributed to perceived stability of the SNSD-led government in the RS.
Security of foreign investment is an issue that Dodik has continuously
brought to public attention as the top priority of his government.
Besides the increase in foreign investment, the RS entity government
has, for the first time, allocated a serious percentage of its own
budget for investment in infrastructure and other capital improvements.
Sarajevo Canton and Brcko District still have the highest per capita
investment ratios in the country, but the RS entity government has
devised new and innovative ways to increase public-sector investment.
For example, there will be a new development fund for the east part of
Bosnia, which will receive about 100 million Euros in the next year
alone. The funds have been directly transferred from the privatization
of RS Telecom to this new body, which will allocate money to
municipalities based on projects proposed to the government.

The long-term impact of the RS entity government's recent flurry of deal
making with foreign state-owned companies remains to be seen, but the
separate path being followed in the RS highlights the dilemma of Bosnian
state-building. The more any one entity government makes strategic
economic investment decisions on its own, the harder it becomes to
approach the development of the country as a whole. Unfortunately, this
is another example of the lack of political will that has to be taken
into consideration when formulating strategies for strengthening
Bosnia-Herzegovina as a viable state seeking rapprochement with Europe.

Nonetheless, this frenzy of economic activity in the RS leaves both the
Federation and the central Bosnian state looking ineffective and even
apathetic. The Federation particularly is revealed as a weak "partner"
when compared with the new vitality of the RS. The old habits of the
Croatian and Bosniac parties of dividing Federation government
ministries by ethnicity and then ignoring their ineffectiveness due to
ethnic sensitivity will become even more apparent and galling to the
voters. Although inter-ethnic coalitions of Croat-Bosniac national
parties in Bosnia seemingly reflect agreement and cooperation, in fact
mutual communication and common policy planning on the level of the
Federation government is close to nonexistent. This is especially
evident in regards to policy implementation at the level of cantons and
municipalities.

These and other dysfunctions in the Federation prevent its government
from even attempting seriously to follow the RS's example. The current
political response from the Federation government has been to criticize
the RS government's leadership rather than to make any effort at
internal reform. This allows RS government leaders to appear decisive
while Federation politicians produce nothing but rhetoric, and
unfortunately appear to be entirely unconcerned with governing to
achieve results.

One important unanswered question at the beginning of this assessment
was whether political leaders in the RS would agree to a more
constructive role for the whole of Bosnia. The new vitality in the RS
has in many ways been positive for the country, as it seems to have
contributed to some impetus for change and economic growth in the rest
of the country. However, the negative effect of the ethno-nationalist
rhetoric on the social fabric in Bosnia could be dangerous and has to be
taken into account. **The risks and opportunities presented by this
developing structural asymmetry are the most critical issues to be
understood in formulating USAID's new DG strategy to underpin upcoming
programs.**

## STATUS OF DEMOCRACY 

The DG Assessment Framework calls for analysis of five key elements of
democracy: consensus, inclusion, competition, rule of law and good
governance. After considering the political situation, it is clear to us
that a lack of **consensus** is the most serious obstacle to continued
democratic development in Bosnia. **Governance** has been improved in
the past decade, but competent service delivery and the need to build a
solid social compact still require that considerable attention be given
to public administration. The **rule of law** has improved substantially
in recent years but the country cannot yet guarantee equal protection
and due process to all citizens regardless of where in Bosnia they may
find themselves. **Competition** and **inclusion**, albeit somewhat
constrained, were not currently priority concerns.

### Consensus

**There is no consensus or common vision of what constitutes the Bosnian
state.** Moreover, there is no agreement on how to move toward such a
consensus or even on what the acceptable alternatives might look like.
There is simply still no agreed-upon "Bosnia," and without such an
agreement Bosnia will never be a stable, democratic, multiethnic
country. Dayton did not settle that issue; it only bought time to try to
consider the issue in peace. The accords may be considered "successful"
in delivering more than a decade of peace, but that same period of time
clearly demonstrates that the Dayton arrangements have not proven
successful in creating structures or an agreed road map leading
inexorably to a permanent, consensual resolution of the most basic
issues of statehood and national identity.

From our reading, meetings, conversations and observations, we have
concluded that people living in the lands now called Bosnia think of
themselves more as Bosniacs, Croats, Serbs, Christians or Muslims, or
perhaps as residents of an entity, canton or municipality, than as
common citizens of the Bosnia-Herzegovinian state. The central state is
so weak and has such little relevance to daily life that for many it has
ceased to exist, and there is no agreement on what a different state
would look like. Leaders of the Federation (and one presumes their
followers) voice objection to a Bosnia with a permanent RS entity. Many
RS residents say they will not abide a Bosnia without an RS entity.
Croats are unsettled by any construct that leaves them without a
majority over some governmental unit -- even one as dysfunctional as a
canton. Immovable object meets irresistible force, acted on by
obstructionist elements.

Bosniac leaders have shown little interest in the success of an entity
they view as transitory at best. Their future vision is of a Bosnia
without the Federation entity or the RS entity, so from their
perspective there is little point in strengthening the Federation. By
not caring if the Federation as a governmental unit succeeds, they make
its failure predictable.

The Croat vision for Bosnia is less clear but certainly would include
measures to protect and perpetuate ethnic divides and their
disproportionate power. The Croats do not seem to care that the cantonal
system is dysfunctional so long as they have control of several of their
own.

The leaders of the RS and probably most Serbs do not see their interests
adequately protected in a Bosnia without an RS entity. They are widely
viewed by Croats and Bosniacs as intending eventually to divide the
country permanently through partition. Even the hoped-for balm of
European integration does not seem to be having the calming effect that
was once expected.

### Inclusion

Bosnia's constitution enshrines the "vital national interests" of the
constituent peoples and in doing so guarantees both political inclusion
and exclusion by ethnicity. Bosnia's broader civil and political life is
similarly fractured. Everyone can vote but not for some candidates or
some offices. Citizens are guaranteed the right to live anywhere, but
custom, recent history and fear dictate mostly ethnically based
settlement patterns. Inter-ethnic marriages, once common, now are rare.
Different and required alphabets guarantee inclusion for some, exclusion
for others. Agreed upon positions and proportions of public-sector jobs
are dictated by ethnicity, resulting in affirmative action for all with
equal protection for none. Bosnians filter public discourse by
ethnicity, including as valid their group's views, excluding as invalid
the views of other groups. The public square is available to all -- one
opinion, one voice and one group at a time. People who long for open and
candid discourse feel frustrated and marginalized.

Despite this apparently bleak picture, in everyday life the society is
inclusive, even if this is often true only within ethnic bounds.
Regardless of ethnicity and residence, citizens can generally rely on
some due process and equal protection enforced by a reasonably
independent judiciary. Voting is frequent and elections are freely
contested even if turnout could be better. The press is free and
vibrant, albeit frequently irresponsible. Media ties to special
interests are well known and the consequent exclusion of certain views
is to be expected. Petty corruption, particularly in education, occurs
without regard to ethnicity.

Organized civil society increasingly provides a vital inclusive arena in
this fractured society. Although too dependent on foreign donors, NGOs
and less structured organizations are active and appropriately
disorganized, duplicative, inefficient and messy -- all for the better.
NGOs active in politics do not appear constrained even if their goals
and objectives are transparently partisan. Economic life, although
diminished by the continuing dysfunctions of corruption, does not
obviously suffer from ethnic exclusions. Unlike in the public sector,
private-sector employment and promotion are mostly merit-based.

### Competition 

Constrained by the bounds of inclusiveness discussed above, much of
Bosnian public life is competitive. Elections are frequent and hard
fought. Political parties are free to organize, recruit members,
nominate candidates and campaign. Elections are administered fairly and
competently, votes are counted as cast, and those elected take office
and serve under the law. The Dayton system has certain functional
oddities but nevertheless provides for significant checks and balances.

There is also a vigorous competition of ideas, in the media and
elsewhere. Freedom of speech, expression and the press seem well
established. The media sector is loud and fractious, if sometimes less
than professional. A large number of civil society organizations, albeit
generally sustained by foreign donors, compete for public attention and
influence and provide one check on corruption and abusive government
power.

Other institutions exist, inside and outside the government, to provide
checks and balances on governmental power, although in practice many of
these institutions are ineffective. There is a market economy and
economic competition is very real, although the private sector remains
limited and government policies and procedures still limit more open
competition.

### Rule of Law 

The rule of law as a general concept does not represent a fundamental
problem in the context of identifying the core issues that affect
democracy in Bosnia. In this broad sense, the country is governed by
law, and the law is generally respected and followed. Neither the
country nor the government can be considered lawless or operating mainly
through the arbitrary exercise of power.

When analyzed in the context of what we see as a clear lack of consensus
on the fundamental nature and organization of the state, however, the
constitutional and legal structures that underpin formal governance in
the country legalize and contribute to the gridlocked, dysfunctional
political system that characterizes Bosnian democracy. In that sense,
the legal system, particularly as reflected in the powers and
authorities of the various levels of government and the jurisdiction of
the courts, does become a part of the fundamental governance problem.
Only programs that address constitutional reforms and a better
definition of the permanent nature of the state can bring basic rule of
law considerations into alignment with governance choices that will
support a functional, modern state. Of course, those choices themselves
have substantive legal content as manifested in constitutions and
statutes, so they also need to be informed by good legal analysis and
draftsmanship at every step.

As with much else in Bosnia, the Dayton institutions, while perhaps
immediately functional, provide a poor framework on which to build a
permanent rule of law structure. Four disparate legal systems, each
affecting in whole or in part Bosnia (at the state level), the two
entities and the Brcko District, make it difficult to rationalize the
justice sector. Lack of any overriding judicial authority makes disputes
that arise from conflicting interpretations or procedures between
jurisdictions problematic. A State-level Supreme Court with
discretionary appellate jurisdiction, for example, would be desirable,
but its utility would be questionable unless the legal authorities of
the central government were expanded and the question of finality of
entity Supreme Court judgments resolved. In other words, agreement on
substantial constitutional changes is a pre-condition to any worthwhile
decision to create a national Supreme Court. (A state court and a
constitutional court at the state level already exist, but with limited
attributes and jurisdiction.)

Within the current system, citizens do not expect to receive anything
approaching a timely and impartial adjudication of their cases. The
courts are burdened by a plethora of minor civil cases, mostly stemming
from pro forma non-payment suits brought by various public/private
utilities against their own customers. Case backlog in general
represents a serious deficiency in the administration of justice. Even
when not so constrained, the system overall badly needs modernization
and does not yet enjoy the full confidence of the public. Further,
citizens express concern about their rights should they be traveling in
or choose to move to an area where they would be a minority. Equal
protection and due process are present to some extent, but are not
guaranteed.

### Governance 

The essential problem of governance in Bosnia is the Dayton
constitution, which vests all power not expressly granted to the
national government to the entities and then grants next to no authority
to the Bosnian state government. Put differently, the essential
governance problem is the ethnically driven set of values and perceived
"national" (read ethno-religious) interests that underlie the Dayton
constitution and obstruct the consolidation of a single nation-state.
Aside from international relations, military matters, trade, customs,
monetary policy, limited financial management and cross border
transportation, there is no real national government. To the extent
governance affects daily life, Bosnia has two separate and distinct
systems, one functioning, the other not.

The Federation is divided into 10 cantons, each of which functions
essentially independently, exercising nearly the entire powers one
ascribes to a state in the U.S. or Mexico, a Laender in Germany or an
Oblast in Ukraine or Russia. The cantons are further divided into 81
municipalities. The cantonal system is a failure whose only "redeeming"
feature is to provide one or another ethnic group control over a
subnational governmental unit. This comes at the price of bloated
payrolls, increased costs, ineffective service delivery, corruption and
all manner of other dysfunctions, particularly in the health and
education systems. The municipal governments are left with varying
competences, uncertain funding and a sometimes fractious politics
undercut by ethnic distortions and the unfortunate imposition of
partisan local government. Municipalities cannot rely on the cantons to
perform their functions and do not have the resources to provide
services themselves.

The RS, unfettered by the cantonal system, has improved local service
delivery in the past year or so but remains hampered by its Communist
past, replete with inefficient Communal Services organizations in their
new private guise. These now "private," albeit municipally or RS
government-owned, companies provide most of the essential municipal
services (such as water, electricity, lighting, heat, refuse disposal).
They remain both inefficient and ineffective and need to be either fully
privatized and responsive to customers and owners or brought back under
direct government management, accountable to elected officials and
ultimately the voters.

The Federation government is failing while the RS government has begun
to reform many of its institutions and liberalize its economy. The old
system of parity between the entities (albeit at a low level of
development) no longer exists, and this gap continues to grow.
Federation entity politicians and government leaders are not interested
in solidifying an entity they view as temporary, while the leadership of
the RS entity is moving to solidify what it views as a permanent entity.
The disparity of service delivery will become more evident in the coming
years and will act to further separate the entities.

The bright spot in governance is at the local level, where progress is
being made in both entities. Many donors, USAID included, are giving
greater attention to local government development. While this may be
considered a positive for strengthening democratic self-government at
the local level, the strategy issue raised for assessment purposes is
whether local-level governments or local civil society will play a
significant role in the near term on the national issue identified as
most critical -- lack of consensus on national identity and the basic
nature of the state.

# PRINCIPAL DEMOCRACY AND GOVERNANCE CHALLENGES 

The Mission has provided background "scene setters" in each of the areas
of DG, and rather than re-cast each we have included them as Appendix A
to this document. The comments that follow build on these thoughts and
represent the team's views in these areas, particularly related to
programming recommendations.

## State Parliament

The lack of unifying state institutions is becoming a dominant issue in
discussions of how to encourage democratic development and good
governance. Given the possibility of expanded powers, the State
Parliament may be the only state institution capable of making
significant progress to improve people's lives, but not unless it
becomes a responsive political institution. To date, state
parliamentarians have not had to act as popularly elected politicians.
This body lacks nearly all the mechanisms, democratic deliberative
processes and skills necessary to propose and debate policy and
legislation. State Parliament also lacks authority in areas that
actually affect people's lives in BiH. High turnover rates only worsen
this situation.

Given the closeness of the April 2006 vote that rejected the adoption of
constitutional amendments, there is hope for near-term passage of some
package of reforms. If these reforms are adopted, it is imperative that
state parliamentarians be given the professional training needed to
discuss the most pressing issues confronting the country. Parliament
will need to develop strong political caucuses that cross ethnic lines
in order to debate the urgent policy reforms of the constitution, police
and judiciary. Elected parliamentarians and their staff members need
continued training and assistance in the drafting of legislation. The
committee structures are fragile and will need to be strengthened,
especially since the state has gained new competencies in the areas of
taxation, defense and intelligence, which will require more vigorous
engagement by parliament. Parliamentary committees will need to be
developed in order to oversee the executive branch effectively.

Soon, the parliament and government will need to develop their own
capacity to conduct research and analysis. International advisors
drafted much of the existing legislation, and contentious legislation
was implemented by international decree. It will be important for civil
society and think tanks to raise the bar of policy debates through their
active participation in parliamentary affairs. As the international
community, mainly through the OHR, begins to reduce its imprint, the
government and parliament will need to solicit public support for
legislative initiatives and implementation.

Public opinion polling indicates that citizens have a high degree of
cynicism and low degree of trust in their state institutions, including
parliament, while at the same time they expect the government to solve
problems. There is a tendency for the public to view state institutions
as more corrupt and incompetent as they take on more competencies. There
is precious little time before the public utterly loses confidence in
the State Parliament's ability to do its job. Direct assistance to
bolster it may yet reverse this course.

## Rule of Law

As stated earlier, building respect for the rule of law in Bosnia is
closely related to the state-building process and should be considered a
crucial element in addressing DG issues. However, we do not see the
absence or deficiencies of the rule of law as fundamentally inhibiting
democratic development in the country. At the very least, unchecked
executive authority does not dominate the entire political system, as is
the case with respect to rule of law in so many other countries. The
constitutions and legal framework generally meet human rights standards,
although the ethnic definitions of citizenship are problematic and even
discriminatory against minorities. Whether the legal framework of the
government at all levels makes for a functional, modern state meeting
European standards is a different question, one that we treat in the
context of governance and constitutional reform.

But rule of law in general cannot be considered a strong attribute of
the Bosnian system, even if it is not considered a fundamental or core
problem blocking democratic development. This is so because the legal
system and the courts do not do a good job of "delivering the goods" in
a governance sense. The administration of justice needs to have a strong
public services delivery element.

Many of the problems with the administration of justice should be
amenable to modernization interventions, and USAID is heavily involved
in that effort. Court facilities and infrastructure are substandard.
Information technology systems for filing, recordkeeping and case
management need further upgrading. Budget levels are insufficient to
bring the courts up to an efficient operating level that meets European
standards. As a result, the courts suffer from excessive case backlogs,
drawn-out procedures and long delays in reaching final judgments. These
shortcomings cause a loss of public confidence in the justice system,
thereby undermining respect for the larger principle of rule of law and
weakening the foundations of democracy.

Since the end of the war in 1995, in fact, significant advances in many
areas of the law have been achieved, albeit often with the heavy-handed
involvement or even imposition of the international community through
the Office of the High Representative. A new criminal code and code of
criminal procedure based on the adversarial system are now in operation,
with major assistance from the U.S. government.

The state-level High Judicial and Prosecutorial Council (HJPC),
established in 2004, has independent authority to appoint all judges and
prosecutors nationwide. This authority was used to make all sitting
judges reapply for their positions and be subjected to a thorough
vetting of their qualifications and judicial record. Some 30 percent of
judges were not reappointed. HJPC has disciplinary powers over judges
and prosecutors and has established both a code of ethics and, more
recently, performance standards to be used to evaluate judges' work
performance. HJPC is also working to improve system-wide budget
planning.

HJPC has received substantial assistance from donors, including USAID.
It is generally seen as a qualified institutional success, with good
results in strengthening judicial and prosecutorial independence from
undue political interference and establishing uniform, higher standards
for judges and prosecutors throughout the country. HJPC has been less
successful in achieving another of its stated objectives -- unified
state-level funding for the courts and judiciary. Funding for the
budgets for the courts come from the entities, and the courts themselves
are entity (or cantonal) institutions with the exception of a State
Court and State Constitutional Court with limited jurisdiction. In the
Federation there are 10 cantonal jurisdictions as well as ministries of
justice. For Bosnia overall, 14 different, ostensibly autonomous budgets
and administrative oversight units exist. This budgetary control has
sometimes been used to try to interfere with judicial or prosecutorial
independence.

Since 2006, however, HJPC has been able to establish objective criteria
and procedures for selection of judges and prosecutors nationwide, as
well as a uniform salary and benefits structure. Judges are well paid by
Bosnian standards, giving them greater financial security and the
ability to maintain their integrity against outside corrupting
influences. Also, a relatively good ethnic and gender balance has been
achieved in the judiciary.

All prosecutors and judges have been trained in the new criminal code
and code of criminal procedure, with assistance from OPDAT, in the two
entity-level regional Judicial and Prosecutorial Training Centers
(JPTCs). All judges are now subject to mandatory Continuing Judicial
Education at the JPTCs.

In spite of what are seen as these institutional successes, the
operational weaknesses of the court system remain serious. A huge case
backlog exists, due in large part to the dumping onto court dockets of
voluminous unpaid utility bill claims that do not belong there. Modern
case management systems are nonexistent, and the full use of
computer-based information technology is limited. Low pay for
non-judicial staff causes high turnover and also hampers court
administrative efficiency.

A serious problem exists with respect to enforcement of judgments, which
in the eyes of the users of the system is the ultimate standard of
functionality of the system. This is also the case with notices of
hearings, summonses and subpoena orders at earlier stages of
proceedings. Government itself often fails to comply with court orders,
which brings into serious question the applicable reality of the rule of
law. But Constitutional Court rulings in cases dealing with
controversial political issues are respected by governments at all
levels.

USAID is heavily invested in the administration of justice through its
five-year Justice Sector Development Project (JSDP). The project
provides support to HJPC at the core institutional level in management
and strategic planning; judicial standards, ethics, performance and
discipline; and finance and budgeting. With the courts themselves, JSDP
is helping to modernize court operations through a methodology using
Model Courts with a well-defined technical package of improvements. The
courts are receptive to these interventions, as they are seen as
practical, immediately useful and visible to the public. JSDP also
provides assistance to strengthen the capabilities of the State Ministry
of Justice, but that ministry remains weak and does not play its role
effectively.

