Nations in Transit

Bosnia and Herzegovina

Bosnia and Herzegovina

Nations in Transit 2005

2005 Scores

Democracy Score
(1 = best, 7 = worst)

4.18

National Democratic Governance
(1 = best, 7 = worst)

4.75

Electoral Process
(1 = best, 7 = worst)

3.25

Civil Society
(1 = best, 7 = worst)

3.75

Independent Media
(1 = best, 7 = worst)

4.00

Local Democratic Governance
(1 = best, 7 = worst)

4.75

Judicial Framework and Independence
(1 = best, 7 = worst)

4.25

Corruption
(1 = best, 7 = worst)

4.50
Executive Summary: 

Bosnia-Herzegovina has made significant progress since the end of the war almost 10 years ago, although democratic governance continues to be conditioned by international intervention. The two entities, the Croat-Bosniak-dominated Federation of Bosnia-Herzegovina (FBiH) and the Serb Republic (RS), have been progressively weakened as central state structures have been put in place. However, the Office of the High Representative (OHR), the main international civilian authority established at Dayton, continues to be the engine behind most reforms even as international organizations increasingly have begun transferring competencies to local institutions to encourage local ownership. Some reforms in the judiciary, police, and public administration have made these institutions more accountable, and the respective parliaments showed minor improvements in effectiveness over 2003. Nevertheless, the political system continues to be dominated by the same ethno-national political parties, which rely on nationalism and clientelism to retain power. Bosnia also continues to lag behind the countries of the region in concluding a Stabilization and Association Agreement with the European Union (EU) and joining the Partnership for Peace (PfP) program of NATO.

The most important developments in Bosnia in 2004 focus on continued reform of the security sector, including the setting up of a state-level security agency and the establishment of state-level command over the armed forces. Nevertheless, Bosnia's application to NATO's PfP was rejected in June and December 2004 over the lack of progress in arresting indicted war criminals in the RS. In addition, the OHR threw its weight behind reforms of the police and defense sectors, which resulted in the abolition of the entity-level defense ministries and the reduction of the competencies of the entity ministries of the interior. In response, the RS government and the Serb members of the state government resigned in an unsuccessful attempt to block the operation of Bosnian institutions.

The 2004 unification of Mostar ended the administrative division of the city between Bosniak- and Croat-dominated municipalities and represented a major symbolic step in overcoming a 10-year stalemate in the city. Yet elections for municipal councils and mayors in October 2004 continued the reign of nationalist parties in most parts of Bosnia, save for a few strategic opposition victories in the RS.

National Democratic Governance. State institutions were further strengthened in 2004, especially in the security sector, with increasing competencies and effectiveness. The introduction of a statewide value-added tax in November 2004 constitutes a major step in ensuring the financial means of state institutions. Reform initiatives are under way for the police with the goal of establishing greater state-level control. The intervention of the OHR decreased in 2004, despite the massive dismissals by the HR in June,July and December. Of the 159 decisions taken in 2004, none imposed a new law and less than a quarter of the decisions amended or repealed laws and status; all other decisions were dismissals or appointments. This decrease in the imposition of laws suggests a greater degree of autonomous local decision making, even if most reforms continue to be pushed by international actors. The new rating for national democratic governance is set at 4.75 owing to the reforms in the security sector and more effective Bosnian institutions.

Electoral Process. The electoral process continues to be dominated by the Serb, Croat, and Bosniak nationalist parties. Local elections held in October 2004, while deemed free and fair by international observers, suffered from the lowest turnout since the war (46 percent). In the FBiH, Croat and Bosniak nationalist parties won a clear victory, while in the RS an opposition coalition won key municipal elections, including the cities of Banja Luka and Trebinje, constituting a major setback for the dominant national party. The district of Brcko held direct elections for local assembly; it was the first such election for the district, which had been run as a protectorate since its establishment in 1999. The rating for electoral process improves from 3.50 to 3.25 owing to successful conduct of local elections and the establishment of democratic institutions in Brcko.

Civil Society. The legal framework and overall state of civil society remain generally unchanged in 2004. Nongovernmental organizations (NGOs) are still largely perceived as service providers, and those that are more constituent based tend to be relatively weak and fragmented. Attempts to include NGOs in the policy process are still in the early stages. At the same time, international donors continue to reduce their operations in Bosnia, diminishing the resources available to local civil society. The rating for civil society remains unchanged at 3.75.

Independent Media. Reform of the public broadcasting systems continued in 2004, and in August the statewide public broadcaster BHT1 began its regular programming nationwide. Also, the regulatory agency for electronic media successfully completed its transformation from an international to a domestic institution. A key Law on Public Broadcasting, however, failed to pass the Parliament in October 2004, throwing the reforms into question. The print media continue to suffer from low circulation and poor quality, and self-regulation in this sector fails to be effective. The independent media rating improves slightly from 4.25 to 4.00 owing to reforms in the public broadcasting system, including the establishment of a state-level public television broadcaster, but also noting the Parliament's difficulty in passing a key reform law and the weakness of print media.

Local Democratic Governance. Local governance is generally more effective than other levels of government in Bosnia but is constrained in terms of competencies and finances by the cantons in the FBiH and the centralized structure of government in the RS. The successful unification of Mostar into a single municipality, imposed by the OHR in January 2004, constitutes a major step in resolving one of the key focal points of tension between Bosniaks and Croats since the Croat-Bosniak war in 1993 and 1994. New laws on local self-government are being drafted, promising to improve the competencies and fiscal independence of municipalities. In addition, a major reform of municipal public administration is being carried out with the assistance of the Organization for Security and Cooperation in Europe in many Bosnian municipalities. However, most of these laws remain to be tested through implementation. The new rating for local democratic governance is set at 4.75 based on the reform initiatives aimed at enshrining local democratic governance in law. Local mayors and councils are directly elected in free and fair elections. The power of municipalities is, however, constrained by the extensive formal competencies and informal powers of cantons and entities.

Judicial Framework and Independence. Significant steps in the reform of the judiciary were undertaken in 2004. The unification of the High Judicial and Prosecutorial Councils into one state-level independent body supervising the appointment of judges and prosecutors provides a foundation for professional competency. Also, the state-level Office of the Ombudsman was transferred from an international body to local ombudsmen. The RS government acknowledged war crimes in Srebrenica and the first suspected war criminals indicted by the International Criminal Tribunal for the Former Yugoslavia (ICTY) were arrested by the RS police. However, substantial problems remain. The status of the cases related to serious human rights violations, which the Constitutional Court inherited from the Human Rights Chamber (shut down in 2002-2003), remains unclear. Furthermore, the War Crimes Chamber at the State Court of Bosnia-Herzegovina, established to take over lower-ranking war crimes cases from the ICTY, will not be operational before 2005. The rating for judicial framework and independence improves from 4.50 to 4.25 owing to the continued vetting of the judiciary, consolidation of supervisory bodies, and increased readiness (under pressure) of RS authorities to face up to war crimes.

