Bosnia and Herzegovina: Domestic divisions test regional balance
The Balkan state is experiencing internal political gridlock, while Western and Eastern actors vie for influence in the ethnically and religiously divided country.
In a nutshell
- Ethnic and religious divisions continue to fragment the country
- The Dayton framework provides stability while limiting institutional change
- Regional pressures frustrate hopes for EU accession
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Bosnia and Herzegovina, often simply referred to as Bosnia, an almost entirely landlocked country with mountain ranges and spectacular scenery, used to be the heartland of former Yugoslavia. Ethnically and religiously diverse, it represented the erstwhile federation’s ideology of “brotherhood and unity.” It is no coincidence that the founding act for Josip Tito’s new federation took place in the Bosnian city of Jajce on November 29, 1943. This date remained Yugoslav National Day until 1992, when the federation dissolved.
The historic events shaping Yugoslavia and their deep impact on Bosnia continue to be evident even in the 21st century: Numerous buildings still bear the impacts of gunfire, while others are abandoned despite their favorable location. The rail system has in some places deteriorated and in others ceased to exist, and the country’s population decline is palpable.
Under Habsburg rule (1878-1918) and then later, more systematically, under Yugoslavia until 1992, a sense of historical and geographical cohesion was maintained. In today’s Bosnia, however, ethnicity and religion significantly shape political reality in the country of just over 3 million people. Often, government positions are reserved for candidates from specific ethnic groups to ensure representation of Bosniaks, Croats and Serbs.
Ethnic and religious divisions
Today, Bosnia and Herzegovina consists of two entities: The Federation of Bosnia and Herzegovina, predominantly composed of Bosniaks and Croats, and Republika Srpska, which is largely Serb, along with the self-governing Brcko District. The entities are institutionally represented at the state level while exercising autonomous authority within their respective territories.
Bosnia and Herzegovina’s Statehood Day on November 25 highlights internal divisions: It is celebrated almost exclusively by the Bosniak population, while the Croat and Serbian population perceive it as a regular working day. In Republika Srpska, on the other hand, ethnic Serbs celebrate the Day of the Republic on January 9, and the Day of Serb Unity, Freedom and the National Flag on September 15, neither of which is acknowledged at the national level.
Facts & figures
Political map of Bosnia and Herzegovina
In 1992, the Socialist Federal Republic of Yugoslavia (SFRY) fell apart, triggering, among other events, the war in Bosnia. The latter ended through the United States-brokered Dayton Peace Agreement of December 1995, which established a constitutional set-up for Bosnia that remains in place to this day.
Long-standing domestic challenges
Throughout the 1992-1995 war and beyond, Bosnia has suffered a dramatic population decline due to wartime deaths and continued emigration. Today, the median age stands at 46 years, while the birth rate fell to 1.35 children per woman in 2022. Conversely, prior to 1992, Bosnia had been not only a vibrant component of the Yugoslav federation but also its military stronghold, with a high concentration of heavy and defense-sector industries. Prewar Bosnia was a hub for car manufacturing, including Volkswagen, as well as agricultural production, exemplified by the Agrokomerc conglomerate.
Tito maintained Yugoslav unity with an iron fist. After his death in 1980, the League of Communists of Yugoslavia was left to govern without him. By the end of the 1980s, rising political liberalization conflicted with the old model of enforced unity, a clash particularly affecting ethnically and religiously diverse Bosnia.
Despite Yugoslavia’s violent dissolution, in Bosnia, the legacy of Yugoslavia remains especially strong: No new national identity has emerged to replace it, and no modern concept of citizenship has been able to supersede ethnic identities such as Bosniak, Serb or Croat.
The Dayton framework: A challenge to effective governance
The Dayton Peace Agreement fundamentally rearranged the governance and administrative set-up of Bosnia, which has not been substantially changed in the 30 years since. The upside was peace, the downside a divided country; a bloated, inefficient system of multiple layers of decision-makers overseen by foreign authorities, with the High Representative, serving effectively as a proconsul, overseeing the system. This is periodically legitimized by a democratic system, which has not been able to outgrow its historically rooted emphasis on ethnicity and religion. Efforts to achieve a breakthrough toward modern, citizen-centered political parties came close to success in the mid-2000s, but the reform attempt was blocked by a razor-thin majority of just two votes.
As Bosnia’s political system remains divided, the former Serbian leader Milorad Dodik has been heavily criticized in the West and labeled a secessionist for advocating for formal recognition of the de facto division of the country, and ever closer integration of the Republika Srpska with the Serbian state. More than 20 years ago, he started out as a champion of supranational cooperation and joint economic development of Bosnia. After facing a decline in popularity, he shifted toward a more ethnonationalist stance, appealing to the ethnic Serb electorate, since winning every election he participated in within Republika Srpska.
There is a growing perception among Bosniaks that the perseverance of the Dayton system and the pursuit of European Union membership seem to be leading nowhere, potentially even hindering significant progress for the country. Consequently, the idea of reducing foreign tutelage in favor of greater local ownership is not taboo anymore, especially in academic circles.