In 2006 the Mission carried out a mid-term evaluation of JSDP that also
looked at sectoral issues. Although generally favorable, the evaluation
called for a greater USAID involvement and leadership in promoting a
much-needed participatory justice sector strategy document and
implementation action plan. Ultimately, the Mission decided to defer to
DFID on this issue, as DFID had already begun work on a sector strategy
with the MOJ. USAID decided to concentrate on the narrower issue of
judicial independence and expects to lead a stakeholders' working group
on that topic once the draft strategy document has been presented.
MOJ/DFID progress on the sector strategy exercise has been slow in the
past year, with limited true "local ownership," although DFID is
conscientiously supporting the MOJ effort to produce a draft document
internally for broader public review and comment later. Whether it will
build broad-based momentum for reform remains to be seen, and its slow
pace is worrisome.

The team concurs with the findings and recommendations of the 2006
evaluation, which remain current and therefore are not repeated in great
detail in this assessment report. They call for priority on legislation
to reduce case backlog sharply, accelerated roll-out of Model Court
practices, legislation to achieve unified state-level funding for the
court system and greater efforts to strengthen the weak MOJ to enable it
to play a lead role in the justice sector strategy exercise. USAID has
already acted on recommendations to eliminate legislative drafting
assistance at MOJ and commendable, but failed efforts to create legal
aid offices for criminal representation of indigents.

## Local Government

Local government as a governance arena is taking on greater
developmental and political significance in Bosnia, and directly elected
mayors are achieving greater prominence locally as political actors.
Demand and support for greater decentralization of competencies and
fiscal resources appears to be growing. This is evidenced by the
advocacy role of local governments in the passage of the revenue sharing
formulas contained in the state-level value added tax (VAT) law and in
the passage of local government legislation in both parts of BiH.

A serious local government strategy exercise has been carried out with
broad participation, and it includes action recommendations to deepen
the decentralization process. The RS entity has enacted a progressive
local government law, and the Federation entity has adopted a similar
statement of principles on local government, backed by the respective
municipal associations in both entities.

A national VAT was agreed upon and passed into law in 2006. The VAT not
only strengthens state finances, a desirable objective, but also
provides for assured revenue sharing with municipalities on a fixed
formula basis with objective, transparent, verifiable criteria. Funds
are transferred directly from the state treasury to the municipalities
without first going to the entities, as was previously the case. This
frees municipalities from capricious political decisions about amounts
to be transferred, which was a problem, particularly at the cantonal
level in the Federation entity.

The planned entry of many more donors into the local government arena
(we suspect in part due to their frustration with other levels of
government) raises the issue of donor overcrowding or over-resourcing
the sector. A plausible case can be made for USAID exiting the sector on
these grounds, especially given our concern that local government
programming may not have a direct and immediate enough impact on the
core issue of national consensus. Others argue that strong local
government institutions help to create more confidence and space for
serious discussion of the issues and alternatives for restructuring
political institutions and competencies at other higher levels.

In any case, it should be noted that USAID has a recognized donor
leadership role in local government programming based on the
accomplishments of its GAP project. USAID was able to leverage \$10
million in Swedish SIDA co-financing for GAP, doubling the level of
resources to put into the project, an uncommon donor partnering
achievement for USAID.

Practically speaking, as of the time of this assessment USAID had
already decided that it wants to continue its successful local
government development work (GAP II). The Dutch, in addition to the
Swedes, have offered to co-finance a new project, meaning that the
planned USAID commitment of \$10 million over five years will be
leveraged into a \$30 million total funding level for the project, a
very significant DG investment.

Therefore, taking the new project as a given, representing USAID's
largest direct investment in governance during the planning period of
this assessment, we do recommend that it be designed to better support
the Mission's revised DG priorities. This can be done by building in
more "upward linkages," that is, mechanisms whereby local governments
and civic organizations engage more directly on the critical issue of
national consensus and the local interests at play in achieving
consensus agreement at the national level.

In addition, activities in any new project should help to build
cross-entity cooperation (this is being done in the current project) and
not serve to harden entity level governments at the expense of the state
level or municipal governments themselves. The vision should be to see
local governments as part of a national whole, without prejudging the
future status of the entities or the structures, competencies and
institutions of the state on the basis of the current status quo.

The priority for national consensus building requires an openness to
change that should not in any way be undercut by otherwise valuable
support for improved local governance. Local government programming must
be consistent with the defined DG strategy at the national level and for
Bosnia as a whole.

## Political Parties

The continuous election cycles since the cessation of the war in 1995
have produced a distorted political experience more focused on
competition than governance. Political party assistance to date has
correctly concentrated on areas of campaign performance, but future
programming should be directed to the organizational and governance
aspects of party development at the state level.

We are particularly concerned about engagement with the political
parties at the local level. Local Mayors and Councils are elected on a
partisan basis and are likely to remain so. Nevertheless, local
government can find nonpartisan approaches to most if not all of the
challenges it faces. There need not be a partisan political focus to
providing government services. There should not be a Party A way to
repair a street as against a Party B way to repair a street. Such a
discussion should be centered simply on the best way to do the job. By
definition and intent, introducing political party development programs
into this venue cannot help but further politicize a society already
fractured rather than held together by politics. Introducing more
partisan local government would be a disservice.

At the other end of the spectrum, the State Parliament needs to become
more political. Its members should be encouraged to act as if
representing constituents directly. Party caucuses should encourage
policy debates and committees should hold field hearings to gather
constituent opinion. We would encourage full engagement in a politically
centered parliament program with the State Parliament but would reduce
or halt further work with the entity deliberative bodies. Working with
the Federation Parliament has not proven successful and is not likely to
be more fruitful in the coming years. Under current conditions,
strengthening the bodies in the RS may only increase the widening
governance gap between the two.

Public opinion polling, though it has been a significant contribution to
the development of Bosnian parties, is now widely available from Bosnian
and regional firms, and the parties have the resources to fund their own
research. There is no obvious need to continue to fund public opinion
research for them. In fact, the top three finishers in the October 2006
elections had their own pollsters. The skills transfer has been
completed, and we recommend no further USAID assistance in this area.

## Civil Society

Like much else in Bosnia, the organization of civil society is a
consequence of the Dayton Accord and the donor community's imperatives.
Dayton established the strong entity-based framework for advocacy,
policy debate and consequent governance. Donor requirements have
compelled much of civil society to organize as NGOs rather than adopt a
frequently more responsive informal organizational model.

There are more than 7000 NGOs registered in Bosnia but probably only 5
to 10 percent are active and viable. For more than a decade the main
partner for civil society has been the international donor community,
and NGOs continue to depend heavily on international donor funding,
which generally determines their activities.

Direct political advocacy by civil society needs to be more fully
developed. USAID should concentrate its civil society support on
building the advocacy capabilities and sustainability of a limited
number of key NGOs working in the area of governance. There is much room
for improvement and expansion of civil society in this role as political
advocate. To date there has been a plethora of organizational and
goal-setting exercises at the expense of membership development and
active policy engagement. USAID should encourage two or three
broad-based, statewide, membership-based NGOs to serve as an important
public voice with the main political institutions.

Lessons can be found in the Centers for Civic Initiatives (CCI) civic
movement called GROZD (Civic Organization for Democracy) in 2006. GROZD
gathered more than 400 different NGOs and collected half a million
signatures in the pre-election campaign. Using the strength of this
petition, GROZD challenged political candidates to accept a 12-point
civil platform developed by member consensus. The movement succeeded
tactically, but some view it as having failed in its main strategic aim.
We disagree, thinking GROZD accomplishments to be very significant, at
least organizationally. That they were unable to accomplish a
substantive political goal is hardly reason for condemnation. Further,
it is apparent that any supposed strategic failure depends entirely on
what it is the individual informant expected GROZD to accomplish. If a
participant wanted a political victory, GROZD is blamed for failing to
deliver votes. If someone else wanted the parties to adhere to the civil
platform and they did not, then GROZD is said to have failed.

GROZD was mostly successful, and there is much to be learned from the
experiment that could inform further advocacy support programs. This
was, after all, the country's largest ever NGO networking effort. Its
leaders cite a number of problems: (1) a poor strategy for approaching
parties; (2) internecine fighting; (3) a late start; (4) poor public
education outreach, and (5) unrealistic expectations. But these problems
all suggest important lessons. It would be unfortunate were USAID to
dismiss the exercise as a failure instead of learning from its tactical
success.

## Media 

USAID has played a vital role in media development since its initial
engagement in 1995. Many of the USAID programs and direct assistance are
laudable achievements in a politically complicated and occasionally
dangerous environment. American assistance has improved greatly the
quality of journalism and establishment of leading media outlets.
International assistance has a poor track record in media development in
Bosnia. The USAID programs by comparison, however, have demonstrated a
reasonably good return on investment. USAID has given itself too little
credit for its achievements.

As many journalists, publishers, and station owners stated, "the main
problems of a free media are behind us." Funding was made available in a
critical juncture during the war and immediately following. The overall
media framework is developed. Bosnia is in 19^th^ place on the Freedom
of Media List. Freedom of Expression and freedom of the media are
guaranteed by the Constitution, the European Convention on Human Rights
and several national laws including the Law on Protection for Defamation
and the Law on Communications. The freedom of the press largely
contributes to a thriving private media, which consistently scores
higher in public trust than the public broadcasting services.

### Current Trends

The media seems to be entering a consolidation phase that will decrease
the total number of unsustainable media outlets but may give rise to
powerful media fiefdoms, which has been the regional trend.
International investment in the media is unlikely before the
consolidation because there is too little advertising revenue. The media
is increasingly using market research to guide its programming and to
respond to demands from its domestic audience.

The financial independence of the public broadcasters remains a problem
despite the collection of television fees, advertising revenue and donor
assistance. The three main public broadcasting channels remain largely
dependent upon the state budget, which is often bitterly fought over by
political ethnic blocs. Many of the local television and radio stations
are still under state ownership and are dependent upon cantonal and
municipal government funding. Although the stations were supposed to be
privatized in 2002, their sustainability is in doubt.

Media associations such as the United Media Industry (UMI) and
Association of Electronic Media are still in the development stages
despite their earlier formation. The associations seem to struggle with
implementation of business plans, agreement on subscriber dues, and
general rationale for existence. It is unlikely that the professional
associations will contribute much to needed reforms.

### Quality of Journalism

There are two factors that contribute to the relatively low quality of
journalism. First, the overabundance of media outlets means that there
are always positions available regardless of the journalists'
qualifications. Secondly, universities woefully under-prepare students
for careers in journalism. There are five faculties that graduate about
120-150 students each year throughout the country. The theoretical focus
of the university education is not complemented with practical training
or development of production skills. A sweeping reform of the journalism
faculties is urgently needed.

The postponement or avoidance of higher education reform created a need
for journalist training outside the university system. International
donors have provided funding and training for thousands of journalists
in the past 12 years, but the training offered has been uneven in
quality. Many journalists mentioned that the U.S.-funded training
programs that focused on management and production skills were the most
helpful. Experienced journalists have a low level of interest in further
training; some complain that they are "over-trained." The most senior
journalists in Bosnia are resistant to outside advice and training, and
some have admitted to sending interns or designating a "permanent
trainee" to attend donor venues.

### Regulation

Ethical and professional guidelines for journalists are found in the
Press Code of Conduct, which is a self-regulatory instrument. The key
self-regulatory body for print journalists is the Press Council, which
is an independent NGO. The Council is charged with solving disputes
between the public and the press but has no power to fine newspapers,
revoke licenses or sanction publications. The Press Council is at a
critical state in its attempt to establish a self-regulatory framework
for the print sector.

The Communications Regulatory Agency (CRA) regulates the electronic
media. The Law on Communications established the CRA as an independent
nonprofit agency that regulates the television and radio, public
telecommunications networks and licensing. The legal independence of
this agency guarantees the independence of the electronic media from
government interference. The Communications Regulatory Agency cannot
offer all types of protection, but it has been praised for setting
standards of journalistic conduct. The CRA simply transfers EU
regulations as the easiest way to regulate, but this may not necessarily
be the best method for Bosnia. For example, nearly 30 percent of the
viewers in the RS watch foreign media. Croatian television broadcasts
dominate the market because they can beam territorial signals from
Croatian territory instead of via satellite, which means that no license
fees or revenue taxes are collected.

### U.S. Government Assistance

The U.S. Government has spent about \$38 million for media development
since 1996 in order to support independent broadcast and print media.
The goal has been to create a self-sustaining, independent media in
Bosnia that is free of political influence and provides citizens with
easy access to objective information to make informed social and
political choices. There were four key objectives: (1) training
journalists, (2) improving production skills, (3) creating legal and
regulatory framework, and (4) identifying a local partner to transfer
activities. The U.S.-based study trips and internships with American
broadcasters such as CNN were universally praised as providing critical
management training. Much of this has been accomplished, and it is time
for USAID to end direct support to Bosnian media except to the extent
that the media is a tactical component of other USAID DG programming

#### Media Centar Sarajevo {#media-centar-sarajevo .unnumbered}

USAID assistance was particularly critical in the creation of the Media
Centar Sarajevo (MCS). The MCS conducted programs on market research,
business plans, sustainable media, educational support and training,
legal framework and support of journalists' organizations. The MCS
became a very effective delivery mechanism for selected USAID Media
training activities. The MCS initially offered grants to more than 90
percent of the journalists who participated in training programs, but
this is no longer the case. These trainings and American educational
exchanges are cited as the cornerstones of private media development and
management.

#### Center for Investigative Journalism  {#center-for-investigative-journalism .unnumbered}

The Center for Investigative Journalism (CIN), which has been sustained
by USAID since it inception, aims to create the working conditions and
training that would allow journalists to practice investigative
journalism. Most newspapers in Bosnia do not have the staff resources or
time to develop in-depth reporting that relies on multiple sources and
background evidence. The CIN sought to develop a market for
investigative journalism by providing high quality stories to media
outlets free of charge that would raise the public's demand.

There are a number of difficulties with this project, notwithstanding
the relatively late transition of managerial responsibilities from
international consultants to local staff. The essential problem is that
there is no commercial market for investigative journalism. The primary
clients are daily newspapers that do not run long articles, especially
ones that are available to their competitors or available on the CIN
website. On a positive note, the project succeeded in recruiting and
training journalists from all geographic regions of the country on
investigative techniques. Journalists learned to build stories through
gathering evidence from multiple sources, whereas most news articles
only quote a government official or director in charge. An indirect
benefit is the new network of journalists who now have resources around
the country that can provide inexpensive or free research to their
colleagues located elsewhere.

#### Private Electronic Media {#private-electronic-media .unnumbered}

Private broadcasters such as Mreza Plus and TV Hayat said that USAID
assistance for equipment such as lighting, studios and other equipment
was critical to their establishment. The owners repeatedly praised
US-based management training as vital to their early survival. The
select group of media outlets including Mreza Plus, NTV Hayat, Radio
Stari Grad, Nezavisne Novine, and ATV would probably not have achieved
their acknowledged status if not for USAID funding. Unfortunately these
significant early contributions were not always well targeted or
managed, and they encouraged an unrealistic number of media outlets.
Market forces will sort this over saturation out in the next years.

There are essentially two questions regarding assistance to the media:
Does the media require continued assistance, and should USAID, given
reduced funding, continue to provide it? The media in Bosnia have made
enormous progress in the past decade but still fall short of producing
high-quality journalism, free from political influence. Aside from the
European Commission, the Open Society Fund and the Swedish Helsinki
Committee have committed to continuing media assistance.

As stated above, it is time for USAID to disengage from its direct media
development effort. Journalists may be as usefully trained as they can
be at this juncture. Eventually, university graduates with journalism
degrees will be prepared to enter the job market. The legal and
regulatory framework guiding journalism is sufficiently developed if not
fully implemented. The regulatory associations are formed but will
remain less influential than they should be until publishers and owners
find them useful. This is a slow but deliberate process that will force
adherence to professional and ethical standards. And, finally, the
decreased state funding and limited advertising revenue will force a
consolidation of the media market.

# UNIFYING STATE INSTITUTIONS IN A REFORMED CONSTITUTIONAL STRUCTURE 

The core DG problem is a lack of consensus on the basic nature and
authorities of the State at the national and subnational levels. However
obvious it may appear, this conclusion can serve as a defining
analytical and programmatic principle for donors wishing to assist
Bosnia-Herzegovina. A sound DG strategy should give highest priority to
addressing the core problem, and lack of consensus *is* the core
problem.

Can Bosnia remain a single national entity under the Dayton construct,
or does its future as a nation depend on a new constitutional framework?
Many argue that the current Bosnian state cannot succeed and therefore
will not survive indefinitely under Dayton.

As we see it, the "big picture" or overarching objective for all USAID
DG programming over the next three to five years should be to help
create and strengthen unified state institutions and a reformed
constitutional structure. USAID should focus on building social
consensus in favor of a reformed Bosnian nation-state that can protect
the interests of all citizens, with workable public institutions framed
in a workable constitution based on consensual agreement and ratified by
popular vote.

Some might argue that the current constitution and existing institutions
could serve as the foundation for a solid nation-state if only the
parties would exhibit greater willingness to work together. We see this
as no longer feasible given the strong identification of the current
constitution and some institutions with the political status quo. If
Bosnia is to prosper, a new or modified structure will have to realign
the powers of the state and the entities or their successors and local
governments.

The tough, hardnosed political bargaining inside government and among
political parties that will be a necessary part of this process can best
be facilitated by the diplomatic initiatives of the Embassy, not USAID.
In particular, USAID's involvement with a constitutional change process
should focus on mainly on civic engagement and participation to create
favorable conditions for change, described more fully below.

# PROGRAM RECOMMENDATIONS

USAID's support for unifying state institutions should emphasize the
courts, which are the institutional foundation for the rule of law and
the best arena for USAID to carry forward an existing successful
institution-building effort at the state level. Strengthening the state
MOJ helps to build a needed executive ministry that can relate
effectively with HJPC in the administration of justice.

Planned local government programming, while not dealing with state-level
institutions, nonetheless can support improved institutions and
governance at the municipal level in ways that open greater
possibilities for change at higher levels. Cross-entity activities can
break down counterproductive barriers to better governance. Suggested
new legislative programs and with political parties in their work in
parliamentary bodies would also be designed to strengthen those
institutions' and organizations' role in state-building, especially on
the question of constitutional changes and would be aimed at these
goals:

1\. Constitutional reform

2\. Democracy qualifications for NATO membership

3\. Adoption of EU standards and meeting political criteria

4\. State Parliament

> 5\. State-based rule of law (HJPC, MOJ)
>
> 6\. Cross entity local governance/decentralization

These are all strategic goals that deal with the long term solidity of
the Bosnian nation, but at the same time USAID cannot ignore more
immediate needs. Quality of life and the near-term prospects for
economic improvement will, to a considerable degree, affect how much
effort and risk Bosnians are willing to accept in their state-building
exertions. Failed government and instability, particularly if
asymmetrical as between the existing entities, are more likely to lead
to dissolution than consolidation. Better government and improved
conditions might lead to continued stasis but are more likely to make
the risks of an altered and strengthened state worth the effort if
viewed as necessary to protect these gains.

This suggests that USAID, in addition to fostering state-building in the
strategic sense, should also see that its programs are aimed directly at
improving quality of life. Better governance, rule of law and a better
standard of living are likely to increase faith in a strengthened state,
making such reforms more likely. In rule of law this would mean improved
court administration and public access to the court system. In local
government it would mean improved delivery of public services and
greater citizen participation in setting service and investment
priorities. Objectives would include:

1.  Effective local government service delivery

2.  Improved administration of justice

3.  Political parties acting as partners in governing

4.  Civil society advocacy for good government

Current debate on constitutional reform, police functions, State justice
entities, access to State media and other nation-state issues have
initiated an energized public discussion on possible consensus about
state-building. A continuation of this discussion is crucial to Bosnian
unity.