Corruption. Corruption continues to bog down reforms and slow democratization throughout Bosnia. Some advances have been made in combating corruption, since it has been recognized as a problem in recent years. Public awareness has increased in the past two years amid revelations by auditors of a number of high-profile cases of corruption and abuse of public funds in both entities. The government action plan to combat corruption is being implemented, although on an ad hoc basis owing to a lack of political will. There is little indication that increased awareness of corruption has translated into electoral choices or carries political consequences without international intervention. The rating for corruption improves from 4.75 to 4.50 because auditing organizations are successfully revealing corruption and abuse of funds.

Outlook for 2005. The transformation of the international civilian presence in Bosnia to an EU-run mission will be a key development for 2005. This will coincide with the commitment by the OHR to intervene less in local decision-making processes. Accession to the PfP will remain high on the agenda, as will the beginning of negotiations for a Stabilization and Association Agreement with the EU. The reform of the police, including the creation of police districts that include regions from both entities, is likely to meet substantial resistance in the RS. In the RS, the fear of further erosion of entity competencies is likely to meet with open political opposition. Following the RS government crisis in late 2004, further confrontations between the governing parties and the OHR are likely to continue.

National Democratic Governance: 

The Bosnian system of governance is highly complex, and its stability rests largely on international intervention and supervision of institutions. With no fewer than 14 governments (1 state level, 2 entities, 10 cantons, and 1 district of Brcko), the system is not only confusing for the average citizen, but also highly unstable. Generally, most governments and public administrations in Bosnia continued to operate with little transparency during 2004, despite the Law on Freedom of Information and related legislation. In June 2001, the entities and the central government adopted the Law on Freedom of Information; however, many institutions fail to live up to the law. According to a June 2004 report from the Democratization Department of the Organization for Security and Cooperation in Europe (OSCE), only about one third of the population knew of the law by June 2004 and a roughly equal number believe that it will benefit citizens.

The central state government level includes a directly elected 3-member presidency, a 2-chamber Parliament, and a 10-member Council of Ministers. In the past, the state-level government had little authority and many vestiges of the state were not recognized in Serb-  and Croat-dominated areas. However, the state has been strengthened to exercise its authority in both entities through the creation of new ministries (such as security and defense) and other institutions, as well as the expansion of state competencies (such as border controls, identity cards, and electronic media supervision).

Consensus on the existence of a strong central government and the Bosnian state remains weak, albeit growing in strength. Major political parties subscribe, at least formally, to a united Bosnia, but in 2004 significant portions of the Serb and Croat populations still favored greater independence for their ethnically based region. According to the January and March 2004 Early Warning Report issued by the United Nations Development Program (UNDP), 30 percent of inhabitants of Serb-majority areas considered unification with Serbia and Montenegro or independence as an issue of primary importance. Support for a separate Croat entity or the reestablishment of the Croat Republic of Herceg-Bosna among Croat-majority areas was around 40 percent in early 2004. There has been a remarkable decline in support for secession in recent years, down by nearly 40 percent since 2001 regarding Serb-majority areas.

While the state government has been growing in power, entity-level governance is still dominant in Bosnia. In the Bosniak-Croat-dominated Federation of Bosnia-Herzegovina (FBiH), the two-chamber Parliament elects a government and a president, but much of the power is held by the 10 cantons. In the Serb Republic (RS), the president and the two vice presidents are elected directly. The assembly chooses a government and elects the Chamber of People. Finally, the district of Brcko, the size of a municipality, has a separate government and elects its own assembly.

Entity and cantonal governments continue to strongly influence the media and economy. Large parts of the economy have not been privatized, or privatization has favored businessmen close to the governing parties. Public utilities remain controlled by the entities and/or cantons and have been misused to finance governing parties throughout Bosnia.

The Office of the High Representative (OHR) continued its activist stance in overseeing governance during 2004, even while it began to reduce its staff and influence on local institutions. In June and July 2004, the OHR dismissed the largest number of individuals from their positions to date, when it permanently banned 12 high-ranking officials in the RS and the Serb Democratic Party (SDS) from holding public office, including the president and vice presidents of the party and the Speaker of Parliament. It also temporarily dismissed 47 officials, including the minister of the interior of the RS. The measure was justified by charges of alleged aid to indicted war criminals by the individuals. In December, the OHR dismissed another 9 officials, mostly high-ranking police officers from the RS, for lack of progress in arresting indicted war criminals.

The dismissal, together with suggestions by the OHR to reform the police on a regional instead of entity basis, prompted the resignation of the Serb members of the state and RS governments in December 2004. This resulted in short-term blockage of institutions but was smoothed over by the restructuring of the RS government, which subsequently comprised the same political parties and most of the same ministers.

The growing consensus toward a Bosnian state has been the result of continuous international oversight. The power of the OHR to impose laws, dismiss officials, and levy fines on individuals and parties has been key to these changes but has also curtailed a number of basic rights and liberties. The OHR is not accountable to any Bosnian institution, nor is there legal recourse to its decisions. In an effort to improve local ownership, High Representative (HR) Paddy Ashdown committed the OHR to less direct intervention and allowed for more decisions to be exercised by local institutions. During 2004, the OHR cut its staff by 25 percent and redefined its role to assist Bosnian authorities in implementing reforms rather than to start new initiatives. In addition, the organization commenced transforming itself into the Office of the European Union Special Representative in Bosnia and Herzegovina. This step was matched in December 2004 by replacing the Stabilization Force (SFOR) led by NATO with the 7,000 strong Althea peacekeeping mission led by the European Union (EU).

Yet the powers of the OHR to dismiss officials and impose laws and decisions are widely recognized by the citizens of Bosnia. In a 2004 poll, 28.3 percent of respondents cited the OHR as the institution that holds power and influence in Bosnia. Bosnian institutions fared much worse, but interestingly, the state Parliament was considered more powerful (8.9 percent) than entity parliaments (2.8 percent) or governments (3.7 percent), reported OSCE. Support for the powers of the OHR differs greatly among the three nations. A majority of Serbs and Croats would like to see the OHR's power reduced, while a majority of Bosniaks prefer that the OHR keep the Bonn powers.

The number of citizens fearing a renewed conflict has been in decline in recent years. In mid-2004, only a quarter of respondents in a UNDP survey feared a new war if the SFOR was to withdraw. At the same time, nearly two thirds consider Bosnia to be on the decline. Interethnic trust remains low, even if it has improved in recent years, and political parties continue to derive legitimacy from antagonistic, ethnically exclusive political agendas. Given the continued international commitment to Bosnia, the risk of a renewed conflict appears to be small. However, the long-term stability of the country depends to a large degree on both the ability of Bosnia to participate in the EU integration process and the constructive participation of its neighbors Croatia and Serbia.

