Abstract
The Dayton agreement included a carefully designed intergovernmental structure in the plan for bringing the hostilities in Bosnia and Herzegovina to an end. This paper describes the resulting high degree of subsidiarity in the government and investigates its consequences. the very devolved government structure combined with the sociological federalism in operation have resulted in inefficiencies in service delivery, diseconomies of small scale, and large horizontal imbalances, at least in the short run. Further, the highly decentralized government, though essential to reaching an initial agreement, does not appear to have enhanced the prospects for solidarity. Still, pressure from the international community, and specifically the EU, together with the recommendations identified in this paper are important steps in fostering nationhood for Bosnia and Herzegovina.
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