Competing geopolitical interests
In theory, the country did take a leap forward after it was granted EU candidate status in late 2022. In reality, the positive effects are modest. Despite the EU’s decision to begin accession talks in March 2024, progress is limited and slow. Divisions between the Republika Srpska and the Federation of Bosnia and Herzegovina prevent effective decision-making on behalf of the country as a whole. Continued inaction by the collective central government has already meant missing out on 108 million euros of EU aid under the so-called Reform and Growth Facility for the Western Balkans. Internal strife prevails even in cases when funding by the EU could easily be obtained.
Despite years of anticipation, the EU still has not eliminated telephone roaming fees for the Western Balkans, while Ukraine – with more than twice the population of the entire Western Balkans – was granted this privilege via fast track as of January 1, 2026. This development was perceived as a humiliation in Sarajevo, Belgrade, Skopje and other Balkan capitals, representing a prolonged burden on human and business contacts with the EU. That said, the West, and the EU in particular, continues to be Bosnia’s primary economic partner while absorbing hundreds of thousands of Bosnian emigrants.
Read more on the Western Balkans
- U.S. diplomacy in the Western Balkans
- Kosovo: Scenarios for an unfinished secession
- The Western Balkans: Overlooked but not unimportant
As ever, the world keeps a close eye on Bosnia, with NATO seeking closer relations, and Russia cultivating strong ties with the Serbian side to prevent just that. However, in practical terms, U.S.-Russia cooperation over Bosnia continues to be better than could have been expected after Russia’s 2022 invasion of Ukraine. Recent meetings of former Serbian leader Milorad Dodik with Israel’s Prime Minister Benjamin Netanyahu in Jerusalem, as well as between Zeljka Cvijanovic, the Serb member of Bosnian Presidency with U.S. Secretary of Commerce Howard Lutnick in Washington, indicate that geopolitical pragmatism and flexibility are on the rise.
Meanwhile, the U.S. is supporting Bosnia in reducing its reliance on cheap Russian pipeline gas, traditionally supplied via Serbia, by supporting the Southern Interconnection gas pipeline, which will provide Bosnia with liquefied natural gas through the Croatian terminal in Krk. The success of these international efforts will be closely linked to the outcome of the U.S. peace initiatives in Ukraine.
Scenarios
Likely: Prolonged institutional freeze
Bosnia’s overall stagnation will continue and the international presence will persist in the form of the High Representative, the framework and constitution of the Dayton Agreement, NATO troops, military personnel from EU countries and election observers. Emigration will continue, despite economic growth being well above the EU average.
It can be expected that a lasting peace in Ukraine would bring a detente, not only between the West and Russia, but also to Bosnia. Bosnia’s EU bid will continue to keep the internal political landscape busy, but progress will be slow. In the absence of sufficient pressure to reform the Dayton framework and with no convincing alternative on the table, holding on to what is safe, even though faulty, will remain the first choice. An improved U.S. relationship with Bosnian Serb leadership could lead to new political alignments. The probability of this scenario is 75 percent.
Unlikely: Miracles in politics in Bosnia and Herzegovina, Serbia and Croatia
A change of policy within Bosnia, Serbia and Croatia, or at the helm of the EU could make way for regional partnerships. If local leaders in Bosnia were to prioritize the country’s long-term interests over ethnic and regional concerns, it could foster a more constructive relationship between foreign and regional capitals, including Belgrade, Zagreb, Sarajevo, Banja Luka and Mostar. This could, in theory, open markets, trigger in-depth cooperation and create a spiral of growing wealth, benefiting everybody. Like in other Western Balkan countries, strategically relevant raw materials, if leveraged more effectively, could bring about greater employment, industry and wealth.
This remains highly improbable at the moment, yet politicians as diverse as Serbian President Aleksandar Vucic and Austrian Foreign Minister Beate Meinl-Reisinger have revived a recurring idea of a “big bang” EU accession process, simultaneously absorbing all Western Balkan countries.
Such political and economic developments would require a lasting peace in Ukraine. With diplomacy returning to the driver’s seat in politics, the previously dominant ethnic-political mindset in Bosnia and the zero-sum approach in European politics could subside to allow for more cooperative solutions. The probability of this scenario is 15 percent.
Extremely unlikely: Escalation in Europe
A confrontation between NATO – or a Coalition of the Willing – with Russia could escalate, also affecting Bosnia, especially given the country’s ethnically and religiously divided population and its position between the Western Catholic and the Eastern Orthodox spheres. Events in Ukraine reverberate strongly in Bosnia, partially due to the Serbs’ secular closeness to Moscow and due to widespread fear of accidental or false flag events, which could trigger a wider military conflict. After major conflicts, surrounding regions often face an influx of fighters, arms and unregulated actors, which could further destabilize Bosnia once the war in Ukraine grinds to a halt.
As for neighboring Serbia, heavy economic pressure has already been exerted on the country due to its deeply rooted closeness to Russia: Moscow’s traditional, cheap and reliable fossil fuel supply for Serbia – and indirectly for Bosnia – is a concrete economic link. As history shows, cornering Serbia is hardly sustainable and tends to backfire. The probability of this scenario is 10 percent.
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