The state, entity, cantonal, and district constitutions are based on a division of power among branches. However, the executive commonly dominates governance owing to the strong influence of parties and their leadership.

The complicated system of representation ensures that all three nations of Bosnia are adequately represented at all levels of government and that no decision is taken against the will of any one community. At the same time, the low degree of intercommunity trust within Bosnia, combined with diametrically opposing views on the nature of the state, results in the inability of dominant political parties to agree on constitutional reforms.

In the past, the Parliament, especially at the state level, has been weak, as the national parties have dominated the executive, legislature, and judiciary. In recent years, parliaments have become stronger and more effective in monitoring the work of the executive. While entity and state parliaments maintain Web sites to publicize their work, transparency and public hearings are not established protocol in parliamentary deliberation.

The central government executive branch suffers from many of the same weaknesses that hinder the parliaments. At the state and entity levels, executive responsibility is divided between government and president (presidency at the state level). The state governments remain weak despite public administration reforms, begun in 2000, that provide for increased competencies of the state. Originally, the government had only 3 members (civil affairs and communications, foreign trade and economic relations, and foreign affairs), but reflecting the creation of new state ministries (security, human rights, defense, treasury, justice), the government today has a total of 10 members. Owing to similar power-sharing mechanisms, the FBiH government suffered from similar weaknesses in the past, while the RS government has been more unitary.

Bosnia has two (or three) armed forces, one of each entity, with the FBiH army additionally divided between Croat and Bosniak forces. Similarly, the security services have been under control of the entities. Prior to recent reforms in 2003 and 2004, oversight was exercised exclusively by the entity parliaments, but these often did not fulfill their obligation to supervise the work of the army. The army and security service have lacked democratic oversight. An ambitious reform began to transform the two sectors, but the absence of constitutional amendments at the state level allowed political appointments to slow reform until the OHR pressured the entities to change their legislation. This allowed for the establishment of both a state-level joint command of the armed forces and a Ministry of Defense. The ministry became fully operational in 2004, and the joint command over the armed forces was established. The presidency has command over the two armed forces, while the entity presidents have only limited control in the case of a natural disaster or state of emergency. The Parliamentary Assembly provides for democratic oversight.

In the course of reform, the entity-level security agencies were abolished and replaced by a state-level Intelligence and Security Agency (OSA), operating by the end of 2004. The Executive Intelligence Committee of the Council of Ministers oversees the work of the OSA. The reforms have been accompanied by considerable budget cuts to the defense sector. The armed forces were reduced to 12,000 from 42,000 in 1999 and over 400,000 in 1995 and 1996, and civilian staff in the ministries of defense were cut by 27 percent in the FBiH and 42 percent in the RS. Defense spending is roughly 2.9 percent of the gross domestic product, improved but still considerably higher than that in other comparable countries. Defense budgets are now in line with NATO standards.

The security sector reforms also extend to policing, where two key initiatives were taken in 2004. First, the State Investigation and Protection Agency--the first state-level policing agency in charge of serious crimes such as terrorism, war crimes, and drug smuggling--began its work in 2004. While the agency is operational, it currently employs only a fraction of the planned staff of 1,700, according to Jane's Police Review. Second, in July 2004 the OHR established a police reform commission to propose a statewide overhaul of the entire police system. Representatives from the RS, however, rejected the proposal to form 10 regional police centers in Bosnia independent of entity boundaries, which would effectively transfer policing from an entity (and cantonal) competence to the state level. The OHR is likely to push for similar reform efforts in 2005.

Electoral Process: 

Bosnia-Herzegovina has held four nationwide elections since the end of the war in 1995. While elections in recent years have been largely free and fair, the deep ethnic divisions in Bosnian society expressed themselves in the dominance of three nationalist parties representing Bosniaks, Serbs, and Croats.

All elections until 2002 were organized by the OSCE according to its electoral rules. Since 2002, the Bosnian Election Commission has overseen elections. Municipal elections in 2004 took place without any substantial irregularities, suggesting that the transfer of oversight from the OSCE to a national institution was successful.

Under the Law on Elections, members of the cantonal parliaments, the National Assembly of the RS, the FBiH-level House of Representatives, and the state-level House of Representatives are elected by proportional representation in open lists and multimember constituencies. Despite a 3 percent threshold for parliamentary representation, Bosnia's complicated system of compensatory mandates can also benefit parties and candidates with fewer votes. Members of the state-level presidency, as well as the president and two vice presidents in the RS, are all elected according to a "first past the post" system.

Three monoethnic nationalist parties--the Bosniak Party of Democratic Action (SDA), the Croat Democratic Community (HDZ), and the SDS--dominated Bosnian politics throughout the 1990s and continue to receive strong support from their respective ethnic communities. All three parties have changed leadership and adopted the rhetoric of reform. Yet without an economic program, they remain essentially ethnonationalist parties based on mutually exclusive political platforms.

The SDA incorporates religious (Islamic) and nationalist elements. The key goal of the SDA is the creation of a strong Bosnian state. The HDZ, a branch of the Croatian party of the same name, has in the past supported the separation of western Herzegovina from Bosnia but recently has been advocating merely stronger self-rule of Croat-dominated areas. In 2001, the party led a failed attempt to establish Croat self-government in Herzegovina. Programmatically, it has been split between a more radical and a more moderate wing. The SDS, led until 1996 by indicted war criminal Radovan Karadzic, has been the most successful party in the RS. It promotes Serb nationalism, including an earlier call for the secession of the RS. In recent years, the party has sought to keep the autonomy of the RS and maintain Serb dominance within the entity.

Most other parties also have a nearly monoethnic constituency. The Social Democratic Party (SDP) has Bosniaks, Serbs, Croats, and others in its leadership, but it has had limited success in securing support beyond Bosniaks and urban Croat and Serb voters in the FBiH. The Party for Bosnia-Herzegovina (SBiH), led by wartime SDA prime minister Haris Silajdzic, frequently collaborated with the SDA and has a nearly exclusive Bosniak electorate. In the RS, the Alliance of Independent Social Democrats (SNSD), led by Milorad Dodik, was the first to break the power of the SDS on a moderate platform of social and economic reforms. The party was successful in local elections in October 2004 in the RS, and its support roughly equals that of the SDS. The Party for Democratic Progress (PDP), led by current minister of foreign affairs Mladen Ivanic, has been a coalition partner with the SDS on a more moderate platform of economic reform. None of the moderate Croat parties, the most important being the New Croat Initiative (NHI), have garnered sufficient support to challenge the HDZ's dominance.