The resurgence of the RS and its likely trajectory towards further
reforms is leading to better social and economic conditions for its
residents. Improvements in RS probably cannot be matched in the
Federation due to structural dysfunctions and a lack of commitment on
the part of leadership elites. The old programming basis of entity
symmetry is no longer a sufficient basis for two-entity programming.
State-building and competent management of nationwide functions are now
more important than improvements in entity governance. At the same time,
improved living standards can provide the impetus for placing trust in
government that is necessary to any new state construct. As such, we
think USAID programming can aim to encourage policy and management
change from above while at the same time improving services and building
demand for change from below.

What ties the public institution-building activities (ROL and DLG) fully
into the recommended new strategy is the proposed larger engagement with
civil society in programs directly supportive of unifying state
institutions and improved constitutional structures. Civil society
activities will concentrate on building public support for national
institutions that can meet European standards and are part of a new
constitutional compact that will satisfy EU accession criteria as well
as meeting Bosnian needs. This "demand side" programming is the highest
priority for a new DG strategy that seeks to achieve systemic impact in
democratic state-building. Civil society advocacy to generate momentum
for significant constitutional reform and state institutions capable of
carrying out their national responsibilities is essential to "local
ownership" and sustainability of any post-Dayton definition of Bosnian
national identity and nation-state governance.

Our recommendations take notice of funding realities and existing
commitments and the necessity for the Mission to consolidate programs
and reduce implementing units. Much of this program is also supportive
of US State Department policy goals, which include a Bosnia that is:

-   effectively, efficiently, and democratically governed, and fully
    engaged in bettering the lives of its citizens, and

-   pluralistic, tolerant, and welcoming of different faiths, traditions
    and viewpoints

## Governance Programs

The local government programs under GAP should be continued and expanded
as well as being augmented with new initiatives aimed at the strategic
goals of supporting civil society advocacy development and improved
state structures. GAP II should continue to work with its legacy
municipalities and add new municipalities as budgets permit.

The current GAP implementer requires that participating municipalities
accept the entire range of GAP initiatives as a condition of GAP
participation. We recommend a change in this requirement to permit
greater programming flexibility and implementation of GAP II plans
resulting from effective citizen participation mechanisms. It is
contradictory to suggest that the program is responsive to citizen input
while it includes a strictly imposed set of program goals and
objectives.

To foster a vibrant citizen participation effort as a component of GAP
II, we suggest that the GAP II implementer or USAID directly:

a\. Award a grant or grants to one or more Bosnian organizations to
design and manage community development programs as companion citizen
input mechanisms to the GAP II projects (we understand that the SIDA
funding underwrites small scale local projects). Local citizens in GAP
cities would be identified and provided the technical and material
assistance necessary to their organizing citizen structures to provide
input to the GAP planning process. These citizen participation
mechanisms would remain in place through the life of the GAP programs to
advise local governments on implementation and any new GAP initiatives.

b\. These local citizen groups could also function as one local
component of the USAID-funded national advocacy effort aimed at
fostering state institutions. Either as an organization or as interested
individuals, these activists would be encouraged to participate
nationally or at the local level in communications efforts designed to
educate voters on constitutional reform, State Parliamentary
proceedings, and other efforts to strengthen state institutions. These
local groups might also be a point of contact for the USAID State
Parliamentary program designed to create linkages between
parliamentarians and their constituents.

c\. We also think it is important for municipalities to work together,
particularly across entities in both parts of BiH. To further this goal,
we suggest that the GAP II implementer subcontract with a formal joint
venture of the two entity-based Associations of Municipalities and
Cities to conduct cross-entity conferences, training and other
cooperative ventures designed to augment GAP II goals. Aside from the
practical provision of technical assistance, we think it is crucial to
the goal of strengthening state institutions that the local governments
interact on a non-entity basis as frequently as possible.

#### Governance Program Activities and Results {#governance-program-activities-and-results .unnumbered}

a\. analysis of local government budget procedures, accounting and other
cost control measures aimed at implementing modernized financial
management systems, particularly including CIP planning;

b\. evaluation of current local government business regulation practices
leading to technical assistance designed to provide efficient licensure,
permitting and records management;

c\. create local ward level or lower community development partners as
one platform for active and effective citizen participation mechanisms;

d\. assess citizen goals and objectives and teach the design and use of
citizen surveys that would inform all local government program elements
and measure changes in citizen satisfaction resulting from these and
other programs;

e\. investigate zoning, site planning and subdivision controls and
implement changes to integrate land use planning with building and
zoning regulations; and

f\. engage the Associations of Cities and Municipalities in cross-entity
training and advocacy programs particularly aimed at increasing the role
of the mayors and councils in an active role with the State Parliament.

## Rule of Law Support Programs 

JSDP runs through 2009, so the medium-term parameters for USAID
engagement in rule of law are already clearly established. The outlines
for future activities are also fairly clear, subject to later
revalidation and updated analysis (see below). If key results in JSDP
are not achieved, a much more skeptical assessment of future prospects
for assistance will be required.

Based on this assessment as well as our definition of the critical DG
problem and recommended strategy, USAID's rule of law programming has
the correct strategic focus. It is designed to strengthen state-level
institutions and set national standards for the administration of
justice even when delivery of services through the courts operates
mainly at the entity and cantonal level in local courts.

State-level jurisdiction is currently limited to war crimes and
"economic crimes" (i.e. major corruption and organized crime), and no
state-level supreme court is a final arbiter on legal questions.
However, this is merely a reflection of the limited authority of the
national government under the current constitutional structures and is
not likely to change much in the absence of a broader agreement on
constitutional reforms.

It is in this area of constitutional reforms -- consensual agreement to
create a national social compact on the fundamental nature and
definition of the Bosnian state -- that the rule of law reappears as a
new element of a revised DG strategy built around the issue of
consensus. Consensual agreement on a post-Dayton constitutional
structure necessarily involves conferring legal authorities on
government at all levels in accordance with whatever new arrangements
and structures are agreed upon. This may involve donor assistance on
constitution drafting or restructuring of the jurisdictional bases of
the court system.

As current programming runs for two more years, it is too early to say
what USAID's involvement might be in any specific fashion at that time.
The point to be made is that a strategic focus on building consensus for
reforms assumes some changes in constitutional and legal structures and
basic legal "rules of the game." Even if USAID's civil society-oriented
involvement focuses more on "demand side" processes to stimulate civic
engagement, the Mission should be ready to offer assistance on legal
issues as part of constitutional reform that goes beyond the boundaries
of a courts improvement project such as JSDP or its successor.
Presumably, this would not take the form of a free-standing project, but
rather be part of whatever activity(ies) the Mission settles upon to
help build national consensus to overcome ethnically driven political
differences.

#### Rule of Law Program Activities and Results {#rule-of-law-program-activities-and-results .unnumbered}

a\. design and implement better systems for publication and delivery of
notice of hearings and summonses;

b\. increase the effective use by judges of subpoena and contempt
authorities to ensure compliance with court procedures;

c\. assess weaknesses in the current system in order to provide for
stronger, more expedited enforcement of court judgments;

d\. most importantly for court administration, a more sophisticated,
computer-based, integrated case management system;

e\. technical assistance support on an as needed basis for
constitutional and statutory analysis and drafting as part of a
constitutional reform, state-building process;

f\. establish "minor case" court or other form of Alternate Dispute
Resolution as part of efforts to clear backlog;

g\. improved administrative procedures adopted and implemented across
entities in both parts of BiH.

#### Possible Program Outcomes {#possible-program-outcomes .unnumbered}

\- case disposition ratio improves and case backlog decreases (beyond
that with legislative changes achieved under JSDP);

\- improved public trust in justice system and satisfaction with
administration of justice services;

\- higher percentage of court judgments enforced, on a more expedited
basis;

\- modern case management system online and fully in use in all courts;

\- unified funding of court system (if not fully realized under JSDP);

\- specific legal inputs to state-building process improve
constitutional framework.

## Civil Society Support Programs

Since the end of the war, Bosnia has essentially been driven by the
provisions of the Dayton Accord. This has not resulted in a consensus on
the nature of the Bosnian state. Arguably, there is less agreement now
than at any time since the war. It is unlikely that a consensus will
ever be reached unless it is in large part demand-driven from the bottom
up. Obviously, a new cadre of less divisive leaders would help; but the
prospects for such a change are not promising, certainly not in the near
term. We think that organized civil society acting in concert with
responsible political actors can begin a national conversation that will
help foster a consensus process.

We recommend that USAID select one or two Bosnian NGOs or other civil
society organization(s) and provide them with the technical and material
assistance needed to design and manage a long-term national campaign
aimed at improving the political environment for state-building. The
implementer(s) would:

a.  write a strategic policy, marketing and business plans;

b.  design and execute membership recruiting efforts;

c.  identify coalition partners;

d.  sponsor policy research;

e.  conduct opinion surveys;

f.  write a communications strategy,

g.  design advertising;

h.  create advocacy and constituency development plans; and

i.  undertake all of the strategies and tactics of a modern national
    issues advocacy campaign.

This campaign would be coordinated with and gain strength from the local
advocacy efforts supported under GAP II. One target of its advocacy
efforts would certainly be the State Parliament, particularly those
members, caucuses and committees receiving assistance from the USAID
political parties program.

No single organization can successfully motivate every sector of
society. The principal program implementer(s) will develop messages
designed to obtain broad support, but other organizations will have to
communicate that support from their own perspective if the message is to
be compelling. As important, the media has to hear this message from a
variety of sources. We think USAID should encourage other actors in
civil society to support this campaign principally by improving their
communications capabilities. We recommend that USAID fund technical
assistance efforts, either through the program implementers or directly,
to train multiple civil society organization communications directors.
In some cases this might include funding the director position.

#### Possible Program Outcomes {#possible-program-outcomes-1 .unnumbered}

\- National NGO(s) dedicated to state-building advocacy while also
engaged with business, academic, religious and other civic interests;

\- NGO(s) build nationwide dues paying membership, employ trained
communications professional(s), develop nationwide communications
programs, and develop policies on constitutional reform, EU standards,
state governance and justice reform;

\- State parliamentary hearings held in response to constituent demand;

\- Media sector engaged in a fashion to make it responsive to
NGO/citizen state-building policies;

\- Constitutional reform debate supported by national media;

\- Public opinion favors consensus agreement on nation-state due to
broad public support effort;

\- Political parties adopt effective State platforms based on citizen
demand; and

\- National NGO(s) linked to GAP II "demand side" citizen participation
mechanisms.

## Parliament and Political Party Support Programs

The national political parties have demonstrated an ability to organize
and campaign at a level that no longer warrants direct campaign
assistance. Working to improve their capabilities at the entity level in
BiH is contrary to the goal of national consensus, and local level
political work will only act to exacerbate an already too partisan local
politics. Nevertheless, the parties will continue, for better or worse,
to play a central role in the political future of Bosnia, including any
debate and eventual agreement about the nature of the state. This debate
should be centered at the State Parliament, and we recommend that USAID
support a program to provide technical assistance to the political
parties and their members in their role as parliamentarians.

This would not simply be a parliamentary strengthening program, although
it should have some of the aspects of such a program due to the
rudimentary state of development of the State Parliament. Activities
would include assistance with the organization and management of
constituent services and other citizen advocacy work. Citizens would be
encouraged to approach State Parliament as a means to redress grievances
and members must be prepared to respond to such entreaties. Holding of
field hearings, even if just for informational purposes, would be one
way of to foster these new relationships.

Parliamentarians also need support in researching policy alternatives
and performing the financial analysis associated with such choices. This
program would include support for policy formulation through a sub-grant
to Bosnian think tanks or individual experts, some of which would
support GAP II decentralization goals. Constituency development efforts
would be centered on the local citizens groups supported by GAP II,
coordination with the consensus advocacy efforts sponsored by USAID and
joint programs with the USAID-supported communications directors from a
wide array of civil society organizations. Taken as a whole, this
program would provide the top-down support for consensus that
complements the bottom-up activities funded by USAID through its civil
society and local government programs.

At the same time, we think the national parties may be at a point where
broader democratization goals can be advanced as necessary to their
success at the polls. Issues of internal democracy, inclusive
membership, broad issues-based campaigns, membership development, open
candidate selection and other transparent processes would be in their
self-interest. This suggests a party development program, but in keeping
with the overall goal of supporting the State, these should be addressed
only on the national level and only with parties interested in
cross-entity development and multi-ethnic appeals throughout BiH.

#### Possible Political Party Program Outcomes {#possible-political-party-program-outcomes .unnumbered}

\- State Parliament increased administrative capacity;

\- State Parliamentarians active in state-building in response to
constituents;

\- State Parliament field hearings on constitutional reform and other
State institution-building debates;

\- Package I/II governance provisions debated;

\- Membership of national parties increased, particularly cross-entity
and among multiple ethnic groups;

\- Policy positions, candidate selection, fund raising and expenditures
and other party activities openly debated and resulting from transparent
processes.

# CONCLUSION

We recommend "unifying state institutions in a reformed constitutional
structure" as the main DG program objective going forward. USAID support
alone cannot effect constitutional change, nor should it expect to.
However, effective assistance in rule of law and local governance can
contribute significantly to improved government institutional
performance in those two key areas. Civil society programming, no longer
designed simply to strengthen civil society per se, becomes the critical
new tool to support civic activism in favor of a new and workable
consensual agreement on the nature of the Bosnian state and the national
identity of its citizens.

So many unforeseeable events will influence Bosnia's destiny that it is
difficult to draw a detailed picture of what a democratic Bosnian state
and society will look like in four to five years. Under a best case
scenario, using the recommended strategy and programming, we will see a
sharply improved court system and better local government performance.
Most importantly, Bosnia will have in place a reformed constitution
approved by a vote of the State Parliament and the Bosnian people.
Strong civic activism will have had a direct influence on political
leaders and the highest-level political decision-making in this process.
Bosnia will be a member of NATO and will have achieved candidate status
for accession to the EU.

Even if we assume that such fundamental changes will come to Bosnia only
incrementally and over a longer period of time, we still can expect to
see significant visible improvements in the administration of justice
and local governance that strengthen Bosnian democratic institutions.
Civil society activism and leadership toward national consensus on
state-building objectives will have generated continuing momentum for
fundamental constitutional reform of the "temporary" Dayton structures
through a peaceful political process.

# APPENDIX A: SECTOR POLICY BRIEFS {#appendix-a-sector-policy-briefs .unnumbered}

**SECTOR POLICY BRIEF:**

**RULE OF LAW IN BOSNIA AND HERZEGOVINA**

**December 2006**

For a more detailed description of the rule of law environment in BiH,
consult the The Open Society Fund's 2006 report "Democracy Assessment in
Bosnia and Herzegovina." The following is an edited excerpt from OSF's
report.

I. BACKGROUND

The BiH legal system is *de jure* and *de facto* made up of four
distinct legal systems with concurrent and overlapping competencies: the
State of Bosnia and Herzegovina; the entity of the Federation of BiH;
the entity of Republika Srpska; and the Brcko District. In addition, the
ten cantons in the Federation of BiH also have certain legislative and
executive powers. When discussing Bosnia's fractured legal system, it is
important to note that State-level laws can only trump entity laws in
those areas where the State has specifically been granted supreme
authority. Thus, the four jurisdictions apply slightly different but
equally authoritative civil, criminal, penal and criminal procedure
codes and there is no mechanism to reconcile conflicting interpretations
or procedures.

Over the past several years State-level competences have expanded
through transfers of powers from entity and cantonal ministries to new
state level institutions, such as the State Court, State Prosecutor's
Office State Ministry of Security, Indirect Taxation Authority, State
Ministry of Justice and the High Judicial and Prosecutorial Council
(HJPC)l. However, parallel executive, legislative and judicial
institutions remain. The State Justice Ministry has authority over the
other 13 ministries of justice (entity and cantonal) others only
regarding competencies that the other ministries have ceded to the State
Ministry. Outside those areas, the State Justice Ministry is just one
among equals. The same is true for the ministries of finance and
ministries of interior (which run the local police). There are two
exceptions: the HJPC and the Ministry of Security are unique State-level
institutions, with no local counterparts. Their authority, and that of
the Security Ministry's constituent law enforcement bodies, extends
throughout the whole country.

A particular feature in BiH is the Office of the High Representative
(OHR) which is the highest authority in Bosnia and Herzegovina under the
Dayton Constitution. The High Representative and his/her counterpart,
the Brcko District Supervisor, have unlimited "Bonn" powers to impose
legislation, strike down or ignore judicial decisions, and wield supreme
executive authority. The HighRep can overrule elected BiH officials. The
multinational Peace Implementation Council oversees the work of the OHR
and the Brcko District Supervisor. The High Representative's extra-legal
position and his/her ability to exercise the Bonn Powers are
intrinsically contrary to the principle of the rule of law. Although the
current HighRep has used the Bonn powers sparingly, previous HighReps
used it to significantly impact domestic political and legal issues,
such as proclaiming laws and appointing/removing government officials.
Thus, the Bonn Powers give the HighRep the ability to potentially
undermine the independence of the judiciary.

Bosnia's unique, complex legal and executive structure poses
considerable challenges to consistently and effectively implementing the
rule of law in BiH. The Dayton Constitution deliberately created
multiple semi-autonomous regions and a weak central state as a means of
ending the war. However, 11 years after the conflict, the Dayton
Constitution is one of the elements hindering the State's ability to
create a unified judicial system, thereby impeding the uniform
development and consistent application of laws throughout the entire
territory.

II\. KEY CHALLENGES IN THE JUSTICE SECTOR

1\. A Horizontal, Not Vertical, Legal System

The justice sector in Bosnia faces significant challenges from the
micro- to the macro-level, laws regulating justice sector institutions
lack harmony. Even in areas where the laws are in sync, their
implementation is uneven. Thus, for example, different courts and
prosecutors' offices have established different substantive and
procedural norms for preliminary hearings, plea bargain agreements, and
bail determinations. This means that in addition to not having equal
access to justice in civil or criminal matters, citizens in the same
situation are subject to unequal justice.

In actuality, most provisions in the Criminal, Criminal Procedure, Penal
and Civil codes are identical. However, it is important to note that in
those situations the different jurisdictions are not applying the *same*
law. In other words, the Federation may apply anti-corruption law that
happens to be identical to State anti-corruption law, but the Federation
is still applying Federation, *not* State, law. Because of continuing
political sensitivities concerning State versus entity authorities,
current discussions of justice sector reforms are framed in terms of
"harmonizing" rather than "unifying" the four legal systems.

2\. Inefficiency, Corruption and Lack of Credibility

Most Bosnians are extremely cynical about the independence and integrity
of justice sector professionals. Despite reforms in the BiH judicial
system, a high number of citizens still complain about the inefficient,
unresponsive and corrupt nature of judicial bodies, particularly at the
local level and particularly in civil matters, which affect the broadest
segment of society. There is a widespread perception that even basic
documents such as drivers' licenses and birth certificates can only be
obtained in a timely manner by greasing the wheels. In civil and
criminal matters, for the right price charges can be dropped, verdicts
can be bought, and cases can be buried or pushed up. Whatever results
money cannot get, political influence will.

Federation court reports suggest that the principal problem is in the
number of cases pending, transferred into the next year over and over,
always with an excuse (e.g., insufficient number of judges, inadequate
legislative competence). The vast majority of these cases are
non-payment suits filed by utility companies against non-paying
customers. Administrative law in Bosnia has not developed sufficiently
to address these *de minimus* claims and utility companies have taken no
steps to create alternative collection mechanisms, so they end up as law
suits in civil court, taking their place in the queue alongside or in
front of more serious property, family and other civil disputes.
Sarajevo Canton and the Banja Luka municipal district have the largest
case backlogs by far, but the problem is more widespread. Some
jurisdictions have little or no backlog, but use it as an excuse for
inefficient or corrupt practices. Alternative procedures to deal with
utility service debt collection would go a long way to improving
judicial efficiency and responsiveness.

