Annex A. The Competitiveness Outlook 2021 scoring model for Bosnia and Herzegovina

The governance structure of Bosnia and Herzegovina (BiH) is highly decentralised, comprising the state-level institutions of Bosnia and Herzegovina, the governments of the two entities – the Federation of Bosnia and Herzegovina (FBiH) and the Republika Srpska (RS) – as well as the autonomous Brčko District. The FBiH and the RS have significant constitutional autonomy and responsibility for the matters which the Constitution of Bosnia and Herzegovina has not assigned to the state-level government.1 The entities have jurisdiction over a range of policies including health care, education, agriculture, culture, labour, police and internal affairs. Both entities have a president, prime minister and their own governments. The FBiH is furthermore divided into ten federal units (cantons), each with its own government and constitution that defines the institutions and functioning of government authorities.

Bosnia and Herzegovina submitted questionnaire responses from the state level and both entities for the Competitiveness Outlook (CO) 2021 assessment. Information from all three sources has been taken into account in the analysis.

Policy making in Bosnia and Herzegovina is much more decentralised than in the other Western Balkan economies covered by the CO 2021 assessment. Therefore, information from the state level, FBiH and RS has been taken into account in the calculation of the assessment scores for the different policy dimensions. Following the changes to the CO assessment framework (see Assessment framework sections in the 16 policy dimension chapters), the scoring model for Bosnia and Herzegovina has been revisited to allow for a more accurate assessment of the different policy dimensions at the different levels of governance.

However, policy recommendations have in many cases been formulated to emphasise the importance of policy co-ordination in Bosnia and Herzegovina in order to strengthen the single domestic market and avoid imbalances in competitiveness between the entities.

Based on these considerations, a scoring system with three models has been developed (Table A A.1).

Table A A.2 shows which scoring model has been applied in which CO 2021 policy dimension, as well as a rationale for its selection. For most of the 16 policy dimensions, a score has been derived by giving one-third of the weight to the state and both entities (Model 1). This reflects a more balanced division of competencies and responsibilities in the policy area between the state level and the entities. For five dimensions (Access to finance, Tax policy, State-owned enterprises, Employment policy and Environment policy) a score has been derived by calculating a simple average of the two entities’ scores. This approach (Model 2) reflects that major policies, mechanisms and institutions in these policy areas exist mainly at the level of the entities. Lastly, the Competition policy dimension only takes state-level information into consideration as it is an exclusively state-level competence (Model 3).


← 1. Paragraph (3) of Article III of the Constitution of Bosnia and Herzegovina stipulates that all government competences not expressly assigned to the state-level government belong to the entities.

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