In the first postwar elections, voter turnout was high. Since then, the numbers have declined considerably. Between 1997 and 2002, voter turnout dropped to 55 percent from a previous 80

Civil Society: 

Civil society in Bosnia has developed in a fragmented environment while confronted with Bosnia's authoritarian and nationalist political elite. Over the past decade, the legal infrastructure of the civil society has been established and relations between some levels of government and nongovernmental organizations (NGOs) have improved. Still, many NGOs lack roots in society, are unable to engage in effective advocacy and outreach, and rely largely on external funding. Society, political parties and governments have often been suspicious of NGOs because of their funding, their external support, and their support for multiethnic coexistence. In recent years, however, relations have improved and NGOs have become more accepted as partners of authorities (especially at the state and local levels) and the media. These improvements are due partly to public administration reforms and more cooperative politicians at some levels of government. Thanks to a high degree of international intervention and presence, NGOs have been able to operate freely nationwide. Nevertheless, operations at the local level have been difficult in certain parts of Bosnia owing to the negative attitudes of some local authorities. Many other authorities, however, have been increasingly receptive toward NGOs.

The Law on Associations and Law on Foundations have been in effect since 2002. These have facilitated NGO operations throughout the country, but problems remain in the entities' tax laws, which are not yet harmonized and offer limited exemptions for NGOs and foundations. Following a boom of NGOs in the immediate postwar period, the number has stagnated in recent years. The total is hard to estimate since there are no nationwide registration procedures. There are roughly 1,500 to 2,000 NGOs in Bosnia; however, only some 300 are considered to be active, according to the International Council of Voluntary Agencyies' 2002 NGO Directory. The work of these NGOs focused on education and training (17 percent), followed by children/youth and civil society (both 14 percent) and activities related to women and health.

There are generally four types of civil society organizations in Bosnia. The first includes what are conventionally understood as NGOs; this group has received most of the foreign funding and training. The second group covers a number of special interest organizations and associations, often dating from the Communist period; many of these organizations are dormant, while others have a large formal membership but are weak in regards to organizational structures and suffer from ethnic and entity divisions. The third group includes religious charities, in particular Catholic and Islamic charities. Finally, the fourth group includes radical nationalist movements, mostly not or only marginally organized.

NGOs have received considerable international support since the end of the war in 1995, but their roles and the priorities of their international donors have made it difficult to consolidate the sector. Most organizations are relatively small: nearly three quarters of all NGOs have 10 or fewer paid staff, and only half use volunteers. Similarly, most organizations have only a limited budget. Financial sustainability remains a major challenge to the NGO sector.

NGOs and other civil society organizations are now viewed with considerably less suspicion by governments than in the immediate postwar years. However, NGOs tend to be viewed as service providers by government rather than partners. The government seems most willing to cooperate with NGOs in the areas of environmentalism, human rights, and refugee return. Initiatives on economic-related issues, such as the Poverty Reduction Strategy Program for Bosnia, began to give a number of NGOs a prominent role in consultative hearings. Yet NGOs and emerging policy research organizations still often encounter difficulties in receiving government access.

Some independent and smaller media report regularly on civil society but have only a limited reach. The larger media, tabloids and television, under-report on NGOs and at times even attack NGOs as damaging the national interests of the respective community. Altogether, reporting on NGOs has improved in recent years, and contacts between media and NGOs are more common. Still, the media more often depict NGOs as mere service providers than as organizations that reflect the broader interests of society.

The Constitution guarantees freedom of expression and association, and there are no explicit barriers to the participation of interest groups in politics. The Constitution also guarantees workers the right to join independent trade unions, and this right is respected. However, the country's difficult economic situation and entity governance system has hampered the work of trade unions and the ability to coordinate at the state (between the two entities of Bosnia and Herzegovina) or international level. The largest trade union, the Confederation of Independent Trade Unions of Bosnia and Herzegovina (SSSBiH)--which claims to represent workers from all of Bosnia but in fact comprises workers primarily from the FBiH--is the legal successor to the prewar trade union. In the RS, the Confederation of Trade Unions of the RS dominates. Although both trade unions agreed in September 2003 to form an umbrella organization in order to join the International Confederation of Free Trade Unions, such a joint structure was not yet established by the end of 2004. While unionization rates in the formal sector reached 70 percent in the FBiH during 2004, trade unions were generally weak owing to the large sector's informality and level of unemployment.

During 2004, trade unions were most vocal about the setting of minimum wages and collective contracts with employers. Yet trade unions have found it difficult to mobilize strikes given the country's poor economic situation. A demonstration in 2004 organized by the SSSBiH in Sarajevo against the new Law on Bankruptcy failed to draw the predicted tens of thousands of protesters. Instead, the union managed to mobilize only around 2,500 protesters, reported Dnevni Avaz.

Political and ethnic bias is a common feature of the Bosnian education system. In 2004, new cantonal education laws provided the basis for the integration of Bosniak and Croat schools. The OHR additionally imposed a fine on the HDZ for failing to implement the new laws. Despite these efforts to reunite the schooling system, there continue to be some 54 "two schools under one roof," where Croat and Bosniak pupils are taught separately, located in the Zenica-Doboj, Central Bosnia, and Herzegovina-Neretva cantons. A state-level Law on Higher Education--a precondition for Bosnian universities joining the European Bologna process and receiving World Bank funding--failed to pass the Parliament in May because of concerns by the HDZ over the autonomy of the Croat-dominated university in western Mostar.

Independent Media: 

Freedom of expression is protected by the Constitution, the Dayton peace accords, and international support. Yet in 2004, there were political and economic pressures on journalists and the media. Between March and September 2004, a hot line run by a journalists association recorded 20 complaints by journalists, mostly about being subjected to pressure and threats. One of the two most prominent cases involved threats by the SDA to change the board of FBiH public TV in an open attempt to influence the station's editorial policy. In particular, SDA deputies wanted the popular political program 60 Minutes dropped, as it had carried a number of reports critical of the party. In the second case, RS police chief Radomir Njegus attacked the RS public TV and the daily Nezavisne Novine in August, labeling journalists as state enemies and mentally ill. The attacks followed the media's accusations that the RS police do not arrest war criminals and are involved in organized crime. Njegus later apologized for the attacks after sharp criticism by the OHR. According to a June 2004 survey reported in Stability Pact's Media Legislation Update, more than a third of respondents believe that journalists are not free to report what they wish.

While libel and defamation have been decriminalized by the OHR, the defamation laws in both entities have been used to exert pressure on journalists through the threat of high fines. The laws abolished slander as an offense and reduced potential damages to the actual damage caused. This measure seemed to decrease the number of cases in 2004, as the relatively moderate damages awarded to plaintiffs were often only enough to cover court costs.