Law schools in the region, Bosnia included, are doing little to
adequately train the next generation of leaders. First, law faculties
have failed to adopt modern, interactive teaching techniques and
materials. Instead, the vast majority of law professors continue to use
teaching techniques that emphasize rote memorization, depriving students
of the opportunity to develop critical thinking skills. Second, there
are crucial voids in the curricula at most law schools, in particular
the absence of meaningful ethics instruction and the lack of preparation
in advocacy skills. Third, law schools are perpetually under-funded. The
absence of adequate resources translates into, among other things,
limited access by students to up-to-date materials on both domestic and
international law. Legal education reform is crucial to the promotion of
rule of law within BiH, as well as to Bosnia's EU membership
aspirations. Future judges, prosecutors, and advocates need the skills
to adjudicate cases properly, fairly prosecute criminals, or
successfully advocate for their clients' rights. Society as a whole
benefits from properly trained legal officials. However, law schools in
the region are doing little to train the next generation of leaders.

III\. STRUCTURE OF THE BIH COURTS

In FBiH and in RS, there are five judicial instances: in FBiH, the
Constitutional Court of FBiH, the Supreme Court of FBiH, 10 cantonal
courts, municipal courts, and minor offense courts; in RS, the
Constitutional Court of Republika Srpska, the Supreme Court of Republika
Srpska, district courts, basic courts, and minor offense courts.
Pursuant to the Law on Courts of the Brcko District BiH, Brcko District
BiH and the Court of Appeals of the Brcko District BiH.

The Constitutional Court of BiH is the highest judicial authority on
disputes arising between entities and between government institutions
over the application or non-application of provisions of the BiH
Constitution (the Dayton Accords). When making its decisions, the BiH
Constitutional Court considers, *inter alia*, the BiH Constitution and
laws, as well as the European Convention for Human Rights. The BiH
Constitutional Court may consider judgments by any court where a
violation of Constitutions rights are alleged. BiH Constitutional Court
decisions are final and binding. Entity parliaments appoint six of the
nine judges for five years terms. The FBiH appoints four and the RS
appoints two. The remaining three members are appointed by the President
of the European Court of Human Rights.

The Court of Bosnia and Herzegovina was established pursuant to the Law
on the Court of BiH, which came into force on December 8, 2000. The
Court has criminal, administrative, and appeals departments and is
managed by a Registry. The State Court is *sui generis*, functioning as
a self-contained court of first instance, a court of appeals, and a
court of cassation. The State Court has jurisdiction only over specific
types of crimes, namely, war crimes, financial crimes (e.g., official
corruption and human trafficking), and crimes against the State (e.g.,
treason and terrorism). Unlike the BiH Constitutional Court, which is
the final authority on questions of constitutionality, the State Court
operates alongside, not above, the Federation and RS Supreme Courts. It
has no power to review decisions by other (not lower) courts. The
Federation and the RS Supreme Courts function autonomously, as do the
Brcko District Appellate Court, handling all civil matters and all
criminal matters lying outside the State Court's authority.

Similarly, BiH does not have a single prosecutorial system and the BiH
State Prosecutor's Office is not the highest prosecutorial institution
in the country. It is also a *sui generis* institution applying only the
criminal and criminal procedure codes of the State of Bosnia and
Herzegovina, and applying them only to itself. Because entity courts are
not subordinate to the State Prosecutor, it is not possible for him to
guide the work of entity prosecutors, let alone more subordinated levels
(cantonal prosecutors in the Federation of BiH, and district prosecutors
in the Republika Srpska). Furthermore, when the State Prosecutor refers
a case to an entity or lower court, that case is no longer governed by
State law. So, for example, when the State Prosecutor refers a war
crimes case to a different (not lower) court, that case must proceed
under ordinary murder, rape or assault laws because the Federation, RS
and Brcko District Criminal Codes have no provisions related to "war
crimes."

IV\. HIGH JUDICIAL AND PROSECUTORIAL COUNCIL (HJPC)

Since May 2004, when the Law on the High Judicial and Prosecutorial
Council was adopted, the process of vetting, appointing and disciplining
judges and prosecutors in BiH has been the sole competence of the High
Judicial and Prosecutorial Council of BiH (HJPC). The HJPC replaced the
previous three high judicial and prosecutorial councils (one at state
level and two at entity levels), which had been established in 2002 as
part of the overall "Rule of Law and Access to Justice Reform in BiH"
under the auspices of the international community and the leadership of
the Office of the High Representative. The Independent Judicial
Commission was established, tasked with conducting the process of
re-election of all the judges and prosecutors in BiH. In order to enable
the establishment of the high judicial and prosecutorial councils, it
was necessary to amend entity constitutions, which was also done by
intervention of the High Representative. This was the first time that
the legislature in BiH was prevented from appointing judges and
prosecutors, which had been the case until then.

Members of the HJPC, 15 in total, are representatives of courts,
prosecutors' offices, and bar associations, as well as two members
appointed by the BiH Assembly and the BiH Council of Ministers. The
primary task of the HJPC is to secure an impartial, independent, and
professional judiciary within its competence, as prescribed by Law.
Members of the HJPC:

> \(1\) appoint judges, including presidents of courts, lay judges and
> auxiliary judges, in all courts at state, entity, cantonal, district,
> basic, and municipal levels in BiH, including the Brcko District BiH,
> with the exception of constitutional courts of BiH entities;
>
> \(2\) appoint chief prosecutors, deputy chief prosecutors and
> prosecutors in all the prosecutors' offices at state, entity,
> cantonal, and district levels in BiH, including the Brcko District
> BiH;
>
> \(3\) give proposals to competent authorities in relation to their
> nominations and appointments of judges of the Constitutional Court of
> Republika Srpska and appointment of judges of the Constitutional Court
> of the Federation of Bosnia and Herzegovina. In effecting duties set
> by this paragraph, before giving its proposal, the Council shall seek
> written opinion from the relevant constitutional court;
>
> \(4\) receive complaints against judges and prosecutors, conduct
> disciplinary procedures, set disciplinary responsibility, and deliver
> disciplinary measures against judges, lay judges, auxiliary judges and
> prosecutors;
>
> \(5\) decide on appeals in disciplinary procedures;
>
> \(6\) decide on temporary removal from duties of judges, lay judges,
> auxiliary judges, and prosecutors. The same Law sets competences of
> the HJCP, as well as procedures for the process of election and
> appointment of judges and prosecutors, as well as forms of offenses
> and disciplinary procedures against judges and prosecutors. HJPC is
> also in charge of overseeing court administration in all but the
> State-level courts.

V. FINANCING OF THE JUDICIARY

Despite the establishment of a single High Judicial and Prosecutorial
Council of BiH, the system of financing remains a considerable problem
in effecting judicial independence. Namely, municipal and cantonal
courts in the Federation of BiH are financed by cantonal budgets, making
them dependent on the local executive authorities. This system of
financing of the BiH judiciary is inadequate as it may lead to uneven
access to justice for BiH citizens. It is thus possible for the local
political authorities to influence the effectiveness of courts by
denying or providing financing irregularly, thus, influencing citizens'
rights to quick, fair and effective access to justice. Furthermore, as
there is no state level system for re-distribution of resources from the
wealthier to the poorer parts of the country, some courts work in
relatively acceptable financial conditions, whereas others (due to a
lack of funds) experience severe problems in every day operations. This
situation is exacerbated by court debts, which can pile up for various
reasons, including the court's obligation to pay high private defense
attorney fees ("tariffs") in cases where criminal defendants claim they
cannot afford counsel.

VI\. DUE PROCESS IN BIH

The Constitution of BiH guarantees the right to a fair hearing in civil
and criminal matters, as well as other rights related to criminal
proceedings in Article II/3.e), and that right is guaranteed by entity
constitutions as well. The BiH Criminal Code, the BiH Criminal Procedure
Code and the BiH Civil Procedure Code were adopted in 2003, at the same
time that the Court of BiH and the Office of the BiH Prosecutor were
established. These codes were prepared under the direct guidance and
strong influence of the international community. One of the results is
that the adversarial system replaced the inquisitorial system. This was
accepted widely as a step forward. Still, it should be noted that
criminal legislation is a peculiar mixture of continental and common
law, with instruments of one system inserted into the other. This
hybrid, with a mixture of two systems of law, is focused largely on the
principle of efficiency, sometimes to the detriment of the principle of
fairness.

BiH Constitutional Court decisions are adjusting criminal legislation
and procedures as legal practice under the new system develops.
Decisions from the European Court of Human Rights may also impact this
process, as BiH has acceded to the Council of Europe, and BiH citizens
may now lodge applications with this Court in cases of complaints
related to rulings by domestic courts. Laws on Civil Procedure in BiH,
FBiH and RS are largely based on the prescribed constitutional
principles, but civil justice is rather marginalized in comparison with
criminal justice, which receives significant attention and funding from
the international community. Amendments of legislation gave priority to
the assumed "efficiency" and the still unattained effectiveness of
proceedings, and less to equality and fairness, which can ultimately
lead to very negative consequences**.** The best example is the new
institute of plea bargaining. Plea agreements have become one of the
core mechanisms within the criminal procedure in BiH since its
introduction in 2003. As part of the intensive reform of the criminal
justice system, this common law based mechanism allows prosecutors and
defendants to negotiate aspects of sentencing, provided that defendant
admits fully to the crime and agrees to give up certain key rights, such
as the rights to public trial and to appeal. The BiH judiciary has
quickly adapted to the use of plea agreements and embraced their use in
all manner of cases, from the most minor trespassing offences to crimes
against humanity. Plea agreements are designed in theory to maximize
scarce judicial resources thereby enhancing the fair administration of
justice for all. Although termed as a "shortened proceedings" in the
national legal framework, there should be no curtailing of the respect
for fundamental human rights, as observed in the shot history of using
this institute in BiH.

One of the elements of the right to a fair trial is the possibility of
receiving legal assistance in access to court. The courts are only
required to provide legal aid to indigent and socially vulnerable groups
in criminal cases when the defendant makes a specific request. Criminal
procedure legislation at all levels regulates the issue of ex officio
defense and provides for the possibility of a court-appointed,
court-paid lawyer when the crime in question carries a potential
sentence over 10 years, and in cases where the "interests of justice so
require." There are no public defenders in BiH. All defense attorneys
are private practitioners. The RS Civil Procedure Code provides for the
possibility for a representative of an NGO providing legal aid to appear
as legal counsel, and the Brcko District BiH has a Legal Aid Office,
which some believe is the model of regulating the legal aid system
across BiH. In the Federation recently passed amendments allowed courts
to appoint as *ex officio* representation lawyers/attorneys from *sui
generis* institutions, such as legal aid offices in both civil and
criminal matters. This is a great step forward, but only one of several
needed to set up legal aid offices. Currently only Zenica-Doboj canton
has such law. The other nine Cantons throughout the Federation have not
yet prepared or adopted new laws on legal aid as a prerequisite for
setting up the *sui generis* offices.

Although there have been several attempts, there is still no law on
legal aid applying to the BiH State Court. The NGO Vasa Prava ("Your
Rights") is only civil legal aid organization that operates throughout
the country.

VII\. DEVELOPMENT PROBLEM

Within the context of a very complex social, political, and economic
system, a fragmented judicial system has been established, with a large
number of pending cases. Courts are overburdened and slow, and citizens
are displeased with what they perceive as a lack of professionalism
within the judiciary.

Despite interventions by OHR and the international community, the "Court
of BiH" project has not unified the judicial systems in BiH. Rather,
four separate, though almost identical, legal systems co-exist uneasily
side by side. Many feel that the international community and OHR have
focused mainly on the State Court, which handles war crimes, organized
crime and other financial crimes, corruption, and crimes against the
State. General crime, civil, extra-judicial and administrative
procedures that play out in the entity and Brcko courts and the
constitutional courts enjoy far less attention from the international
community.

It is important to note that despite the legislative changes, BiH
citizens still spend a long time waiting for valid judgments. In one of
its decisions, the BiH Human Rights Chamber observed that, pursuant to
Article 6 of the European Convention, the state has a positive
obligation to organize its legal system in such a way so that it
provides for all persons not only the right to a fair trial in relation
to their civil rights and duties, but also to guarantee the "reasonable
time" of duration of such proceedings. The FBiH Ombudsmen's report for
2004 also indicates violations of the right to a fair trial in that
proceedings sometimes continue for ten, even 15 years. Official data on
duration of proceedings before BiH courts is not available, although it
is officially gathered ---including the duration of investigation, wait
time for a hearing, length of appeals procedure for either civil or
criminal charges. Moreover, in the domestic legal system, there is no
effective legal remedy allowing an applicant to appeal against
excessively long proceedings. On the positive side, the law stipulates
that criminal suspects may not be held in custody for more than 12
months, so a defendant does not languish in jail while his/her case
languishes in court. Persons accused in State Court may be held up to
two years, due to the severity of the crimes alleged and the high
potential for defendants to flee Bosnia.

VIII\. ACTIONS TAKEN TO DATE

Judicial reform in BiH was launched in 1998. However, real progress only
began in 2003, following the establishment of the High Judicial and
Prosecutorial Council (HJPC), State Ministry of Justice, State
Prosecutor's Office, and BiH State Court, which contains the War Crimes
Chamber. One of the first steps in the reform was the re-appointment of
judges and prosecutors, with a concurrent reform of legislation, which
brought systemic novelties into procedural legislations. The process of
re-appointment of judges and prosecutors by the HJPC was almost
completed a year ago. However, the latest amendments to the Law on the
HJPC made the Council in charge of the appointments of minor offenses
judges as well, and the process is still on-going. The number of
judicial posts was decreased by 30%, and 20% of the remaining positions
have been filled by new judges. There are several disciplinary
procedures under way, mainly in relation to unethical conduct, but also
some related to alleged incompetence. A foreign national had been the
chief disciplinary prosecutor until August 2005, when the HJPC appointed
a BiH national to this post. The BiH national is not doing a very good
job of protecting the judiciary against the appearance of impropriety,
at least not at the national level. During his tenure, the State
Constitutional Court President was on trial for months and never forced
to go on suspension, or at least step down from the presidency. The BiH
State Court President just suspended a judge who is on trial for sexual
harassment, after repeatedly requesting the Disciplinary Prosecutor take
action.

According to the Council of Europe, inaugurating the War Crimes
Department of the Court of BiH, and the Special Section for War Crimes
of the Office of the BiH Prosecutor was "the most significant event in
the area of judicial reform in BiH in the past several months." With it,
all the necessary institutional and legal preconditions for prosecuting
war crimes in BiH in compliance with the highest European standards have
been met. BiH thus became the first country in the region to become an
equal partner of ICTY in prosecuting persons indicted by The Hague using
local resources.

The Office of the Registry was established on the basis of an Agreement
between the High Representative and the Government of BiH, signed on
December 1, 2004. The Registry administers and provides support services
for Section I for War Crimes, and Section II for Organized Crime, Fraud
and Corruption of the Criminal and the Appeals Departments of the Court
of Bosnia and Herzegovina, as well as to provide services of support for
the Special Department for War Crimes and the Special Department for
Organized Crime, Fraud and Corruption of the Office of the BiH
Prosecutor.

Courts and prosecutors still lack sufficient staff and adequate
resources. In December 2005 the High Representative decided to freeze
judicial salaries in an effort to contain costs. A Working Group
comprising representatives of state and entity ministries of justice
agreed to reduce judges' salaries by 10% to allow for financing of other
operational costs, prosecutors and support personnel. As of 2007, local
Bosnian judges and prosecutors will be financed solely by the state.

Since reforms have not brought improvements in terms of pending cases
and enforced judgments, the European Commission will invest several
million euros in the introduction of IT into judicial administration.
The HJPC is proposing the establishment of a single Centre for Training
of Judges and Prosecutors in BiH, to be financed by the state budget as
of January 1, 2007. The Council of Europe, in collaboration with the
European Commission, played an important role in providing support for
the existing two training centers, manly through assistance in training
events (for judges and prosecutors) and the establishment of a system of
initial training (for future judges and prosecutors).

Reforms in court budgets are still needed to strengthen judicial
independence. In the future, each court will submit its own budget
proposal to the competent ministry of justice, along with comments by
the HJPC. (This would be in compliance with the entity laws on courts
and the Law on HJPC, although this law is still in the legislative
procedure in the Federation of BiH.) Also, the relevant parliaments will
approve budgets for each individual court. The HJPC has proposed an
initiative to unify the Federation judicial budget in order to make the
process more cost-effective. However, this initiative is stalled,
pending the formation of a new parliament and the appointment of new
FBiH justice and finance ministers.

The prison system in Bosnia does not meet international human rights
standards. Prisons are generally overcrowded, with inadequate medical
facilities and few or no provisions to accommodate the needs of juvenile
offenders. The new state level Law on Enforcement of Criminal Sanctions
has been adopted, developed with assistance from Council of Europe
experts, and the Council of Europe is also leading efforts to improve
detention facilities. However, there is still no clear and comprehensive
prison reform strategy in BiH. Such a strategy would need to discuss
creating a single prison administration for BiH, consider alternative
detention measures, and elaborate a National Action Plan for Combating
Drug Abuse that included inmate treatment programs. The government has
approached international donors to fund construction of a new maximum
security state (closed type) prison that could house approximately 400
persons. Under current project plans, the prison would cost
approximately 14.2 million euro. To date, no international donor has
pledged money for this project.

All the measures aimed at improving the situation in the judiciary are
supported and publicly advocated by the authorities and politicians.
However, what really moves the changes is the engagement of the
international community. On one hand, this is good, as it does move
changes. But on the other hand, it is a problem, *inter alia*, because
it imposes certain solutions that may cause problems in implementation.

IX\. THE U.S. GOVERNMENT ASSISTANCE

The Justice Sector Development Project (JSDP) is a five-year USAID
initiative being implemented by the East-West Management Institute
(EWMI). The JSDP is committed to enhancing the capacity of the justice
system to maintain and strengthen the rule of law. An overarching goal
of the JSDP is to provide institutional support that furthers judicial
independence and the fair and efficient administration of justice
throughout BiH. In particular, the JSDP is dedicated to reform measures
that strengthen the High Judicial and Prosecutorial Council of BiH and
the State Ministry of Justice, institutions that are newly established
and play a key role in justice sector policy. The JSDP is further
dedicated to improving court administration in BiH courts.

Component 1 - Strengthening the High Judicial and Prosecutorial Council

JSDP provides various expertises to the HJPC to help ensure its
successful transition to a viable domestic organization. JSDP is
assisting the HJPC with institutional development in fulfilling its
constitutional authority to govern the judiciary. Current areas of
collaboration include justice sector policy-making, organizational
planning and management, codes of ethics for judges and prosecutors,
judicial performance standards, and expert technical assistance to meet
specific institutional needs

Component 2 - Court Administration Reform

JSDP is spearheading court administration reform through its Model Court
Initiative introduce eleven reform activities in the model courts --
among other things, a common case number system, judicial and court
management, case backlog reduction, and public access to court services.
Each year an additional four to seven courts are incorporated into the
project.

Component 3 - Supporting State MOJ/Legislative Process

JSDP is supporting the institution of the State MOJ to carry out its
mandates by providing technical assistance and training for sectors'
development and strengthening the legislative  process by helping
implement the requirements of the newly enacted Uniform Drafting Code,
including a "dos and don'ts" drafting manual, compiling a database of
drafters and training in legislative drafting and EU harmonization. JSDP
is also promoting citizen participation in the legislative process using
draft laws proposed by the BiH MoJ.

Component 4 - Criminal Legal Aid Reform (ended January 2007)

JSDP is working with BiH counterparts to reform the current system of
court appointment of counsel in criminal matters. JSDP is assessing the
ex-officio system and the pubic defender office model with regard to the
cost and quality of criminal defense representation. In addition, JSDP
is promoting the introduction of standards for court appointments, the
tracking of statistics relevant to representation of indigent criminal
defendants, and the reform of the attorney tariff system.

Grants Program

The JSDP will solicit grant proposals through an open call for proposals
designed to encourage creativity among potential grantees in advancing
justice sector goals. The JSDP will identify illustrative project
activities in its Request for Applications (RFA) to provide general
guidance. The RFA will identify two broad grant categories:

Advocacy Grants: These grants will support efforts to draft, advocate
and/or implement laws, regulations, policies and practices relating
justice sector reform. Activities might include research and analysis
that produces reform recommendations, trainings or technical assistance,
access to justice initiatives, or other projects addressing key issues
facing the justice sector.\
\
Public Education Grants: These grants will support efforts to increase
public awareness of the judicial and legislative systems and reform
efforts in these sectors. Activities might include brochures or other
publications that educate the public about the functioning of the
judicial and legislative systems, media campaigns, local opinion
polling, the establishment of information centers, or other public
education initiatives.