In Bosnia, there are separate regulations for electronic and print media. Electronic media are regulated by the now locally controlled Regulatory Agency for Communication (RAK). The change of name to RAK from Communications Regulatory Agency in 2004 marks the final step in transferring power to local control. The agency awards licenses to television and radio stations and can penalize stations for not adhering to rules governing electronic media, including fair programming and the prohibition against hate speech. In 2004, the RAK completed the licensing of television and radio stations by issuing long-term licenses (10 years for private and 2 years for public broadcasters). The RAK imposed sanctions in 47 instances, up from 11 in 2003. Most cases involved breaching the mandated preelection silence on reporting but also included hate speech and slander. According to the 2004 Mediaplan survey, the RAK also imposed the highest penalty to date on a television station (Alfa TV) in November 2004. In the run-up to the local elections in October, there were a total of 41 complaints against electronic media for breaking rules and regulations, focusing mostly on bias in favor of or against political parties, or for refusing to transmit campaign advertisements.

The print media are self-regulated through the Press Council of Bosnia and Herzegovina, established in 2000. This body has no power to impose penalties or suspend publication of media. As a consequence, it has been weak and largely ineffectual in addressing hate speech and breaches of the ethics code. In 2004, it received 10 cases and 19 complaints, but only a portion of the council's decisions on these cases was enacted. Particularly pronounced in 2004 were the continued conflicts among three papers: the leftist weekly Slobodna Bosna, the nationalist weekly Valter, and the tabloid Dnevni Avaz. Following a number of serious breaches of the ethics code by Dnevni Avaz--in particular breaking silence in a kidnapping case in 2004--the paper refused to recognize the council and threatened to set up its own council. Considering that the daily has the largest print circulation in Bosnia, this threat threw the work of the Press Council into serious doubt.

The media scene in Bosnia is marked by a large number of electronic media and a small, shrinking number of print media. According to the RAK, there are 147 radio and 42 television stations in Bosnia. Of these, there is 1 statewide public radio and TV station and 1 for each entity. As for print media, there are 146 regular publications in the FBiH and 79 in the RS. Of these, 8 are dailies, 15 weeklies, and the remainder published in longer intervals. Additionally, there are 3 major news agencies in Bosnia, ONASA and FENA in the FBiH and SRNA in the RS. While the former is an independent agency, the latter two are government controlled.

On the Bosnia media scene, electronic media are the most influential. The most popular television stations in 2003 and 2004 in the FBiH and the RS are the entity public broadcasters. In a Prizma survey, FBiH TV was indicated as the most watched station in the entity, with 67 percent of viewers. Other popular stations included OBN, the Croat state television HRT, as well as Hayat, and the Tuzla cantonal station. TV RS drew 48.2 percent of viewers in the RS, and the most popular private stations included BN, Pink, and Alternativa, as well as HRT and Federation TV. While some stations have cross-entity appeal, such as HRT and Federation TV, the television market is divided.

The public broadcast system, established through the Law on Public Broadcasting imposed by the OHR in 2002, is composed of state radio (BH Radio) and television (BHT1) and the public TV and radio stations of the entities. Originally providing programming only for the entity stations, BHT1 began transmitting on its own frequency in August 2004, reaching 90 percent of Bosnia. The new broadcaster's managing staff are widely considered to be professionals and politically independent. The public television system is financed through fees attached to citizens' phone bills. Reform of the public broadcasting system, based on a plan by BBC consultants, has met stiff resistance by journalists and politicians in both entities. The costs of financing the new public broadcaster and entrenched interests in the entities and their internal communities have been the main reasons for opposing a full-fledged statewide broadcaster. Because of this opposition, the Law on Public Broadcasting failed to pass the Parliament in October 2004.

The reach of quality print media in Bosnia has been seriously curtailed by the division of the country into entities; these individual markets are too small to sustain high-quality publications in the face of the country's overall economic difficulties. In addition, print media are constrained by the fact that about one quarter of the population is functionally illiterate. According to a 2004 Prizma poll, 43.6 percent of the population does not read newspapers.

The total print run of dailies in Bosnia is estimated to be below 100,000 copies, yet reliable and verified print run figures are largely unavailable. Of the seven dailies in Bosnia, most are not financially viable, with both coverage and quality suffering accordingly. The largest daily is the tabloid Dnevni Avaz (estimated in 2004 at 35,000 to 100,000 copies), which is read by 43 percent of the population in the FBiH, followed by Oslobodjenje (10,000 to 30,000 copies), which is read by 10.9 percent and was formerly the main and most respected paper in the country. Both are read primarily in predominantly Bosniak regions of the FBiH.

The only nationwide daily is the independent paper Nezavisne Novine (9,000 to 25,000 copies), read by 12.3 percent of the population in the RS. Despite its cross-entity reach in terms of coverage, its readership remains concentrated largely in the RS. This paper has been well-known for reporting on corruption cases and war crimes in Bosnia. The other RS-based daily is the state-run Glas Srpske, which is read by 9.7 percent of the population in the RS. In the FBiH, three additional dailies are published: the tabloid Jutarnje Novine and the local daily SAN in Sarajevo and Dnevni List in Mostar, the latter catering primarily to a Croat audience and read by 4.5 percent of respondents in the FBiH. Dailies from Croatia and Serbia are also widely read in Bosnia and some publish special editions for Bosnia.

Some weeklies have been influential in terms of their political reporting. While a majority of the population reads no weekly magazines (61.9 percent) and most weekly magazines are not political in content, the largest one, Slobodna Bosna (estimated 19,000 copies in 2004) has been well-known for its sharp critique of the international community and is read primarily in the FBiH, as is Dani (16,000 copies). Other important independent weeklies include Start in the FBiH and Novi Reporter in the RS. In addition, a number of nationalist weeklies exist but do not have a large readership (around 1 percent in either entity or less), including Ljiljan and Walter, both of which cater to Bosniak readers.

The concentration of media ownership is not a problem in Bosnia. All dailies and weeklies except Glas Srpske are privately owned, but few are independent. Some display a clear political bias as part of the editorial line, but many are subject to pressure from influential political parties and business interests. Considering the small advertising market and low sales, larger companies that are often tied to political interests have tremendous influence over print and electronic media.

Newspaper distribution is, unsurprisingly, divided along entity lines. The largest distribution system in the FBiH is OPRESA, which distributes publications from both entities and both neighboring states, although Serb and RS publications are not widely available in the FBiH. In the RS, the public company Oslobodjenje is the largest, distributing significantly more publications from Serbia and Montenegro than domestic ones and only a few titles from the FBiH. Oslobodjenje generally does not distribute Croatian publications owing to a dispute over a cooperation agreement.