The American Bar Association Central European and Eurasian Law
Initiative (CEELI) currently implements a legal education reform program
in (BiH). This program, which began in spring 2005 and ends on July 31,
2007, focuses on skills-based legal education reform, through activities
such as support for the development of law school clinical programs,
internships and moot court competitions.

ABA/CEELI is assisting the Banja Luka Law Faculty to develop a pilot
legal clinic program, which focuses on work with live clients. Students
offer free legal aid for indigent people, under the supervision of
practicing attorneys as mentors. The live-client clinic provides free
legal aid in the field of civil, and partially, administrative law.
ABA/CEELI is also assisting the Bihac Law Faculty in developing a
simulation legal clinic program that provides a hands-on experience to
future law students and helps them develop practice-based professional
skills and values in the field of civil law (procedural and
substantive). Both clinics include a classroom-based skills workshop and
an external office internship component.

ABA/CEELI first implemented the Judicial Reform Index (JRI) in BiH in
2001. The JRI review consists of the expert collection and analysis of
first-hand intelligence about the actual state and progress of judicial
reform in a country (or region) and compares that information to 30
important indicators of judicial reform in emerging democracies. In 2006
ABA/CEELI implemented the second JRI in BiH, and this analysis reflected
a number of positive achievements in the area of judicial reform that
have been achieved since 2001. They noted in particular the
establishment of the single HJPC. However, the newness of many of
changes led ABA/CEELI to observe that it was too early to determine the
effectiveness or impact of the reforms.

**SECTOR POLICY BRIEF:**

**POLITICAL PARTIES IN BOSNIA AND HERZEGOVINA**

**December 2006**

 

I. BACKGROUND

As Bosnia and Herzegovina (BiH) slowly consolidates its structures of
governance and its political culture, a number of disturbing trends
persist. Although the 2006 General Elections showed some improvement the
voter turnout stayed only a bit above 50%. The personality and
position-driven calculus of politics in BiH has shown no signs of
abating, and expectations of government and politicians are very low.

For a variety of understandable reasons, great numbers of BiH citizens
have lost faith in the ability of the existing political system to
effect positive change but the decline in turnout is partly caused by
frequent elections that have not brought about substantial political
change. As a result, issues of long-term development and comprehensive
democratic change within parties and the parliaments have been
superseded by the needs of campaigns and the results to be gained
through elections. Election cycles precluded party and parliamentary
activities that would have encouraged long-term development in a
continuous way. Actually, the 2002 General Elections were the first
post-war elections in BiH to allow a full 4-year mandate to elected
officials and MPs.

Not all of the blame for the current situation can be laid at the feet
of political parties as institutions. The complicated, multi-layered and
redundant systems and levels of governance and regulation, as well as
the poor economic situation would challenge even the best of political
parties from consolidated democracies. An unfortunately large proportion
of BiH citizens believe, with some justification, that parties have
served to deepen and further complicate an array of already serious
problems. Indeed, there is ample evidence that political elites -- and
those who support them -- profit handsomely from the status quo. Because
parties have managed to insulate themselves from their constituents and
in many cases their own base, the incentives facing governing elites are
often at odds with the public interest, and politicians are allowed to
ignore vital issues. Because the legislative process is often haphazard
and disarticulated from practical, real world concerns, failure to act
on even simple matters is viewed as acceptable. The accountability of
political actors and institutions to their constituents and public must
be improved.

Another constraining factor is that of ethno-nationalism, which
continues to permeate politics, fragment the political spectrum, mute
policy discussion, and complicate institutional design and operation of
political structures. These constraints place limitations on expected
results for both parliamentary and political party programs.

II\. ROLES OF INTERNATIONAL ORGANIZATIONS IN RULING BIH

The governmental and legislative functions in the country are heavily
influenced by, and often subject to the direction of, the Office of the
High Representative (OHR). Parliamentarians and parties see less
importance in carrying out 'shadow' or narrowly circumscribed governance
functions, and therefore feel less incentive to be active or
responsible. In addition, parties remain less connected to society
because citizens, civil society organizations, and economic interest
groups perceive that the parties are not conduits to real political
authority or policy-making.

Nevertheless, power and authority eventually must shift from OHR and the
international community in general to local indigenous political
institutions. The OHR is scheduled to close in summer 2007, and to
transition to the Office of the European Union High Representive. The
Peace implementation Council[^4] (PIC) will consider any further
duration and scope of mandate of the OHR at its session planned for mid
February 2007.\
Strong, democratic political parties will be critical to fully carry out
their roles and functions in a democratic system when the OHR withdraws.

III\. POLITICAL PARTY DEVELOPMENT CHALLENGES

Political parties in Bosnia-Herzegovina do not fare well in public
opinion surveys.[^5] To regain the trust of people, a political party
must be able to seriously and systematically tackle the issues of
relevance for the people. Some political parties are relatively new and
inexperienced. Many frequently lack the ability to play their roles of
mobilizing and representing citizens and linking them to governance.
Also, parties often do not give citizens a sense of meaningful political
identity and participation. Even in the case of some older parties,
links with the general public are often scarce, and often civil society
organizations and social movements attempt to substitute for the role of
parties. Non-party activism, however, does not necessarily improve the
performance of democracy: it tends to reflect single issues and not the
wide diversity of policies with which most parties are concerned.

As in many developing countries, political parties in BiH are often
personality-based and lack the organizational capacity to campaign
nationwide, present ideologically compatible candidates, and recruit and
train pollwatchers. BiH political parties lack comprehensive strategies
on how to govern after winning office, and are often ill-prepared to
staff, administer, and oversee government agencies. A democratic
election serves only a limited temporal purpose if the resulting
government cannot at least partially meet voters\' expectations.

Challenges can be summarized as follows:

-   Various and often competing levels of power and authority between
    the entity and the BiH institutions;

-   Ethnicity as the primary identifier among parties and voters;

-   Lack of policy identification among parties;

-   Parliamentary institutions of insufficient accountability,
    responsibility and lack of the ownership over the legislative
    process.

Notwithstanding these constraints, it is inevitable that there will be a
transition in power and authority from OHR and/or the international
community to local indigenous political institutions.

IV\. IDENTIFIED NEEDS

1\. Insufficient Institutional Political Party Development

Institutional development can be defined as the process whereby parties
become better organized, practice democratic values and establish rules
and procedures that will allow them to compete more effectively and be
more successful in elections and at implementing their policy
preferences. In order to institutionalize themselves, political parties
need to evolve in a process that closely follows the public sentiment
and parallels social development. It requires a flexible mix of guiding
ideas, underlying interests, democratic practices and rational
decision-making.

##### 1.1. Organizational Strength {#organizational-strength .Appendix-subheader-3 .unnumbered}

In comparative terms, political parties in BiH appear relatively strong
and prominent in BiH. Parties appear to have relatively comprehensive
organizational coverage of the country. Party members are major players
in parliaments and executives at all levels of government. State funding
of political parties has provided parties with a built-in resource base.

However, parties do not effectively deploy their organizational
resources at the local, intermediate and national levels. In this sense,
parties should be able to use the material capacity as well as the human
and financial resources that a party has, including the skills and the
personnel with which these are managed. Deployment and political
promotion of younger party members is not effective in BiH.

##### 1.2. Political Identity {#political-identity .Appendix-subheader-3 .unnumbered}

Although political parties widely understand the importance and utility
of researching the electorate, they have not yet developed the
institutional capacity to undertake and analyze this research
themselves. They appear to understand how useful polls and focus groups
can be for responding to the priorities and preferences of the
electorate, but do not yet generally have the funding to conduct this
research reliably or the expertise to design, oversee or analyze this
research themselves.

Political parties have weak bases for researching and formulating public
policy. Think tanks are still developing in BiH, and parties have not
developed this expertise 'in-house.' Because parliaments are weak both
politically and institutionally, they lack the committee staff and
research structures that often stimulate policy development within
parliamentary caucuses and thus within parties.

Political parties accept the importance of developing organizational
structures and strategies for promoting themselves in the mass media,
but to this point have poorly developed capacities in the area of
communications and public relations. They appear willing to make
improvements in this area, but have yet to do so. A few of the parties
express frustration that the mass media does not cover their positions
and activities accurately or sufficiently.

##### 1.3. Internal Democracy {#internal-democracy .Appendix-subheader-3 .unnumbered}

As was the case in other Central and Eastern European (CEE) countries,
most of the biggest political parties in Bosnia-Herzegovina were formed
in early 1990s. Some new political entities have appeared after the war
1992-1995 but most of these did not gain wider influence in the
political spectrum. Again, as was the case elsewhere in CEE, parties
started as social movements rather than as political parties, and in BiH
many have had strong national or even nationalistic orientation. As a
consequence, their organizational structure is very weak. With the
exception of the post-communist successor Social Democratic Party (SDP)
to a certain extent, only a minimal role is played by the general party
members, whereas a dominant influence is exerted by party leadership. In
many cases the recognition of what party members are and what they might
do is often lacking. In order words, the parties in BiH are more cadre
than mass, more general than specific in their target audiences and more
concerned with votes than with members. The National Democratic
Institute (NDI) has been working since 1996 to strengthen the role of
members within political parties in BiH. The International Republican
Institute (IRI), starting in 2004 in BiH, has been working on
strengthening membership orientation of political parties as well.
Although some improvements are noticeable, much more should be done to
support the development of a variety of internal party mechanisms and
tools to involve membership in policy planning and the decision making
process. A general sense of the lack of internal democracy appears to be
a significant reason for people not to trust political parties in BiH in
general, negatively affects people's will and interest to join parties
(apart from carrier building aims).

Democratic values and practices are crucial for democratic
institutionalization and the development of party strength. It is
preferable to practice democracy within one's party. When this is not
the case, voters readily perceive the contradiction and a party that
does not practice what it preaches is less likely to be favored at
election time.

##### 1.4. Internal Unity {#internal-unity .Appendix-subheader-3 .unnumbered}

BiH has witnessed disruptive divisions of political parties. Such
divisions happened in almost all of the bigger parties in BiH, from the
centre-left to those at the centre-right and the extreme right side of
the spectrum.

While a diversity of opinions is to be cherished and defended within a
party, splits and erosion of party membership in BiH have been caused
more by the lack of a solid internal democratic structure, rules and
procedures as well as ideologically vague organizations. The divisions
within political parties in BiH have brought only fragmentation and
instability of the political scene. Divisions also reflected negatively
on the work of the legislatives, by making it difficult to form stable
and lasting alliances.

Disagreements occur from time to time in any large organization. The
worst consequences of factionalism, splits, and loss of public
confidence can be minimized by having mutually agreed upon rules and
continued due process so that democratic pluralism will not lead to deep
divisions. In general, this can be accomplished by ensuring internal
democracy and by adhering to the party principles, program and statutes.
These measures are also important preconditions for any eventual
coalition building attempts.

##### 1.5. Campaigning Capacity {#campaigning-capacity .Appendix-subheader-3 .unnumbered}

In comparative terms, political parties in BiH appear relatively strong
and prominent. Parties appear to have relatively comprehensive
organizational coverage of the country although ethnic and entity
division of the country marks and limits their achievements at the
elections. State funding of political parties has provided parties with
a built-in resource base.

In pragmatic terms BiH political parties are almost universally
understaffed and weakly organized. They do not possess the resources or
personnel of the parties of Western Europe. They often remain fragile,
lacking both a strong organizational structure and a solid party
identity. They are mostly catch-all parties, developing as organizations
with very loose electoral constituencies that appeal to a wide clientele
of voters. Although the party system in BiH has evolved, in many ways
parties can still be characterized as "electoral parties" that are
likely to offer ideological and policy programs to win the elections as
opposed to the parties from developed democracies that concentrate on
winning elections to implement their programs. Consequently, candidate
selection system, although varying from party to party, mostly serves to
secure sinecures for party cadres than to allow promotion of new
political ideas and approaches.

2\. A Desirable Party-Civil Society Relationship

Parties still do not have strong collaborative relationships with civic
organizations nor do they appear to generally enjoy civil society's
trust. Civil society organizations are ambivalent about political
parties -- hoping that parties will become more responsive, but at the
same time disappointed in past party performance. Parties generally show
an interest and willingness to work more closely with civil society, but
appear to lack a good knowledge of BiH's civil society sphere and do not
yet have a strategy and/or 'know-how' to accomplish this.

**SECTOR POLICY BRIEF:**

**MEDIA IN BOSNIA AND HERZEGOVINA**

**December 2006**

I. BACKGROUND

The uniquely complex political situation in BiH impacts significantly
the development of the media. Following the practice of western liberal
democracies, freedom of expression and freedom of the media in BiH in
general are guaranteed by the Constitution, the European Convention on
Human Rights, and several national laws including: the Law on Protection
from Defamation (hereinafter: Defamation Law) which decriminalizes
defamation, and the Law on Communications, which established the
Communications Regulatory Agency (CRA).

Following is an edited excerpt from the Open Society Fund's "Democracy
Assessment in Bosnia and Herzegovina," a 2006 report that summarizes the
development of the BiH media.

1\. Independence of BiH media

##### 1a. Press  {#a.-press .Appendix-subheader-3 .unnumbered}

The press is not subject to regulations in terms of editorial policy and
content; instead, its ethical and professional standards are
incorporated into the Press Code of Conduct, which is a self-regulatory
instrument. The key self-regulation body is an independent
non-governmental organization, the Press Council, established jointly by
all the associations of journalists in BiH. The Press Council tries to
resolve any disputes between the readers/the public and the press using
only the journalistic tools available: right to a response, publication
of correction, apology and rebuttal. The Council has no power to
sanction, issue or revoke licenses, or fine newspapers and magazines.
So, the government has no legal mechanisms of direct influence over
editorial policies of the press.

##### 1b. Commercial RTV sector and the Communications Regulatory Agency  {#b.-commercial-rtv-sector-and-the-communications-regulatory-agency .Appendix-subheader-3 .unnumbered}

As for electronic media, and in compliance with the practice of western
democracies, regulation rests with the Communications Regulatory Agency
(CRA). The Law on Communications regulates the communications sector in
the country and establishes the CRA as a functionally independent,
non-profit agency regulating the RTV sector, public telecommunications
networks and licensing, and defining basic conditions of operation of
joint and international communications structures. CRA is responsible
for planning, coordination, allocation and assignment of the spectrum of
radio frequencies. In essence, this means that the legal independence of
the Agency guarantees also the independence of electronic media from
government interference.

##### 1c. Public broadcasters  {#c.-public-broadcasters .Appendix-subheader-3 .unnumbered}

There is a public broadcasting system, made up of three broadcasters:
BiH Public Broadcasting Service (hereinafter: BHRT) covering the level
of the state; Public Broadcasting Service of the Federation BiH (RTFBiH)
at the level of the Federation BiH; and Public Broadcasting Service of
Republika Srpska (RTRS) at the level of Republika Srpska. Public
broadcasters are funded by the RTV subscription fee (TV set ownership
tax), advertising and sponsorship. Editorial independence from
government is further guaranteed by the fact that public broadcasters
may not receive any state subsidies for regular programming and
production. Finally, as public broadcasters are also subject to the
rules of CRA, independence of public broadcasters is conditioned by the
independence of CRA.

2\. Positive and negative indicators of media development

In the past ten years, the media in BiH have gone through a difficult
period of post-war reconstruction, which entailed an expansion of the
media sector, adoption of a series of laws relating to the media,
establishment of regulatory and self-regulatory bodies, and development
of the media market. The overall process has been marked and, to a large
extent, determined by continuous efforts of political elites to maintain
control over key media, particularly public ones, as well as constant
efforts of international players (especially the High Representative,
the European commission, USAID, as well as many others) to prevent the
establishment of political control over the media, to assist the
development of independent media, and to establish a functional legal
framework for activities and development of the media sector. Such a
polarized arena\--with political elites on one side, and the
international community on the other\--leads to constant conflicts,
delays in reforms, as well as hindrance in the implementation of laws
which have been adopted, or rather, imposed by the international
community and the Office of the High Representative. For example, until
October 2005 and the adoption of the Law on the BiH Public Broadcasting
System, in the past ten years the BiH authorities had not adopted a
single law related to public broadcasting service at state or entity
levels. All the decisions on these laws were imposed by the High
Representative.

##### 2a. Positive indicators  {#a.-positive-indicators .Appendix-subheader-3 .unnumbered}

Today, there is a plethora of media outlets in BiH, particularly as
compared with a relatively small population of some four million.
Namely, according to information from the CRA public register of the
media, in 2005 there were 42 television and 146 radio stations. Of
these, 104 are private -23 TV and 81 radio channels. The situation is
similar with print media, with seven daily newspapers and almost 50
weekly and bi-weekly publications, published on regular basis.

According to information available in relation to ownership over key
media, at the moment BiH has no cases of serious media concentration
which may represent any threat to fair and open market competition. The
Avaz publishing company can be said to have gone further than any other
in establishing a strong vertical ownership structure, as it includes
the leading daily paper, the largest printing house, and the strongest
distribution system, including several special publications such as
Azra, Sport and Express. Still, all this does not put Avaz in a
monopolistic situation in print media, particularly in view of the
versatility and number of print media in the country.

The situation with Zeljko Kopanja in Banja Luka is similar, as he owns a
printing house, Nezavisne novine daily, and the NES radio station.
Again, even here one cannot speak of indications of monopolization, but
rather about skillfully associated elements of media industry, which
secure a clearer future of this company in a different situation.
Moreover, reports on the ratings of electronic and print media in BiH do
not indicate that any single media outlet dominates the market.

According to the report on self-sustainability of the media sector in
BiH, published in 2005 by IREX, this is the data on circulation of
newspapers in BiH (from no less than once a week, to daily): Dnevni avaz
40.2%, Vecernje novosti (from Serbia) 11.9%, Oslobodjenje 9.8%, Vecernji
list (from Croatia) 9.3%, Blic (from Serbia) 8.0%, Glas srpski 7.8%,
Nezavisne novine 7.7%. The same report cites the following data on
circulation of magazines: Glorija (from Croatia) 16.1%, Azra 12.3%,
Express 9.2%, Slobodna Bosna 9.1%, Dani 8.1%.

The media market can be said to be entering the consolidation stage,
which will lead to a decrease in the total number of media outlets, and
the creation of several powerful players in the field. Major
international media corporations have shown limited interest in
investing in the BiH media sector due to: administrative barriers;
uncertain legal environment for businesses, oversaturation in the media
sector, and a limited advertising market. The two major exceptions thus
far are the Slovenian Kmecka druzba, which bought a considerable stake
in the Oslobodjenje daily, and the arrival of TV Pink from Serbia and
Nova TV from Croatia through local station OBN.

##### 2b. Negative indicators  {#b.-negative-indicators .Appendix-subheader-3 .unnumbered}

BiH is obliged to implement the Competition Law, as required by the
Stabilization and Association Agreement (SAA) with the European Union.
However, ineffective and complicated administrative structures have
prevented the implementation of the Competition Law and the
establishment of the Competition Council, so that even today more than
three years after the adoption of the Law, the Competition Council has
not become truly operational. An additional problem is the lack of
ownership transparency of companies in general. Namely, there is no
central register of print media, nor a central register of commercial
companies, either in the Federation BiH or in BiH as a whole, thus no
real transparency of ownership over the media.

In addition to public broadcasters\--BHRT, RTFBiH and RTRS\--there are
also 74 TV and radio stations under state ownership, at municipal and
cantonal levels across BiH. These remain largely dependent on municipal
and cantonal government budget financing. Although the privatization of
these broadcasters was supposed to commence in 2002, there has been no
major advancement in this area. This remains an issue affecting the
future independence of radio and TV stations from the ruling structures.

The key pillar of the overall independence of public broadcasters is
their financial independence. However, public broadcasters face enormous
difficulties in the collection of the compulsory monthly RTV fee, which
puts them in a particularly difficult financial situation. Namely,
compared with the pre-war rate of collection of the RTV fee of some 80
to 85%, according to unofficial estimates, in 2003 it was between 20 and
30%. After the introduction of a new system of collection through
fixed-line telephone bills in 2004, the level of collection of the fee
grew across BiH to 53 percent in 2005. Although the new system of
collection is more effective, it has not delivered ideal results and it
has often been used as a tool for pressuring public broadcasters. There
is an almost systematic, politically motivated boycott of the fee,
practiced by a considerable number of Croats in BiH. The leading Croat
political parties in BiH demand a different model of public
broadcasters, with separate ethnic channels for each of the three
constituent peoples. Thus the level of collection depends on which
telecom collects it in which part of the country.

II\. IMPORTANT HIGHLIGHTS

Despite significant levels of international assistance to BiH media,
commercial media continue to suffer from poor professionalism and weak
ethical standards. Moreover, media outlets in BiH are still struggling
to become financially self-sustaining. One particularly disturbing
downward trend is that reporting seems to be taking on more of a
nationalistic tone.

The development of the Communications Regulatory Agency (CRA) as a
transparent and balanced authority in the field of broadcast regulation
is generally considered a success. The CRA has been praised for setting
standards of journalistic conduct at radio and television stations,
although some believe that the imposition of a code of conduct (and
associated penalties for violations of the code) may have led editors to
limit the investigative risks journalists take in broadcast newsrooms.
Nevertheless, there is room for the CRA to grow. Sanctions levied on
outlets that violate CRA rules and guidelines remain low so that fines
do not jeopardize the financial stability of stations and individuals.
As a result, some outlets tend to accept the cost of potential sanctions
as part of doing business.

The Press Council is at a critical stage in its attempt to establish a
self-regulatory regime for the print sector. While internal steps are
being taken to set the Council's new business strategy in place, much
will rely upon the ability of the Press Council to build credibility
among the largest players on the print media scene. Implementation and
review of the Council statute---particularly in regard to membership in
Council bodies and potential conflict of interest---are the next
challenges for Council leadership.

Media-related associations may represent the best and worst in Bosnia's
media sector development. The United Media Industry (UMI) has brought
together leading nationwide television stations with major advertising
agencies to make a substantial collective investment in the purchase of
quality audience research that will improve each member's ability to
make management decisions regarding programming, advertising sales, and
marketing. On the other hand, the recently unified journalists'
association (BH Novinari) struggles with implementation of a business
plan after dealing with the theft of member pension contributions by a
former employee. The Association of Electronic Media is led by a dynamic
individual but has no supporting organizational structure, business
plan, or a functioning system to collect member dues.

The broadcast media sector has shown considerable progress over the past
three years, with leaders emerging in both radio and television that
prove success comes from implementation of proven, modern media
management strategies. Bosnia-wide television outlets are on the
forefront, marked by their decisions to purchase quality audience
research through UMI and to use this data in the process of making
programming, scheduling, sales, and marketing decisions. Radio stations,
such as Radio Stari Grad and Radio Kameleon, employ style guides,
detailed business plans and advanced branding and marketing techniques.
Obstacles still exist. Television stations are reluctant to use their
own funds to commission quality domestic productions and Bosnian
production houses are forced to seek commercial sponsors to cover the
total cost of making any new programs that would be offered to broadcast
outlets. The radio market remains over-saturated, with more than 60
stations funded through cantonal or municipal budgets, and other
stations shored up by finances from political or personal interests. No
market correction is likely to take place as long as these artificial
support structures continue to play significant ownership roles at
scores of radio stations.

In contrast to the advances in the electronic sector, print media may
have made the least progress over the past few years. The opinion
remains that the overall quality of journalism in BiH is still poor.
Financial viability is a struggle at many print media outlets and
circulation rates are low. Pressure on print media now takes the form of
economic coercion, where firms (and their political or religious support
structures) threaten to pull advertising accounts if newspapers or
magazines publish unfavorable articles - or fail to print articles
favorable to advertisers.

The low quality of journalism is also a direct result of a corresponding
lack of quality university-level journalism programs. Students receive
an outdated and theoretical education that is of little use when
actually working at media outlets. Practical training is best sought
through domestic media development organizations such as Media Plan
Institute and the Media Centar Sarajevo, where students and practicing
reporters can improve basic professional skills and develop more
advanced competencies in investigative journalism or issue-based
reporting.

In spite of the many challenges still to face within the BiH media
environment, international donor interest understandably wanes after 10
years and more than \$100 million. The European Commission will focus on
specialized technical assistance and projects that support the
Communications Regulatory Agency. Other traditional media donors, such
as the Swedish Helsinki Committee and the Open Society Fund-BiH (and the
Open Society Institute Network Media Program), will have a more targeted
approach to allocating decreasing funds that includes association
development and media-related research.

III\. U.S. GOVERNMENT ASSISTANCE

The U.S. Government, through the U.S. Agency for International
Development (USAID), has allocated over \$38 million since 1996 to
support independent broadcast and print media in Bosnia-Herzegovina. The
goal of USAID assistance is to create a self-sustaining, independent
media in BiH, which is free of political influence and provides citizens
with easy access to objective information to make informed social and
political choices.

Strengthening the Independent Media (SIM) project, implemented by
Chemonics International started in October 2003 with main goal to help
media outlets provide useful information to citizens as a basis for
making informed judgments and to identify areas where public pressure
can be usefully applied. This activity supports the development of
independent, objective, private media in BiH through training and
technical assistance in newsroom management, business development,
independent domestic production, and legal, regulatory and policy
issues. The project is scheduled to end in December 2006.

USG assistance to media outlets in BiH blends elements of four
components. Journalism training and assistance aims to improve content
and build readership/audience, enabling stations and publications to
increase advertising and sales revenues. Production assistance builds
skills and enables partners to create polished productions on topics
that help citizens become better informed or more socially sensitive.
Legal and regulatory work helps outlets level the economic playing field
while fostering more ethical and balanced coverage. An important part of
Strengthening the Independent Media (SIM) project was to work closely
with a Bosnian NGO partner and gradually transfer activities to this
partner over the life of the project. Because of their relevant past
performance, trained staff, and high-quality broadcast production
facilities, the project selected [Media Centar Sarajevo]{.underline}
(MCS) as the Bosnian NGO best qualified to be the project partner. The
MCS is currently both an implementer of USAID Media program activities
and a recipient of USAID support and technical assistance through its
subcontractor relationship with Chemonics International. In programmatic
areas, the MCS has been effective as a delivery mechanism for selected
USAID Media training initiatives. MCS coordinated the USAID-financed
pre-election project. Working in conjunction with USAID Media staff, the
MCS managed the activities of twenty Bosnian media outlets that
participated in the creation of election-oriented programs throughout
the country.

A project implemented by the New York University (NYU) and its
subcontractor Journalism Development Group (JDG) focuses on the creation
of a permanent local organization called the Center for Investigative
Journalism. This organization is dedicated to the practice of
investigative reporting by local reporters that meets the highest
international standards. The center\'s mission is to train reporters and
editors, and help set Bosnia\'s news agenda by breaking critical stories
that no news organization will be able to ignore. This project is
implemented under the 3-year, \$1.7 million grant with NYU.

**SECTOR POLICY BRIEF:**

**CIVIL SOCIETY IN BOSNIA AND HERZEGOVINA**

**December 2006**

This policy brief provides background on the current state of civil
society and non-governmental organizations (NGOs), and development
challenges that Bosnian civil society is to face in the future. The
paper is to assist the Democracy and Governance Assessment team to gain
understanding of the strengths and weaknesses of the NGO sector in
Bosnia and Herzegovina (BiH), together with other actors of civil
society.

I. BACKGROUND

Civil society is a difficult term to define because it carries a wide
set of values. USAID-BiH civil society programs align with a broad
definition of civil society that allows for diverse interests and
activities:

> *"That space between individual and the state where citizens*
>
> *associate according to their own wishes, values, and
> interests*[^6]*."*

In other words, civil society is a sphere of citizens' life outside of
their homes and between the state and economy. Therefore, this term
encompasses any kind of organized social life of an individual that is
voluntary, self-generating, and independent from the government but also
bound by some shared norms of interaction. This associational realm can
be either *formal*, as in the case of non-governmental organizations
(NGOs), [or]{.underline} *informal*, for example citizens' groups. As
Thomas Carothers notes, " . . . it is a mistake to equate civil society
\[only\] with NGOs. Properly understood, civil society is a broader
concept, encompassing all the organizations and associations that exist
outside of the state and the market.[^7]"

In BiH, the NGO sector is accepted as an engine and, in some cases, a
proxy for civil society since the Dayton Peace Agreement. The
development of civil society in BiH has been greatly influenced by a
complex and unique political and economic environment comprising
internal divisions, policies driven purely by party politics or
ethnicity, and intensive international involvement that sometimes
diminished and discouraged local initiatives.

 According to the 2006 USAID NGO Sustainability Index[^8] the BiH NGO
sector continues to build upon and improve its overall sustainability
every year. The improvements are the result of the increased
effectiveness of NGOs, particularly increased public exposure and
activism, and recognition, legitimacy and cooperation with the
government. High scores for the Advocacy and Public Image dimensions are
reflected in the improvement in the Organizational Capacity and
Infrastructure dimensions where local constituency building and
increased networking and cooperation between NGOs are significant
components. The Legal Environment in which NGOs operate has not been
improved for many years, although there have been some changes. The full
effects of these changes, and the direction these will take, are not yet
evident. The Financial Viability dimension remains the most tenuous, but
there is evidence of improvement resulting from further consolidation of
NGO activities.

Despite these improvements, the sector continues to face many
challenges. NGOs continue to depend heavily on the international donor
community. Some NGOs have begun to effectively diversify their funding
sources in order to counteract the withdrawal of international donor
funding and to prepare for access to EU pre-accession funds, others are
less likely to make this transition. There is already evidence of a
decrease of NGO sector size and activity, and there is likely to be a
further marked decrease in the NGO sector. Cooperation between NGOs and
the business community continues to be minimal.

Approximately 7000 local associations, foundations, and organizations
are registered in BiH. Of those, one-half are active. Only 229
organizations and associations are registered at the state level, while
others are registered only at the entity or local level.

II\. DEVELOPMENT CHALLENGES

There are several challenges that BiH NGO Sector and civil society need
to address in the next period in order to ensure financial and
organizational sustainability of the Sector as well as to increase civic
activism and participation in decision making processes.

1\. Role of the High Representative

Established to ensure implementation of the civilian aspects of the
Dayton Peace Agreement, the Office of the High Representative (OHR) is
the most powerful political actor in BiH. Ten years on, OHR's overriding
objective is to ensure that BiH is a peaceful, viable state on course to
European integration. During this period, OHR (and the international
community more generally) have played the major role in holding
government to account, which has probably had the effect of "squeezing
out" civil society. In addition, OHR has not adequately consulted or
involved civil society. The main challenge for entire civil society in
2007, as OHR announced its close out, is how to effectively replace OHR
in holding government accountable and monitoring their work.

-   Over the last few years, NGOs have strengthened their policy
    analysis and formation capacity to be utilized both within civil
    society and in government. Some of the policy research organizations
    have created good relationships and built credibility within the
    government structures. However, this needs to be further developed,
    so that the government gets accustomed to using the policy research
    and evidence based research for their policy decision making.

-   Civil society needs to assume a greater advocacy and watchdog role
    with respect to the implementation of new policies and legislation
    advancing reform.

-   NGOs need to move away from their general approach and move toward
    greater issue orientation and interest representation to effectively
    pressure the government.

2\. Legal and Fiscal Environment

Bosnia has three governing bodies, the State, the Federation and the
Republic of Srpska (RS). While each law established a reasonably
progressive legal framework for NGOs, many challenges remain.

-   NGO registration on State level is still inconsistent due to the
    absence of written instructions and documented procedures for the
    implementation of the law. Registration officers continue to abuse
    their authority and very often deny applications for reasons such as
    the applications were submitted at an inconvenient time.

-   There is no unified registrar of NGOs that would provide information
    on all registered NGOs in whole BiH.

-   The taxation of NGOs, fundamental to the sustainability of the
    sector, remains unsettled. It is necessary to develop tax policies
    to encourage NGOs to engage in economic activities, to provide
    appropriate incentives for donor giving, and to provide preferential
    tax treatment to public benefit organizations.

-   The public financing of NGOs, also critical to NGO sustainability,
    and an important mechanism for partnership, lacks clarity,
    predictability, and transparency. Enabling and transparent
    mechanisms for public financing -- in addition to tax reforms -- are
    badly needed at all levels of government, especially the higher
    levels (cantons, entities, and state).

-   The capacity of lawyers working with NGO resource centers to provide
    legal support to NGOs, and the capacity of registration officials
    (especially at the State level) to implement the respective laws,
    remains weak.

-   The VAT Law came into force on January 1, 2006 and its impact on the
    NGO sector still remains to be seen. Overall, NGOs see this as
    another burden on their already weak financial sustainability.

3\. NGO Coordination and Networking

In the past, the NGO coordination issue was the main focus of the
international community. There were numerous attempts to create a
coordination body for local NGOs. These attempts did not bring any
tangible and/or sustainable results, as the process was driven by
internationals, rather then by local NGOs. In 1996, the international
community created a [NGO Council]{.underline} -- a coordinating body for
international and local NGOs. Although the NGO Council is providing
professional services to its selected members, it is still perceived as
a "donors" and "Sarajevo" forum rather than a "policy" and "BiH" forum.
Also, the sustainability of the Council is questionable in terms of
inadequate domestic ownership from the outset, differing opinions about
the future aims and orientation of the body, an unstable financial base,
and limited external recognition of - and confidence in - the
organization.

In 2005, a new NGO Resource Center[^9] was created by the [Center for
Civil Society Promotion]{.underline} and throughout 2006 it has become
increasingly active. Its long-term effects are still to be seen.
Although it received funds from USAID and EC, the Resource Center is
fully run by the local NGO. It maintains an electronic database of local
NGOs in BiH, provides legal and financial management services, training,
facilitates information sharing, and offers a library of materials for
NGOs. The main objective of the Resource Center is to craft strategies
and programs to develop and regulate the sector, to introduce
institutional mechanisms to provide for public-private partnerships, and
to serve as an intermediary support organization. Located in Sarajevo,
this is the only local resource center and it is still in the early
development phase in terms of membership base and fundraising. Last
year, the Resource Center and its network drafted a series of strategic
documents and sent it to the Council of Ministers for further discussion
and finally for adoption. All the documents are to streamline the
cooperation between the NGOs and government. These include: 1.Agreement
between the Council of Ministers of BiH and the NGO Sector; 2. Agreement
between Local authorities and NGO sector; 3. Quality standards of
cooperation between the Government and NGO Sector in BiH; 4. Development
Strategy of NGO Sector in BiH; and 5. Code of conduct for the NGO Sector
in BiH.

Poor networking among NGOs in the past has led to a situation where too
many organizations are recreating the wheel. As a result, "there are
lots of wheels, but no cars." This situation is also preventing NGOs
from effectively accessing information, transferring knowledge,
leveraging resources, maximizing results, and elevating the status and
clout of the sector. At the same time, there are a number of networks
representing key sub-sectors, e.g. women, youth, and various health
concerns. While some of these are relatively new, others have existed
for quite some time.

The largest and the most recent network that grew up in movement was the
one initiated by the Center for Civil Society Promotion as a
pre-election civic movement called [GROZD]{.underline} -- Civic
Organizing for Democracy[^10]. It gathered around 400 different NGOs and
gained a half a million of citizens' signatures through a petition
addressed towards the political candidates in the frame of Civic
Platform with clear 12 expectations. This movement was financially
supported by USAID Bosnia and Open Society Fund and it was the largest
NGO networking effort ever done in BiH. Their future effects are to be
seen.

4\. NGO- government cooperation

The most dynamic NGO-government relations are at the municipal level.
However, there is no effective mechanism for transferring knowledge from
more to less experienced municipalities and encouraging the replication
of successful models for NGO-government cooperation.

The cooperation with the other levels of the government is less dynamic
due to the fact that state government is a highly decentralized body
with limited specific competence. There is no formal policy or framework
that provides for NGO-Government cooperation at the state level.
Effective mechanisms for public-private partnership are limited. With
respect to civil society, in particular, there is no office, department,
or staff member responsible for liaison with NGOs. In addition, the
state government has limited revenues by which it could provide public
financing to NGOs.

There is a lack of political will within state government to pursue
improved relations with the third sector. The latest example for the
government unwillingness to improve the cooperation with NGOs is related
to the initiative of the NGO Resource Center. The Council of Ministers
has still not responded to the NGO Resource center on the documents
received a year and a half ago (mentioned in section 3 above). Until the
new government is formed, these documents will remain untouched.

5\. Capacity and Professionalism of the Sector

A significantly smaller number of registered and active NGOs could be
described as professional organizations. Civil society in BiH is quite
diverse in terms of the level of organizational capacity. Nonetheless, a
critical mass of professional NGOs is perceived to exist. Many of these
have been operational for some time, tend to be based in urban centers,
and have benefited from investments in capacity building. These
organizations have reached a higher stage of development relative to
newer organizations, those based in rural and remote communities, and/or
informal groups. The urban-rural divide is still a development
challenge, whether in terms of the sector or grassroots democracy.

More professional NGOs have built their skills that include strategic
planning, proposal writing and budgeting, organizational management and
governance, financial management, project management, human resources
and volunteer management, service provision, advocacy,
coalition-building, media relations, fundraising, and monitoring and
evaluation. They demonstrate higher levels of confidence and a greater
degree of sophistication in assessing their own strengths and
weaknesses. However, continued professional development or advanced
training is critical to the further development of their organizations.
These include organizational and financial management, volunteer
mobilization, issues of fundraising and philanthropy, public relations,
policy analysis and formulation, and monitoring and evaluation.

In anticipation of reduced levels of support by the international
community in the coming years, NGO leaders will need skills to manage
change effectively including the development of strategies and
partnerships to ensure sustained activity. As NGOs begin to diversify
their funding base, financial management is becoming increasingly
complicated and requires a greater degree of sophistication. And, as a
handful of these NGOs begin to receive direct funding from major foreign
donors, issues of contractual and regulatory compliance are coming into
focus in a way that was not the case when an international intermediary
organization was involved. As for the NGOs and informal groups beyond
this elite, and particularly those working in small towns and rural
communities, their capacity building needs are greater and much more
basic.

One category of civil society organization that appeared to be largely
overlooked by institutional capacity building efforts was foundations.
This group requires training in strategic planning, financial
management, particularly managing funds from multiple donors, monitoring
and evaluation systems, and fundraising and public relations strategies
may be needed in some cases.

Within civil society, some key issue-based organizations still exhibited
limited organizational capacity, i.e. labor unions, political parties
and business associations. This low level of development adversely
affects their ability to act as change agents.

6\. Public Image of the Sector

There appeared to be a healthy degree of self-assessment among NGOs as
to why there was not more and better coverage of the sector in the mass
media. There is an obvious need for improvement in better articulation
of mission, issues, and results; greater responsiveness to the needs of
journalists, e.g. in terms of newsworthiness and deadlines, and; a more
proactive approach to -- and sustained engagement of - the media. A few
NGOs have proved very successful in establishing relationships with the
media.

The GROZD initiative produced and attracted a great deal of media
interest and coverage in the pre-election period. The NGO sector now
needs to take advantage of this 'catalyst' and continue to seek out and
develop interesting ways to maintain and succor media interest. There is
some concern that the GROZD initiative may have distorted the picture of
the overall sector and, although there was a strong public relations and
awareness raising component, it is not clear to what degree the media
and public has received and understood the message.

NGOs need to further develop their public relations skills and the
ability to relay their missions, and express ideas clearly. Without
improved effectiveness in this area, the increased publicity may not
necessarily translate into improved public image.