Journalists and media are free to organize themselves in associations, but as elsewhere in Bosnia, ethnic divisions express themselves in this arena. In total, there are six journalists unions in Bosnia, two based in the RS, two in Mostar, and two in Sarajevo--a large number for a small country such as Bosnia. In a major move during 2004, three journalists associations linked with independent and less nationalist media from Mostar, Banja Luka, and Sarajevo to set up the Association BH Journalists as the first countrywide journalists association since the war.

The Internet has become increasingly available in Bosnia in recent years, but overall Internet penetration remains low. Some 150,000 persons, or 4.5 percent of the population, have private access to the Internet. In addition, many citizens, especially youth, access the Internet in Internet cafés and clubs. The numbers are still low: only 16 percent of the population has ever used the Internet, and the number of regular users ranges between 10 and 12 percent, according to the UNDP. There are a total of 40 Internet providers and no censorship or other restriction of the Internet.

Local Democratic Governance: 

New local laws in the RS, local elections, and the reunification of Mostar propelled public attention to reform on the local level. Local governance in Bosnia takes place at the level of municipalities and cities. Bosnia currently has 146 municipalities, 37 of which were formed during or after the war. Many of the postwar municipalities are peripheral and lack population centers (like East Mostar), emerging as a consequence of the boundary between entities rather than from economic, demographic, or social reasons. Likewise, local government takes different forms in the Bosnian entities. There is no statewide legislation on local government, and the Constitution makes no mention of democratic local government. As a consequence, there are 11 different laws on local government--10 in the FBiH and 1 in the RS. In addition, the district of Brcko--with around 70,000 inhabitants--is based on a prewar municipality but is governed by a specific set of laws. The prewar mjesne zajednice, which are submunicipal units for consultation and service, have generally been underutilized.

In an attempt to simplify local governance, new laws were drafted at the entity level in late 2004. Until these are passed, local government is overseen in the RS at the entity level, whereas in the FBiH a general framework law left cantons to define the specific competencies (and funding) at the municipal level. Both entities outline general principles of local self-government in their constitutions. Neither the state nor the FBiH has any competencies in regard to local government. Most cantons have passed separate laws on local self-government, which according to the Council of Europe comply with the European Charter of Local Self-Government. Municipalities often have substantial competencies in regard to education, basic health care, and urban planning.

At the same time, the cantons often retain key powers, such as the ability to dissolve local councils and appoint administrators in particular cases. The administration of the Croat-dominated Western Bosnia canton, for example, has been trying to financially squeeze the majority Serb municipalities of Drvar and Grahovo. In the RS, the originally limited powers of the municipalities have been enhanced in the 1999 Law on Local Self-Government. The law still falls short of European standards, as local councils can be dissolved or have their competencies reduced by the central government. The legislation has often been implemented to the disadvantage of municipalities. One particular point of contention between cantons and municipalities in the FBiH has been control over entity-run public utilities.

In the RS, municipalities are categorized into four groups according to levels of poverty and receive funding accordingly. In the FBiH, every canton has different criteria for disbursing funding to the municipalities. Municipalities in general have been underfunded and suffer from inadequate information on the share of taxes they are to receive from entity and cantonal authorities. At times, the cantons also amend the allocations to municipalities during the budgetary year, rendering financial planning for municipalities difficult. Only 10 percent of the sales taxes are transferred from entities and cantons to municipalities, although the share ought to amount to 30-40 percent, according to Transparency International. The discrepancy is a reflection of the imbalance of power between municipalities and entities/cantons. Thus, municipalities are usually unable to engage in larger projects such as modernizing local infrastructure, as they can generate income only through fines, fees, and minor local taxes.

According to the cantonal laws in the FBiH and entity law in the RS, municipalities generally do not have the right to reinforce their autonomy through judicial remedy, a requirement of the European Charter. Municipalities also have little room to determine their own institutional setup to meet local needs. The size of the municipal council is determined by the Law on Elections, based on the size of the population.

A key development in local government in 2004 was the unification of the city of Mostar. While much of the city's unification was still unrealized by the end of 2004, the symbolic merger proved some level of progress on local governance. Capital of the Herzegovina-Neretva canton, Mostar has been divided between a Bosniak- and a Croat-controlled part of town since the war. The division of the city into six municipalities (three Bosniak, three Croat) had long perpetuated the ethnic fragmentation of Mostar and rendered local government ineffective. All reform initiatives to politically integrate Mostar had failed by 2003, after which an OHR-appointed commission drafted a new statute for the city. The statute, imposed by the HR in January 2004, unifies the city into one municipality but keeps the separate municipalities and electoral units in an attempt to avoid dominance by the larger Croat community.

Also symbolic was a key Constitutional Court decision in February 2004 that declared the names of 13 municipalities (such as Serb Sarajevo) in the RS to be unconstitutional. The names in question had been changed during or after the war to mark Serb control. The court rejected the reference to exclusively one community and, after the RS failed to rename these municipalities, gave the municipalities ethnically interim names. These new names either restored the prewar names (such as Bosanski Brod instead of Srpski Brod) or replaced ethnicity with geographic specifications (such as Eastern Mostar instead of Serb Mostar). This decision, together with the unification of Mostar, has further eroded the ethnic exclusiveness of municipalities in Bosnia, but considering the demographic dominance of one nation in most municipalities today, these steps must be considered as chiefly symbolic.

The 2001 Law on Elections allows for the direct election of municipal councils and mayors (except in Mostar). In 2004, the Bosnian Election Commission organized local elections for the first time. Local elections held in October 2004 were deemed free and fair with only a few irregularities, according to the OSCE. Containing different electoral systems for entities, mayors, and councils, the law is complicated and challenging not only for voters, but also for candidates.

With a few regional exceptions, local politics tend to be dominated by the same political parties as at the entity and state levels. Unsurprisingly, voting takes place largely along ethnic lines, and few parties appeal to voters from different backgrounds. In the FBiH, the SDP was strong in Sarajevo and in Tuzla; and in the RS, the SNSD gained ground in urban centers (Banja Luka, Trebinje) and also in some rural areas. Otherwise, the three national parties dominated most local councils.

Turnout in local elections was lower than in state and entity elections. In 2004, turnout stood at 46 percent, down from 66 percent in 2000 and 87 percent in 1997, reflecting the general decline in turnout since 1996. In addition to direct elections of councils and mayors, citizens are able to express their position in referendums, and municipalities are encouraged to hold hearings and other consultative processes open to the public. Local town councils must conduct their meetings in public, and municipalities are equally bound by the freedom of information legislation. However, such practices, as well as the use of the Law on Freedom of Information, have been slow to change relations between citizens and municipalities.

Employment at the municipal level is often partisan and based on patronage. An ethnic bias has also been a feature of municipal governments in the past, although gross injustices have been somewhat reduced by the requirement that the composition of all public administrations must follow the 1991 census. As the ethnic composition of most municipalities was dramatically changed by the war, recruitment on the basis of the 1991 census sought to include returning refugees into local administrations. One side result has been that many municipal employees are not residing in their place of work, but continue to live as refugees in a different entity or canton.