7\. Financial Viability of the Sector

Besides difficult economic conditions in BiH other factors are
presenting greater challenges to financial sustainability. First and
foremost are issues pertaining to tax policy. There is a problematic
lack of incentives for philanthropic giving, especially by businesses.
While there is little information on business attitudes in BiH, a
limited study by ICVA of several leading businesses found that they
would be more inclined to support NGOs if tax incentives were
introduced.[^11] The failure to distinguish between the status of
private businesses and public benefit organizations is placing an undue
tax burden on NGOs. With respect to income generation, enterprising NGOs
that engaged in such activities are hardly surviving due to their tax
obligations. Income generation by NGOs is allowed under new legislation
at the state and entity levels. The issue of related tax liabilities at
the state level is unclear. At the entity level, it is perceived to be
sufficiently burdensome to act as a disincentive. As for public opinion
on the matter, polling conducted by the OSCE suggests that support does
exist for tax benefits for NGOs.[^12]

The second major point of discussion was limited public awareness
about - and positive image of - the NGO sector and the impact this has
on the ability of NGOs to raise money or in-kind contributions and to
mobilize volunteers. The challenge for NGOs is that until citizens, the
business community, and public institutions clearly understand the role
of NGOs and can see the tangible results of their work, it will be
extremely difficult to cultivate domestic resources. In terms of
investment by businesses, the ability of NGOs to demonstrate public
relations value is crucial. Businesses were more likely to sponsor a
person or family 'in need' or a sports club than an NGO because the
level of recognition they received was considerably higher.

In March 2003, the Office of the High representative took action to halt
inappropriate use of public funds by state owned or controlled
enterprises. Specifically, a law was passed restricting donations by
state owned or controlled enterprises in both entities. Gifts by such
enterprises can be made only for sports, cultural, social welfare, and
humanitarian purposes and are subject to a number of procedural
restrictions.

Many companies are starting to develop corporate social responsibility
strategies. The NGO Foundation Mozaik initiative to award socially
responsible corporations was launched in November 2005 and the first
awards will be given for 2006. NGOs are becoming increasingly aware of
the general principles of corporate philanthropy, but still do not apply
the pressure necessary to increase corporate philanthropy.

The more diversified the funding, the more confident NGOs appeared to be
in terms of their financial viability. Despite the diversification of
international and domestic funding, scholars and practitioners agree,
however, that NGOs in BiH are still heavily dependent upon foreign
donors. According to research conducted by the Civil Society Promotion
Center, domestic NGOs have generated nearly 77% of their funding from
foreign sources in recent years. Findings from the Civil Society
assessment in 2004 show that a majority of NGOs interviewed received
anywhere from 70% to 100% of their funds from foreign sources. A few
indicated that the overall percentage of their expenses covered by
foreign sources was below 30%. Only four claimed that they were
operating with no funding from the international community.

8\. Volunteerism

At present, BiH lacks legislation governing the rights and obligations
of volunteers and the legal entities hosting them. There is also no
clear legal definition of 'volunteer.' As such, volunteers in BiH are
operating in a legal vacuum.[^13] According to ICNL, "NGOs may not
conclude contracts with volunteers without the fear that the state
inspectorate might treat the volunteer as an employee and find the NGO
in violation of the labor law." Among other challenges, there is a lack
of voluntary culture in BiH, poor economic and living conditions among
many citizens that make it difficult for them to focus beyond their most
immediate needs, limited public awareness and positive impressions of
NGOs, and insufficient NGO 'roots' within communities. Volunteer
mobilization is the most critical area for the further development and
sustainability of NGOs.

While it may be difficult to mobilize volunteers in BiH, it is not
impossible. Research on volunteerism, carried out by ICVA in 2002 found
that 55% of the 70 NGOs it interviewed had volunteers. Of these, 61% had
10 or fewer volunteers, while 16% boasted more than 30.[^14] Increases
in volunteerism in BiH are credited, in part, to training and awareness
raising efforts by NGO networks.[^15]

9\. Provision of Social Services

Up until recently, the public and government correlated NGOs strictly
with the provision of humanitarian services. Today, the range of goods
and services that NGOs provide is growing and these service-provision
NGOs are becoming more recognized by local governments and governmental
institutions. Some governments have outsourced services to NGOs,
although, in most cases, grants appear to be the funding mechanism of
choice rather than service contracts. Capacities for transparent and
professional grant-making/service procurement appeared to vary widely.
The lack of quality assurance standards and tools within the sector was
deemed to be problematic on a number of fronts. First, inconsistent
service provision by the sector and incompetence by individual NGOs
undermines the image of the sector. Second, at this nascent stage of
cooperation, it is difficult for NGOs to authoritatively present their
performance capabilities and professional standards to governments and
others seeking to procure services.

NGO Resource center has developed and proposed the quality standards for
service provision in order to improve the cooperation between the
Government and NGO Sector in BiH. However, this is still being reviewed
by the government together with the other documents from the package
addressed to the BiH Council of Ministers.

10\. Issue Advocacy

So far, nearly all advocacy successes had some form of foreign
involvement, whether in terms of funding, facilitated dialogues,
assistance with policy analysis, or other technical assistance.
Understanding and applying issue advocacy is complicated by a range of
factors, whether the power of OHR to enact legislation and provisions by
decree, lingering communist mentalities within government and beyond, or
NGOs aversion to politics. The government acknowledges NGOs primarily as
social service providers rather than advocates or watchdogs. Within
civil society, many NGOs have yet to fully appreciate or embrace this
role. Or, even if they do, some fail to understand advocacy as a
*process* that involves education and mobilization of the public, not
just a dialogue between elites in civil society and government.

While conceding many of these shortcomings and challenges, domestic NGO
advocacy campaigns, and public-private partnerships are occurring and
are producing results at various levels of government and on a diverse
set of issues. Issue-based coalitions are in existence and have proven
effective in addressing the interests of women, youth, and persons with
disabilities, debilitating illnesses, special needs, and suffering from
addiction. The engagement of different NGOs in issue-based coalitions on
similar issues at a regional level provides a foundation upon which to
build coordinated initiatives at higher levels of government in the
future. NGO capacity in this area has only recently been developed and
as experience is accumulated and confidence built, bigger initiatives
are likely to follow.[^16] Finally, the prominence and success of some
initiatives, e.g. the direct election of mayors campaign, is helping not
only to build public awareness but also to open the doors for greater
dialogue between NGOs and government on policy issues.

In order to further develop advocacy capabilities, it is needed to place
greater emphasis on building policy analysis capabilities within civil
society and links need to be created between policy research
organizations and action-oriented groups working. This is one of the
first challenges that GROZD plans to address after the election results
are implemented and the new government is formed.

11\. Involvement in policy development

Since 2003, there has been a substantial progress in the policy
development process in Bosnia and Herzegovina. Factual evidence and
analysis are playing a greater role and policy research organizations
(PROs) have been a major provider of this information. The evidence
indicates that PROs have been successful in convincing the policy
community that they are purveyors of objective, disinterested advice and
analysis, and in this they appear to have distinguished themselves from
advocacy NGOs.

There is no question that the quality of local analysis *and* its
targeting on the most important issues improved. This improvement was
certainly produced in part by the substantial capacity building efforts
of the USAID/Urban Institute/Policy Development Project. We do not have
the ability to causally link the stronger research and communications by
local organizations fostered by the PRO Project with the changed
attitudes by decision makers towards the use of evidence and analysis in
the policy process. But the coincidence is clear.

According to the Urban Institute's policy paper evaluation report[^17]
the policymakers who were interviewed thought that objective information
is becoming more important in policy decision making. They cited two
principal reasons: the application process for joining the EU demanded
more concrete information and evidence, and the public is becoming more
knowledgeable about key issues so that politicians will have to become
better informed to be credible. They also noted that locally generated
analyses would have to increase to fill the void left by the decreasing
role of the international community. In short, the prospects in Bosnia
for PRO development appear quite positive.

12\. NGOs and Political Parties

There is a lack of cooperation between political parties and other
actors in civil society for the purposes of advancing an issue agenda
and specific policy reforms. Most NGO leaders are opposed to
'compromising their morals' or 'tarnishing the image' of their
organization or the sector through association with political parties.
Partially this problem stemmed from the fact that the word for
'politics' and 'policy' in the Bosnian language is exactly the same.
Clearly, an aversion to politics among NGOs is hindering their
meaningful entrance into the policy arena.

NGOs also fear that cooperation might lead to cooption of NGOs by
political parties. Stronger NGOs appeared less worried about such an
outcome and more willing to engage political parties to advance their
causes. In 2004, CCI's successful lobbying of - and cooperation with -
political parties contributed to the passage of constitutional
amendments and new legislation providing for the direct election of
mayors in FBiH. In addition, a 'youth to youth' and 'women to women'
approach to cooperation between NGO networks and clubs within political
party structures (as well as factions within elected bodies) was
highlighted as producing tangible, positive results.

In 2006, before the latest general elections, all of GROZD's activities
were directed toward political parties, inviting political parties for
cooperation to achieve 12 points from the Civic Platform. Thirty six
political parties signed the Platform and therefore agreed to follow
through these issues after (or if) they get elected to power. They have
agreed to the fact that GROZD will monitor the work of the future
government and act as a watch-dog organization by informing the public
and achievements or failures of the government to fulfill the
expectations from the platform. This is the first time that NGOs clearly
stepped into the political arena and initiated direct relations with
political parties.

**SECTOR POLICY BRIEF:**

**LEGISLATIVE STRENGTHENING IN BOSNIA AND HERZEGOVINA**

**December 2006**

I. BACKGROUND

The Parliamentary Assembly is the lawmaking body at the state level in
Bosnia and Herzegovina (BiH). It consists of two houses: the House of
Peoples and the House of Representatives. The House of Representatives
has 42 deputies, of whom 28 are directly elected from the Federation and
14 directly elected from the Republika Srpska National Assembly for a
four-year term. The House of Peoples has fifteen deputies, of whom ten
(5 Croat and 5 Bosniaks) are selected by the Federation Parliament and
five by the Republika Srpska National Assembly.

The Parliamentary Assembly is tasked with enacting legislation, which is
necessary to implement the Presidency's decisions or to carry out the
Assembly's responsibilities; determining and approving the revenue
sources and budget amounts for the operations of BiH's state
institutions; and deciding whether to ratify international treaties.

In addition to the Parliamentary Assembly, there is the Republika Srpska
National Assembly ("RSNA") and the Parliament of the Federation of
Bosnia-Herzegovina ("Federation Parliament"). The bicameral Federation
Parliament has a 98-member House of Representatives, which is directly
elected for a four-year term, and a 58-member House of Peoples,
consisting of 17 Serb, 17 Bosniak, 17 Croat and seven "other" deputies,
who are elected by the cantonal assemblies. The Federation Parliament
elects a President and two Vice-Presidents, comprising of one Bosniak,
one Croat and one Serb.

The RSNA has 83 deputies, who are directly elected for a four-year term.
RSNA also elects a President and two Vice-Presidents, consisting of one
Bosniak, one Croat and one Serb, for a four-year term. Also, there is
the Council of People, which has 28 delegates (8 Serbs, 8 Croats, 8
Bosniaks, and 4 national minorities). The Council of People is charged
with reviewing RSNA's decisions and determining whether the legislation
adopted by the RSNA violates the national interest of constitutionally
recognized people.

Overall, the BiH Parliaments are relatively weak institutions, suffering
from a lack of human and material resources. Furthermore, the BiH
Parliaments are marginalized by the executive branch of government,
which controls legislative agendas and allow minimal parliamentary
participation in governing and policy-making processes.

USAID/BiH has provided minimal support to the BiH Parliaments over the
past few years. Assistance to the BiH Parliaments has been primarily
through a larger political party program carried out by the National
Democratic Institute ("NDI"). NDI works with the BiH Parliaments to
support the professional development and efficiency of caucuses and
committees. NDI has also assisted BiH Parliaments in becoming more
transparent and professional insitutions by developing official
websites, updating the Rules of Procedure and commenting on Codes of
Conduct.

While USAID's parliamentary strengthening programs implemented by NDI
have been well-received and resulted in some noteworthy achievements,
this work has not been broad and deep enough to make serious
improvements to the overall institutional capacity of BiH Parliaments.
In late 2005, USAID started a two-year legislative strengthening program
implemented by OSCE to strengthen the institutional capacity of the
Parliamentary Assembly of BiH while increasing public participation in
the legislative process.

II\. PROBLEM STATEMENT

BiH Parliaments face a number of challenges. First, BiH Parliaments do
not possess the necessary autonomy, authority, and capacity they need to
represent the will of BiH citizens, make laws, and provide oversight on
the other two branches of government. Most of the legislative
responsibilities are either carried out or heavily influenced by the
Office of the High Representative ("OHR"). Due to parliamentarians'
minor role in government, they tend to be relatively inactive and
uninformed about key policy issues. Additionally, many parliamentarians
lack a true understanding of their roles and responsibilities as
legislators. Parliamentarians must be prepared to carry out their full
responsibilities once the OHR closes as planned in summer 2007.

Second, BiH Parliaments suffer from structural constraints and weak
support services, which impede efforts to strengthen the role and
authority of BiH Parliaments. For instance, the Parliaments suffer from
an insufficient numbers of MPs to adequately conduct legislative
functions, a diffuse leadership created by multiple chairs, a lack of
professionally trained staff, limited access to policy expertise, and
inadequate resources and facilities.

Third, citizens are not engaged in the legislative process and there is
a disconnect between the public and the Parliaments. There is little
public support for, participation in, and understanding of parliament
and the legislative process. Interaction and communications between MPs
and citizens is infrequent and few resources are available to MPs to
engage in constituency services.

Fourth, the committees within Parliaments are relatively unproductive
due to insufficient time to review legislation, lack of professional
staff, poor public outreach, the lack of hearings or public input on
draft legislation and a lack of discussion or debate on committee
issues.

Finally, ethno-nationalism is a factor that continues to restrict the
full development of the legislative branch. Ethno-nationalism defines
the political spectrum, mutes policy discussion, and complicates the
institutional design and operation of political structures. As long as
ethnic considerations are the primary driving factor in developing and
discussing key political issues, BiH political institutions and
processes will be adversely affected.

III\. GENERAL ANALYSIS OF THE SITUATION

In less than a decade, the BiH Parliamentary Assembly (PA) underwent
tremendous evolution within a difficult environment. It was often at the
cutting edge of innovation: its 2000 Standing Orders, for instance, were
the first in the region to entrust a significant role to committees.
Also, the Secretariat's staff enjoyed the protection of a professional
status before any other in BiH, through a Rule Book also from 2000,
anticipating civil service legislation at all levels. Recently, the PA
of BiH was among the first in the region to run a TV program, establish
a drafting code, or have its own Research Center. Although the situation
is far from optimal, the availability and use of information technology
in daily work are way above the average in other administrations in BiH.

Of course, this positive record is not the PA's exclusive merit, and
owes largely to the contribution of the foreign programs and
consultants. Also, apart from the results already mentioned, other
interventions did not leave much of a mark.

Parliament faces a number of systemic problems. Many of the newly
established processes and procedures are extremely fragile and far from
sustainable. The sheer volume of legislation places an enormous strain
on an already fragile bureaucracy. This strain is increasing as the
State gains new competencies in areas such as defence, indirect taxation
and intelligence. The Parliament is largely marginalized by the
executive branch of government which controls legislative agendas and
allows minimal parliamentary participation in governing and
policy-making processes. There is little public participation in the
legislative process, partly due to the perceived marginalization of
Parliament and partly to the fact that there is little tradition of
encouraging citizens' involvement in parliamentary business. Citizens
groups, businesses and other organized interests are disengaged from the
legislative process. This accounts, in part, for the relatively low
public standing and lack of respect for the Parliaments, the low quality
and lack of implementation of laws, and the alienation of the people
from the overall democratic political process

Management of the legislative process within BiH Parliaments suffers
from systemic weaknesses, including ineffective procedures, poor use of
IT, a lack of adequately trained professional staff and an almost
complete absence of specialized legislative services. The BiH PA
Registry Office coordinates the flow of documentation and information
within the BiH PA and between the BiH PA and external interlocutors.
Developing a Registry Office with streamlined procedures is central to
increasing the efficiency and effectiveness of Parliament as a whole.
The newly created Legal Office is important since it will be the link
between the BiH Council of Ministers and the BiH PA, taking legislative
proposals from the Council of Ministers and preparing drafts for
consideration by Parliament. This new office must be fully operational
as quickly as possible. A Parliamentary Research Centre (PRC) has been
established. However, it only services two committees. The PRC's
capacity must be strengthened to enable it to engage with all committees
and across the full spectrum of Parliamentary business. Strengthening
the management capacity of the Secretariat, the principal body
responsible for the day to management of the Parliament, is central to
increasing efficiency and effectiveness and to ensuring that public
funds are properly managed. This must be underpinned by better use of
IT, to manage the considerable volume of Parliamentary business.

The BiH PA committee structure is incomplete and weak. Many committees
lack the basic skills necessary for thorough legislative scrutiny and
there are few opportunities for the public to have an input into draft
legislation.

BiH Parliaments, particularly the BiH PA, will be expected to assume
additional responsibilities once the OHR leaves and when BiH enters into
a Stabilization and Association Agreement with the EU. This will lead to
a transfer of those executive responsibilities currently carried out by
the OHR to the BiH PA. The High Representative has stressed the need for
the BiH PA to be in a position to take over these functions as soon as
possible.

Expected increase in size

The USG, together with the main PA parties, launched an initiative for
constitutional amendments in early 2006. These amendments would
dramatically increase the number of MPs in the PA\--even by 100%. The
first attempt to pass the amendment package in the PA did not succeed,
but another try is expected in early 2007. Apart from its political
value, such a measure would have positive aspects for the functioning of
the PA. Having more MPs may make multiple committee memberships less
needed, allowing parliamentarians to specialize more. Also, absences due
to international activities and other reasons would impact less on the
capacity to reach a quorum. And of course, the prestige and visibility
of the legislative body would benefit.

There are downsides, however, with the package. If the number of MPs
were increased by 100 percent, the turnover of members would be much
higher. The small Secretariat, therefore, will suddenly be called to
assist an unprecedented number of MPs, an unusual percentage of which
will have no experience of the house's business. This is likely to place
tremendous stress on the management systems of the PA, both in relation
to its function as a legislator, and concerning the internal functions
supporting all business processes.

Expected increase in workload

Besides an increase in the number of MPs, an increase in parliamentary
workload must also be expected. This will result from two factors, the
first of which is the announced demise of the OHR in 2007. From 1998 to
quite recently, much of the State-level legislation came from there. In
such cases, the PA's role was simply that of a rubber stamp, expected to
re-enact the High Representative's text without any discussion, or
amendments. As this anomaly will cease, an increase in the required
amount of parliamentary work can be expected, particularly at the
committee level.

The EU integration effort will further increase the workload. In January
2005, BiH started negotiations with the European Commission on a
Stabilization and Association Agreement (SAA), which is hoped to be
signed in the course of 2007. This process requires the adoption and
execution of a National Plan for the Implementation of the Acquis, as an
instrument to adjust BiH's legal system to the over 83.000 pages of EU
legislation (the acqus), which shall provide the basis for BiH's actual
EU membership. The tremendous increase in parliamentary activities that
this will require is self-evident.

State of staffing arrangements

The expected changes outlined above mean that in the near future the PA
and its Secretariat will face unprecedented challenges. Facing them will
require a properly staffed and equipped organization, with strong
management systems and clear internal processes in all areas of
business. Unfortunately, at the moment the PA is far from matching such
a description: its staffing arrangements are poor, and its management
systems quite patchy.

The number of staff in the PA Secretariat has never been high, and never
beyond a 1:1 ratio to the number of MPs (in most other European
parliaments, staff is significantly larger in proportion). As the number
of MPs and legislative workload increase, the Secretariat's size is
unlikely to grow at the same speed. A proposed new Rule Book of the
Secretariat, now under discussion, includes a staffing plan of up to 140
positions, which would roughly match the expected increase in the number
of MPs.

Chances of a faster pace in the implementation of the new Rule Book are
slim. The main condition would be a rebalance of the State budget based
on the availability of additional revenues. This happened before, but
may meet opposition now. Additionally, the same package of reforms is
expected to raise the number of MPs may also create two new State
ministries.