Judicial Framework and Independence: 

The Constitution, with the exception of its human rights provisions, can be changed by a two-thirds majority in the Bosnian House of Representatives and a simple majority in the House of People. However, fundamental differences among Serb, Croat, and Bosniak deputies have prevented any constitutional reforms since the document came into force in 1995. In 2004, discussions over constitutional amendments gathered momentum, caused in part by the 10-year anniversary of the Dayton peace accords in 2005. But without consensus on the substance and need for constitutional reforms, changes appear unlikely. The constitutions of the RS and FBiH, both passed prior to the signing of the Dayton accords, are subordinated to the Bosnian Constitution.

The Constitutional Court is critical to upholding the state Constitution. It can rule on any constitutional dispute between the two entities or between the central government and the entities. The other state-level court is the State Court of Bosnia and Herzegovina, established by the HR in December 2000. This court is charged with cases that lie within the purview of the state, such as citizenship and foreign trade. In February 2004, the OHR created a section for organized crime, economic crime, and corruption within the State Court of Bosnia and Herzegovina. A special section with the same focus within the Office of the State Prosecutor was established in August 2004, and six international judges and two international prosecutors were named by the OHR.

The criminal codes have been reformed in both entities (FBiH: 1998; RS: 2000) and at the state level (January 2003) through the OHR. The state criminal code provided the legal basis for the State Court of Bosnia and Herzegovina. Despite these reforms, problems remain with law enforcement. International assistance through the UN and the EU has been only moderately successful in securing reform. Accordingly, in July 2004 the OHR established a police reconstruction commission with the task to unify and reform the fragmented police forces.

The Bosnian Constitution guarantees all key human rights and makes most international human rights instruments directly applicable in Bosnia. The Constitution further states that the European Convention on Human Rights applies in Bosnia and Herzegovina and takes precedence over other laws. Often, these standards are not implemented owing to a lack of specific legislation. For example, there is still no comprehensive antidiscrimination legislation, despite a formal state commitment to all relevant human rights instruments.

Bosnia has nine ombudsmen, three for each entity and three at the state level. The state-level ombudsman was established by the Dayton peace accords and detailed in the 2001 Law on the Ombudsman. In 2004, three state-level ombudsmen replaced the international ombudsman. The ombudsmen investigate complaints of alleged human rights violations, provide advice to individuals addressing the institution, and issue suggestions to relevant authorities on correcting their human rights shortcomings. The total number of pending cases was 3,084 between January and May 2004, 735 of which were inherited from the international ombudsman. During the first five months of 2004, the institution was able to resolve approximately two thirds of the cases and issued 14 recommendations to institutions. The high number of cases still reflects the importance of the ombudsman institution and also the administrative hurdles that most citizens encounter in everyday life in regard to housing, employment, and education.

A second key human rights institution has been the Human Rights Commission, part of the Constitutional Court, which in 2003 took over cases from the Human Rights Chamber. Unlike the ombudsmen, the chamber could make binding decisions in cases of serious human rights violations before closing in 2003. The commission itself resolved some 3,280 cases during its year of operation from January 2004 to January 2005, leaving the court with a backlog of 5,661 unresolved cases and no clear legal mandate to pursue these cases. To resolve this impasse, the Constitutional Court proposed a constitutional act on the Constitutional Court to broaden its mandate. At the level of the executive, there are ministries for human rights and refugees at the entity and state levels. The ministries are responsible for monitoring and implementing international human rights instruments and facilitating the return of refugees.

Enforcing the right of refugees and internally displaced persons (IDPs) to return to their former homes--a key provision of the Dayton accords--has been the greatest challenge to human rights in postwar Bosnia. In September 2004, the number of returned refugees had reached 1 million, with 1.2 million remaining displaced within Bosnia and around the world. The number of minority returns has declined dramatically, from 102,111 in 2002, to 44,868 in 2003 and 14,199 in 2004, according to the UN High Commissioner for Human Rights (UNHCR). The decline is related to the near completed process of property return, according to the Property Law Implementation Process of the OHR, UNHCR, and OSCE. While the process was not completed by January 2004, as originally planned, all property was finally restituted by July 2004 with the exception of some properties in Banja Luka and Donji Vakuf, both in the RS. In September 2004, the implementation rate had reached 92.71 percent, with only 615 open cases out of 198,307 where the property claims were upheld, pointing to a successful process of property restitution. With the near completion of property restitution, the return of refugees is most likely also reaching its end.

The protection of minorities outside the three dominant communities has been long neglected. Roma, the largest such minority (a population of 20,000 to 50,000 in 2003), have been particularly hard hit despite a 2003 law protecting national minorities. The transformation of the law into legal reality in the entities has exceeded the six-month deadline. Roma organizations have also criticized the requirement that minority protection extend only to those considered citizens, as many Roma in Bosnia lack Bosnian citizenship. The RS passed a minority law specifying regulations of the state law in September 2004, while the FBiH still lacks minority legislation.

According to changes in the Law on Elections passed by the Parliament in April 2004, there is one reserved seat on municipal councils for minorities larger than 3 percent of the population within the municipality. The committee is currently implementing the 2002-2006 framework plan in primary areas of concern for Roma. Despite these steps, overall government efforts and funding for Roma and other minorities remain minimal. Bosnia's state report on the treatment of minorities to the Council of Europe in February 2004 detailed efforts to improve the rights of minorities, but the council had not released a public assessment by the end of 2004.

The judicial system moved toward a less politicized and more professional judiciary during 2004. The Independent Judicial Commission (IJC), established in 2000 to oversee the reform of the judiciary, completed its work in March 2004. In the process of reform, the commission oversaw the merger of several courts and the reduction of judges by 28 percent, which at the same time contributed to judicial backlogs of up to three to four years. The High Judicial and Prosecutorial Councils, created in 2002, were merged into a single council by a parliamentary decision in May 2004, and the IJC staff and tasks were transferred to the council.

The council is responsible for the appointment of all judges (except the Constitutional Court) and prosecutors and can determine the size of courts, recommend judges to the entity constitutional courts, and discipline and remove judges and prosecutors. The reappointment process of judges includes vetting of the applicant's background during the war and in regard to corruption. These competencies and a clear appointment process constitute a major advancement. Critics have noted that owing to the number of decisions the council has to take, the process lacks clear recourse for those rejected and prevents thorough investigation of applications. Others, including the Helsinki Committee, have noted the lack of consultation with domestic organizations and experts in the reform process, reinforcing the external imposition of reform.

A key aspect of legal reform in Bosnia has been to address the legacy of the war. In the past, efforts to address war crimes have been limited largely to the International Criminal Tribunal for the Former Yugoslavia (ICTY). Cooperation with the ICTY in the RS has been minimal, although in 2004 the police of the RS raided several locations and arrested a number of low-profile war criminals. In May 2004, six high-level indicted Croats, including former Bosnian foreign minister Jadranko Prlic, surrendered voluntarily to the ICTY and were temporarily released a few months later pending trial. Yet the two most indicted war criminals, Radovan Karadzic and Ratko Mladic, remain at large.

The War Crimes Chamber in the State Court of Bosnia and Herzegovina became operational in 2005 after an extended setup period, taking over lower-level cases from the ICTY. While a national war crimes court has been generally welcomed, human rights organizations have criticized the process for a lack of planning and insufficient involvement of local human rights and victims groups.

In December 2003, a commission was established in the RS to investigate the mass murder of approximately 8,000 men in Srebrenica in 1995 under pressure of the OHR. The final report, published in October 2004, acknowledged the mass murder and led to an RS government apology for the events in Srebrenica in November 2004. A Truth and Reconciliation Commission (TRC) has been under discussion for years in Bosnia, originally proposed by NGOs. A draft law has been in parliamentary procedure since 2001, but there is a lack of political will to establish a TRC with the power to investigate human rights violations that occurred during the conflict.

Corruption: 

Corruption in Bosnia has become a major focus of attention for the international community and domestic media in recent years. The bureaucratic legacy of the Communist period and the monopolistic rule of national parties reinforced opportunities for corruption, as did the massive foreign aid flowing into Bosnia. Governments at the state and entity levels have been largely following international pressure to address corruption, and most efforts have been ad hoc and uncoordinated. The first action plan by the entity and state governments was developed in December 2002 and amended with an implementation timetable in October 2003. According to Transparency International Bosnia, by mid-2004, 40 percent of the initial action plan had been implemented in legislation, but in many other respects, the governments have failed to meet the deadlines they set themselves. The lack of cooperation among the governments at entity, cantonal, and state levels has often exacerbated the susceptibility of Bosnia to corruption.

Since 2000, a number of legislative reforms have sought to prevent corruption, including provisions in the 2001 Law on Elections, Law on Public Procurement, and Law on Conflict of Interest. The Law on Conflict of Interest, which came into effect in 2002 after being imposed by the OHR, regulates conflicts of interest for elected and executive officials and advisers. Transparency International has pointed out that the law is applied only selectively and many cases go unpunished because of the small size of the Bosnian Election Commission and the weak instruments at its disposal. The law covers 5,057 officials and about 130,000 persons (if relatives covered by the law are included), with only 1 full-time investigator employed by the commission.

In addition to elected and appointed officials, political parties are obliged to file regular financial reports. The Law on Elections, passed in August 2001, obliges parties and candidates to disclose all resources and donations. Most major parties have been accused of receiving contributions exceeding the limit of eight average monthly salaries (approximately US$1,850) as individual donations from companies and wealthy individuals. Low party membership and salaries that barely meet living expenses have forced parties to lower (and in some cases waive) membership dues, which in turn requires them to solicit alternative financing. Consequently, misreporting by political parties is common, and the full financing of parties remains unclear.

In July 2004, an international auditor report on the SDS, commissioned by the OHR, revealed numerous cases of corruption and abuse of resources by the party, including the free use of municipal property and the failure to pay for public utilities, as well as unclear and incomplete reporting of income. While the report did not reveal evidence that the party was financing Radovan Karadzic, it did demonstrate the lack of financial transparency in the SDS, which is likely to be similar in other dominant parties in Bosnia.

Domestic auditing institutions at the entity and state levels are key to combating corruption. While the state and RS auditing offices are said to be effective and impartial in their work, Transparency International reports that the FBiH office has been criticized for not being fully independent politically. Partly as a result, the OHR appointed a number of international audits to investigate high-profile cases in the energy and telecommunications sectors during 2003, areas that had been neglected by the domestic auditing offices. While instrumental in investigating corruption, the international audits have been criticized for undermining the development of domestic structures, as they receive greater attention and resources but cannot constitute a long-term replacement for domestic institutions.

A 2004 audit report on state-level institutions noted that there is a lack of regulation regarding the use of funds, allowing for corruption and abuse of resources. According to the report, some 40 to 50 percent of the state budget is not subject to adequate rules and laws. Audits in 2004 at the entity level revealed continued loopholes in the regulations and breaches of laws in regard to public spending, reported Nezavisne Novine.

In addition to new cases of corruption and abuse of resources revealed in 2004 through audit reports, a number of cases made public in 2003 continued to dominate the headlines in 2004. An auditor's report published in 2004 confirmed the misuse of funds at the RS-owned logging and wood-processing company Srpske Sume. Subsequently, the director was dismissed by the HR for possible involvement in the financing of indicted war criminal Radovan Karadzic.

The reform of the civil service in recent years resulted in the creation of new laws on the civil service and the establishment of state and entity agencies in 2002 and 2003. These agencies have set up clear and transparent recruitment practices and have publicized job advertisements consistently. Public procurement, on the other hand, has been more problematic. There is no legal framework at the state level, allowing for the aforementioned waste of money in the state presidency. Regulations at the entity level have been in place since 1998 for the FBiH and since 2001 for the RS, but these are often incomplete and contradictory. However incomplete, public procurement procedures have been largely enforced in recent years owing to the work of the auditing organizations. The EU has furthermore funded the Customs and Fiscal Assistance Office, which unified the Bosnian customs and tax systems, increasing the entity (and thus state) budgets and reducing opportunities for corruption, in particular in connection with goods smuggled into Bosnia.

Most anticorruption efforts in Bosnia are conducted by civil society, primarily the Bosnian chapter of Transparency International, which has been active since 2001, and the OHR, which has investigated corruption cases through its Anticrime and Corruption Unit. The latter primarily assists local institutions and aims at initiating criminal proceedings against individuals involved in corruption.

There has been increasing awareness of corruption in Bosnian society in recent years. Corruption accusations carry weight and have been potent means to discredit politicians. At the same time, the increasingly common charges of corruption have undermined voters' resolve to base electoral choices on corruption allegations. More than half of Bosnian citizens indicated in a June 2004 OSCE opinion poll that they believe almost nothing or only a little of media reports on politicians.

A 2004 opinion poll by Transparency International Bosnia indicates that citizens consider the entity governments most corrupt, followed by the state-level government and the presidency. The governing parties (SDA, SDS, HDZ) and the SNSD in the RS are considered to be the most corrupt parties in the country. The victory of these parties at the local elections demonstrated that despite concern for corruption in Bosnia, voters have disregarded party corruption either because other issues are of greater concern or because all parties are considered corrupt, differing only by opportunity.