State of Management Systems

The management systems of the PA consist of the procedures, routines,
and other tools linking the Secretariat and the MPs for the achievement
of the organization's common objectives. At the moment, it is a rather
irregular landscape. On one side, the need for improvements is
acknowledged, and several innovative features were already introduced
both by the PA management alone and upon advice of foreign consultants.
On the other side, even when a management system was introduced anew,
implementation was not complete. The main reason for this seems to be
simple time pressure: with the Secretariat understaffed in most
departments, all available time is spent in the routine tasks required
for the PA to function. This leaves little to invest on embedding new
initiatives into standard procedures, and even less for the management
to monitor their implementation by the staff.

There is a notable lack of planning and coordination, with little
integration among the various segments of business processes, even in
closely related area.

IV\. POTENTIAL LEGISLATIVE ASSESSMENT ISSUES/QUESTIONS

1\. What are the expectations for the legislative system in Bosnia among
members of the following?

-   General public

-   Political elites

-   Legislators

-   Political parties

-   International community

2\. What are the roles and functions of the state Parliament and the
entity parliaments? What is the relationship between the state
Parliament and the entity parliament?

3\. What is the legal framework under which the current legislative
system is governed?

4\. Is there political support and will for strengthening the powers and
authorities of the state Parliament among the:

-   General public

-   Political elites

-   Legislators

-   Political parties

-   International community?

5\. What role do political parties play in the legislative process?
Constructive or obstructionist? What problems in the political party
structure and system contribute to weak legislative institutions?

6\. How do the current legislative bodies (State and entities) perform
their primary legislative functions -- representation, lawmaking, and
oversight?

7\. How open are the legislative bodies to public participation from
NGOs, public, think tanks, media, etc? What are the types of interaction
between these groups and the legislative bodies?

8\. How is legislative work currently performed? Are the rules (and
conduct) of legislative process and procedures sufficient? What is the
role of committees in the legislative process?

9\. What is the role of the legislative bodies in lawmaking?

10\. Do any of the legislative bodies have any type of long-term
development plan or strategy for strengthening their institutions?

**SECTOR POLICY BRIEF:**

**LOCAL GOVERNANCE IN BOSNIA AND HERZEGOVINA**

**December 2006**

I. BACKGROUND

There is widespread acknowledgement that structures of governance as
developed in Bosnia and Herzegovina (BIH) since 1995 are neither
particularly efficient nor accountable, and may not be sustainable in
the long run. The public sector's share of GDP exceeds 50% and is
growing, while 90% of public spending goes to the entities and cantons -
the "fat middle". Continued low levels of public investment and a strong
bias towards merely funding operating costs, combined with a legacy of
the past which contributes to passivity and cynicism towards public
institutions, have eroded the core legitimacy of the democratic process.
Ctizens increasingly choose not to participate in elections and other
feedback opportunities.

Local government is at the crux of many of the current political,
economic and social developments in BiH. This level of government
presents a rare opportunity for optimism in Bosnia's public sector and
provides real life examples of the benefits of public administration
reform. In the last years, through their own efforts and with moderate
amounts of foreign assistance, municipal governments have undertaken
numerous reforms which are beginning to pay dividends. In public opinion
surveys, municipal governments in BIH are consistently viewed by
citizens as the most trustworthy level of government, and the second
most trustworthy public institution behind the police. In
USAID-sponsored polling, indicators of confidence in and satisfaction
with local governments have marked steady increases since 2001.

The successful achievement of many development objectives depends on
local governments becoming more effective, efficient, responsive and
accountable. Critical in this process are municipal institutions which
govern closest to the average citizen. Their work tends to be most
scrutinized by the citizenry, as well as the most directly connected to
meeting urgent community needs and providing critical services. Without
transparent, accountable and efficient local governing structures and
authorities that are trained to perform their role well in a democratic
society, citizens will not be satisfied with the government response to
their needs, local businesses will in effect face disincentives to do
business legally, and local initiative will be strangled.

II\. DEVELOPMENT CHALLENGES

Bosnia's 143 municipalities, which were until recently nearly all at a
uniformly low level of development, have begun to differentiate
themselves. Approximately 50 municipalities have made sizable
improvements in professional and administrative capacities, in customer
service, and in financial management. Many, but certainly not all, of
these improvements have been accomplished with the assistance of foreign
donors. A larger group of municipalities, however, is in a more reactive
mode, focused more on everyday survival, waiting for directives to come
from higher level governments rather than embarking on self-directed
reform. In these municipalities, waiting times for basic municipal
services are long, and procedures are often unclear and needlessly
circular. The growing gap in the capacities and willingness of
municipalities to improve services and planning is a consequence of the
fact that some municipalities have made positive improvements. However,
to the extent that laggard or undeveloped municipalities remain
stagnant, this trend will increasingly become an excuse to hamper
further fiscal decentralization. Service provision improvements must be
registered among a wider swath of municipalities.

Many municipalities in BiH are objectively overstaffed, partly as a
result of the socialist legacy, partly as a result of the war, when
municipalities took on large numbers of personnel to attend to ad hoc
duties. A handful of municipalities have begun addressing the staffing
problem, either by shifting staff to departments with higher demands, or
by actually letting go of redundant personnel. In general, municipal
staff are often poorly educated for their vocation, with very little
ongoing professional training offered. The training that does occur is
usually supply-driven and financed by foreign donors. (There are,
however, first signs of the development of an indigenous, demand-driven
training market.) Inefficient human resource patterns (both in terms of
quantity and quality) represent a sizeable drag on municipal operating
budgets and municipal performance.

In both entities, there is increasing attention on deficiencies in the
legal framework in which municipalities operate. Both entities have
recently passed local self-governance laws. Although not fully
implemented, the situation in the RS is more closely resembles a
"normal" transition situation. The RS local self-government law is not
fully implemented, and is in need of further improvements, but required
improvements are mostly incremental in nature. In the Federation, an
important first step was taken in summer 2006 with the adoption of the
framework law on local self-governance. This law establishes important
principles in line with the European Charter on Local Self-Governance,
but because of the more fractured governance structure in the
Federation, full implementation will be considerably more complex.
Simply put, the cantons make governance reform in the Federation much
trickier.

Municipalities in BiH, relative to higher levels of government, are
dramatically underfunded according to regional and worldwide
comparisons, with only 8% of all public revenues accruing to
municipalities. A major problem, particularly in the Federation, is the
fact that the process of systematic functional decentralization has only
just begun. Systemic underfunding of local governments is objectively a
major problem that needs to be addressed. At the same time,
municipalities need to make concrete improvements in how their currently
spend their scarce resources, with a view towards improving capital to
operation budget ratios.

The system of public finance in BiH is in a state of transition. The
introduction of the Value Added Tax (VAT) in 2006 allowed for the
adoption in both entities of formula-based revenue allocation systems.
In the Federation, this meant moving from 10 different systems of local
self-government finance to one; in the RS the change was more subtle but
also important, with more transparent variables designed to better
reflect cost of service. In both entities, equalization formulae were
introduced to help the poorest municipalities improve services.

Two-way communication between municipalities and finance ministries on
both revenues and expenditures is still in its infancy. The promises of
the new revenue allocation systems, including greater transparency and
predictability, have yet to be fully realized. On the expenditure side,
there has been some movement towards a unified treasury system for
municipalities in the RS, but major questions remain on the
functionality of the system (particularly in terms of broader financial
management and planning) as well as technical implementation issues. In
the Federation, the finance ministry has yet to develop substantial
capacity for forward thinking in regards to municipal finance at either
the political or technical levels. In the medium-term, there may also be
movement in the Federation towards requiring municipal treasury systems.

Because of a chronic lack of capital spending on all levels of
government over the past 15 years, municipalities face ever growing
demands for repairs to infrastructure necessary for both basic quality
of life as well as commercial development. Unfortunately, current
revenue sharing formulae and own-revenues often do not allow for
completion of mandated basic services, much less capital improvements.
Largely due to IMF pressure against entity-level debt laws designed to
enact realistic, objective criteria under which municipal lending may
occur, a commercial credit market for municipalities to finance
longer-term infrastructure has yet to develop. In addition the enabling
environment for finance of longer-term projects has yet to be adequately
developed, even as an increasing (but still relatively small) number of
municipalities are considered credit-worthy. The lack of an acceptable
enabling environment for municipal debt is problematic not only because
of the decay of infrastructure, but also because it constrains the
market-based incentives that would otherwise exist for municipalities to
improve their financial fundamentals.

Strong collective municipal interest representation and information
sharing is critical for the long-term development of the municipal
sector. Both entity municipal associations have made progress in the
past years, especially in regards to improving the capacities of their
professional staffs. Similarly to ministries, however, both associations
are often in the reactive mode regarding upcoming policy or fiscal
shifts. Associations generally do not drive policy debates. As with
ministries, at least part of the problem is associated with the lack of
domestic ownership in policy-making: nearly all major policy initiatives
in post-war Bosnia-Herzegovina have been driven by foreign institutions.
Another part of the problem lies with the mayors themselves: many do not
understand the role of their association and often do not feel
ownership. It has been common to hear mayors talk of their respective
municipal association in the third-person plural ("they") instead of the
first-person plural ("we"), although there is increasing realization of
the importance of collective representation. Vital next steps for
municipal association development include developing stronger
information sharing and policy analysis, formulation and promotion
capacities, and more robust internal governance and management systems.

III\. USG INTERVENTIONS

USAID began working with municipalities in late 2001, through a \$6
million cooperative agreement with CHF which implemented a broad
municipal development project in 14 municipalities in Central Bosnia.
This was primarily a micro-credit program aimed to form functioning
chambers of commerce, using the prospect of cooperative loans as an
incentive, but the project also began to install "One-Stop Shops" in
partner municipalities. The idea of the One-Stop Shop is to standardize
municipal service provision and make it easier to access and more
transparent. Instead of knocking on random doors in the municipal
building in search of information of how to apply for a construction
permit, for example, a citizen simply goes to the One-Stop Shop, which
is bright, open, and resembles a modern bank.

After receiving overwhelmingly positive responses from mayors and
citizens, USAID designed a new project for implementation in northern
Bosnia building on the general concept. This was a \$6.5 million
contract from 2002-2005, implemented by Padco, Inc. This project
conducted process engineering, installing IT systems and One-Stop Shops
in 12 northern Bosnia municipalities to reduce waiting times and improve
citizen satisfaction with services. The project also made the municipal
budget process more professional and transparent.

USAID conducted an assessment of the municipal sector in late 2004. The
assessment proposed a number of concrete policy interventions needed to
move towards improved governance in BiH. Based on the assessment,
Swedish SIDA decided to match USAID's planned \$10 million investment in
the Governance Accountability Project (GAP). GAP is a 3-year \$20
million project (2004-2007) implemented by DAI to improve the customer
service profiles and the administrative/management systems of 41 local
governments through direct municipal interventions, including the
construction of One-Stop-Shops, which dramatically reduce waiting times
for citizens by consolidating customer service for the entire
municipality at one location. The project is also helping local
governments to improve management of their finances by providing
technical assistance designed to help them better control and
rationalize revenues and expenditures. GAP works on improving the policy
and fiscal framework for local governments, and drafted landmark revenue
allocation legislation to provide more equitable and predictable funds
to municipalities, which was passed in 2006. This effort required
considerable pushing on the part of the ECON and POL section heads, as
well as the DCM and the Mission Director. In the end, both entities
parliaments voted for the legislation against the strenuous objections
of both finance ministries (who wanted to control funds on an ad hoc
basis).

USAID, SIDA and the Dutch Government are now planning a follow-on to
GAP, which is anticipated to be a \$30 million, five-year project to
start in August 2007. GAP2 will expand the reach of the assisted
municipalities to 70 (i.e., half of Bosnia's municipalities, and about
two-thirds of the population), and will continue important policy work
in line with the USG's efforts to make governance structures in BiH more
efficient.

Summary of USG local governance interventions in BiH

  ----------- ----------------- ---------- ----------- ---------------------------------
  **Project   **Implementer**   **LOP      **Dates**   **Main Focus**
  Name**                        Amount**               

  MEDI        CHF               \$6.5m     9/01-9/04   Micro-Credit; Business and mayor
                                                       associations; rudimentary
                                                       One-Stop Shops in 14
                                                       municipalities

  LGSA        Padco             \$6.5m     9/02-9/05   Process reengineering; One-Stop
                                                       Shops, budget improvements;
                                                       financial management systems;
                                                       capital planning, LED

  GAP         DAI               \$20m      7/04-8/07   Process reengineering; One-Stop
                                (\$10m                 Shops; policy and fiscal reform,
                                USAID)                 financial management systems;
                                                       community grants in 41
                                                       municipalities

  GAP2        TBD               \$30m      8/07-8/12   Demand-driven assistance in 41
                                (\$10m                 legacy municipalities; core
                                USAID)                 assistance in new 30
                                                       municipalities, including
                                                       One-Stop Shops and financial
                                                       management systems; governance
                                                       reform; co-financing of capital
                                                       projects
  ----------- ----------------- ---------- ----------- ---------------------------------

# APPENDIX B: MEETINGS {#appendix-b-meetings .unnumbered}

**US Embassy and USAID**

-   Valerie Chien, USAID

-   Yolanta Christova, Good Governance Advisor, USAID

-   Michael Henning, USAID

-   Kristine Herrmann-Deluca, Director, Democracy Office, USAID

-   Timothy Hughes, Chief of Party, USAID

-   Elmerina Ahmetaj Hrelja, Advisor for Ministry of Justice, USAID

-   Eugene Murret, Adviser for Court Administration, USAID

-   Lisa Gregory, First Secretary for Political Affairs, United States
    Embassy

-   Graham Mayer, First Secretary, United States Embassy

-   Roy Phillips, Senior Policy Analyst, United States Embassy

**Implementers**

-   Lejla Bicakcic, Managing Director, CIN/NYU

-   Hakan Gustafsson, Municipal Interventions Director, Governance
    Accountability Project

-   Milun Grahovac, Municipal Coordinator, Governance Accountability
    Project

-   Brankica Lenic, Policy Advisor, Governance Accountability Project

-   Slavica Rokvic, Regional Coordinator, Governance Accountability
    Project

-   Rudy Runko, Chief of Party, Governance Accountability Project

-   Denisa Sarajlic-Maglic, Policy Director, Governance Accountability
    Project

-   Barbara Broomell, Director of Program for BiH, IRI

-   Kelly Kimball, Senior Program Assistant, National Democratic
    Institute

-   Niamh O'Connor, Country Director, National Democratic Institute

-   Steven Tweedie, Director of Parliamentary Programs, National
    Democratic Institute

-   Elvis Zutic, Program Director, National Democratic Institute

**Donors and International Organizations**

-   Dzemal Hodzic, Task Manager, European Union

-   Michael Weichert, Regional Coordinator, Friedrich Ebert Stiftung

-   Raffi Gregorian, Supervisor for Brcko District, OHR

-   Michael Stechow, Senior Democratization Officer, OSCE

-   Anneli Von Wachenfeldt, Democratization Officer, OSCE

-   Trefor Williams, Director, Democratization Department, OSCE

-   Boris Divjak, President of the Board, Transparency International,
    BiH

**Government Officials**

-   Ljubo Beslic, Mayor, City of Mostar

-   Medzida Kreso, President of The Court, Court of Bih

-   Amela Odobasic, Head of Public Affairs, Communications Regulatory
    Agency

-   Kemal Huseinovic, Director General, Communications Regulatory Agency

-   Dunja Mijatovic, Director of Broadcast Division, Communications
    Regulatory Agency

-   Milorad Dodik, Prime Minister, Republic of Srpska

-   Ivana Levi, Advisor, Prime Minister's Office, Republic of Srpska

**Others**

-   Patrick Gaynes, Managing Director, Aegis Equity

-   Natasa Tesanovic, General Manager, Alternativna Television

-   Dennis Gratz, Attorney

-   Borka Rudic, General Secretary, BiH Journalist Association

-   Zdravko Grebo, Director, Center for Interdisiplinary Postgraduate
    Studies University of Sarajevo

-   Amela Mehic, Account Director, DPP Studio

-   Ramiz Mehakovic, CEO, DPP Studio

-   Mirjana Penava, Executive Director, FORMA F

-   Tarik Jusic, Program Director, Media Centar Sarajevo

-   Boro Kontic, Director, Media Centar Sarajevo

-   Zoran Puljic, Executive Director, Mozaik

-   Darko Aleksic, Director General, Mreza Plus

-   Mirjana Kusmuk, Deputy Editor-in-Chief, Nezavisne Novine

-   Dragan Jerinic, Managing Editor, Nezavisne Novine

-   Zeljko Kopanja, Co-founder and editor, Nezavisne Novine

-   Jasenko Selimovic, Head of the President\'s Office, Socijal
    Demokratska Partija

[^1]: "Opinion on the Constitutional Situation in Bosnia and Herzegovina
    and the Powers of the High Representative." European Commission for
    Democracy through Law (Venice Commission), CDL-AD (2005) 004,
    Venice, 11 March 2005.

[^2]: After this vote HDZ split along the lines of support or opposition
    to the constitutional amendments, with those who opposed them
    leaving to form a new party, HDZ-1990.

[^3]: Haris Silajdzic had lost the elections for the Bosniac member of
    the BiH Presidency in 2002 to the SDA leader Sulejman Tihic.
    Silajdzic had left BiH, returning only to bring down the
    constitutional changes in April 2006.

[^4]: Following the successful negotiation of the [Dayton Peace
    Agreement](http://www.ohr.int/dpa/default.asp?content_id=380) in
    November 1995, a Peace Implementation Conference was held in London
    on December 8-9, 1995, to mobilise international support for the
    Agreement. The meeting resulted in the establishment of the **Peace
    Implementation Council (PIC)**. [The Steering Board
    members]{.underline} are Canada, France, Germany, Italy, Japan,
    Russia, United Kingdom, United States, the Presidency of the
    European Union, the European Commission, and the Organisation of the
    Islamic Conference (OIC), which is represented by Turkey.The
    Steering Board provides the High Representative with political
    guidance. In Sarajevo, the High Representative chairs weekly
    meetings of the Ambassadors to BiH of the Steering Board members. In
    addition, the Steering Board meets at the level of political
    directors every three months. For more information on PIC see at
    www.ohr.int/ohr-info/gen-info/#6

[^5]: See UNDP Quarterly Report 2004, October -- December, p. 13. This
    polling suggests that the main reason for not voting (42.7% of the
    people in BiH who did not vote: 44.6% in the F BiH, 40 % in the RS
    and 15.5% in Brcko District) is lack of confidence in politicians
    and their ability to make a difference.

[^6]: See, for example, "Civil Society, Democratization, and
    Development: Clearing the Analytical Ground," in Democratization,
    1:3, (autumn 1994).

[^7]: See "Think Again: Civil Society" in *Foreign Policy Magazine*,
    Winter 1999-2000 edition.

[^8]: USAID NGO Sustainability Index is being developed annually and it
    serves as a main indicator for USAID BiH Civil Society Strategic
    Objective:
    <http://www.usaid.gov/locations/europe_eurasia/dem_gov/ngoindex/>.

[^9]: Please visit the official web site of Ngo Resource Center:
    <http://www.civilnodrustvo.ba/>

[^10]: Please visit the official web site of GROZD
    [www.grozd.ba](http://www.grozd.ba/)

[^11]: See Perspectives on the NGO Sector in BiH, November 2002, p. 37.

[^12]: According to the poll, which was conducted in October and
    November 2003 by PRISM Research, 26% of respondents indicated that
    NGOS should receive tax benefits 'in any case,' while another 35%
    answered yes 'under the condition that their work is controlled.'

[^13]: See ICNL Semi-Annual Report: Bosnia and Herzegovina dated 15
    December 2003, p. 4.

[^14]: See *Perspectives on the NGO Sector in BiH*, November 2002, p.
    24.

[^15]: See *Nations in Transit Report*, 2003, prepared by Freedom House,
    p. 157.

[^16]: The experience of CCI provides a case in point.

[^17]: ^"Were\ Bosnian\ Policy\ Research\ Organizations\ More\ Effective\ in\ 2006\ than\ in\ 2003?\ Did\ Technical\ Assistance\ Play\ a\ Role?\ -\ Urban\ Institute,\ written\ by\ Raymond\ J.\ Struyk,\ Kelly\ Kohagen,\ and\ Christopher\ Miller,\ November\ 2006^