Rethinking Transitional Justice in Bosnia

Following the 1992-95 Bosnian War, which killed 100,000 people and produced the Srebrenica genocide—Europe’s worst atrocity since World War II—the international community undertook one of the most intensive international reconciliation efforts of the post-Cold War era. More than 30 years later, Bosnia is still widely labeled a “frozen” conflict in Western policy circles, think tank analysis, and media coverage.

The United States and European Union have treated constitutional reform and war crimes accountability as the primary metrics of progress in Bosnia and Herzegovina (BiH). The U.S. State Department has listed goals of a “pluralistic and inclusive society” and “improved socio-economic conditions” as entirely separate tracks with no institutional linkage. Bosnia lost access to more than 108 million euros (about $127 million) in EU funds in 2025 for failing to adopt its performance-based reform agenda on time and risks losing an additional 374 million euros ($441 million) if conditions aren’t met by December.

While governance and social reform efforts are essential, these measures have hardened into extreme standards. If Bosnia has not unified its narratives of the past or produced visibly contrite leaders, Western logic goes, then it has “failed” at reconciliation. By that measure, Bosnia may always register as a failure.

But Bosnia’s most consequential peace process is not happening in ministries, courtrooms, or internationally sponsored dialogue sessions. It is unfolding in factories, logistics hubs, municipal utilities, and cross-entity supply chains—in the daily economic life that keeps the country running. This is demonstrated by persistent economic growth and bolstered by survey data showing increased levels of ethnic integration.

Washington’s and Brussels’s category errors are resulting in a misallocation of resources, distorting genuine reconciliatory progress, and constraining future gains. The fact that cross-entity economic life has continued to function through one of Bosnia’s most serious constitutional crises since the war’s end is itself the most compelling evidence that economic interdependence is succeeding where the political-legal framework is not.

This has important implications for transitional justice more broadly. Future postconflict frameworks should recognize less visible forms of coexistence that make renewed violence materially harder, treating shared economic life itself as an arena for reconciliation.

Bosnia emerged from its civil war divided into the Federation of Bosnia and Herzegovina (majority Bosniak and Croat) and Republika Srpska (majority Serb), stitched together by the 1995 Dayton Agreement. The three main ethnic communities retain separate media, education systems, and nationalist parties. The International Criminal Tribunal for the former Yugoslavia, facilitated by the United Nations from 1993 to 2017, indicted 161 individuals and secured 90 convictions across all parties to the conflict.

Despite persistent political crises and nationalist rhetoric, Bosnia’s economy has grown an average of roughly 3 percent annually over the past decade. Bosnia has posted real growth every year for more than a decade except 2020, when it contracted less debt than most European peers.

That growth rests on a dense web of economic relationships that transcend political boundaries. National electricity transmission company Elektroprenos BiH is jointly owned; Bingo Group, Bosnia’s largest private employer, operates more than 230 stores and employs nearly 9,000 workers across both entities. Though politicians may treat communities as separate worlds, they are connected by transport corridors, telecommunications systems, and supply chains, while workers commute and firms recruit across ethnic and administrative borders.

Working for the U.S. Agency for International Development (USAID) in Bosnia and Herzegovina from 2019 to 2022, I experienced how market incentives and daily necessity push people to cooperate and how increased contact changes perceptions. A 2023 USAID survey found that 87 percent of Bosnians had contact with members of other ethnic groups; 24 percent reported such contact every day. Among Bosnians with regular cross-group contact, 47 percent reported trusting people from other ethnic groups; among those without such contact, only 22 percent did.

While the survey data indicates correlation rather than direct causation, interethnic economic interactions have been a norm in Bosnia since 1995. After COVID-19, studies of local economies demonstrated that interethnic interactions were key to entrepreneurship and economic recovery.

Economic collaboration gives people something to lose. When families build businesses and communities invest in shared infrastructure, the calculus of conflict changes. That process produces practical habits of coexistence and an identity foundation: A Bosniak supplier and a Serb contractor conducting business, for example, builds the incremental trust that eventually makes political reconciliation possible. Reparations address the past, but economic opportunity builds a stake in a shared future.

Bosnia’s nationalist politicians understand this even if Western policymakers do not. Former Republika Srpska President Milorad Dodik spent years threatening to secede from BiH state institutions while his family’s business network extracted information technology and engineering contracts from those same institutions. Even the architects of division know that economic integration is too valuable to sacrifice on the altar of identity politics.

Small and medium-sized enterprises, or SMEs, are the backbone of the economic integration process, generating nearly 63 percent of Bosnia’s total value added and 69 percent of its employment (both figures above EU averages). These companies are not large corporations insulated from social tensions but family and community businesses whose survival depends on finding customers, suppliers, and workers.

Bosnia’s diaspora reinforces this integration. Nearly 2 million Bosnians live abroad, and remittances reached a record of roughly $2.6 billion in 2025. Since 1994, approximately $12 billion in foreign direct investment has entered the country. Austria, Croatia, and Serbia are consistently among the top source countries, with firms operating in Bosniak-, Croat-, and Serb-majority areas alike.

Bosnia’s political situation is deeply unstable. In Republika Srpska, leaders have openly defied state authority, defying Bosnia’s courts and law enforcement while fueling successionist pressure. Ahead of general elections in October, Croat parties are advancing ethnic-based electoral reforms that have repeatedly blocked government formation. Dayton’s constitutional framework bars citizens who do not identify as Bosniak, Croat, or Serb from standing for certain offices, a provision ruled discriminatory by the European Court of Human Rights in 2009.

But what is most striking is that cross-entity economic life has continued through it all. Ongoing political crises have not stopped trucks from crossing the Inter-Entity Boundary Line or shuttered Bingo stores in Republika Srpska. Where high-level political processes have stalled and elite brinkmanship has intensified, this quiet structural work is one of the main reasons the country has remained peaceful.

The lesson for any postconflict or ethnically divided society is that economic interdependence is a defense against separatist politics. Even though Croatia and Serbia have actively supported political projects testing Dayton’s boundaries, Croatia is Bosnia’s single largest foreign investor, and both Croatia and Serbia are among Bosnia’s top trading partners. Neither country has pushed harder on irredentist schemes because territorial redrawing would rupture economic relationships.

By contrast, Russia’s irredentist project in eastern Ukraine was successful because it found purchase in a region where economic and political identity had never been aligned, where Soviet-era industrial ties pointed east and appeals to Russian belonging filled a vacuum that no shared Ukrainian economic future ever occupied. With no stake in a common economic future, boundaries of belonging can be more easily exploited and redefined.

In Syria since the fall of Bashar al-Assad in December 2024, donors have pledged billions of dollars in reconstruction aid conditioned on political and human rights benchmarks. But applying Bosnia’s two-track model to Syria forfeits a key reconciliation tool. In a country where sectarian identities cut across geography and livelihood, whether reconstruction builds shared economic dependencies or entrenches divided communities may matter more for long-term coexistence than formal truth and justice processes.

The international community need not reinvent its approach to reconciliation. However, it must recognize and build on the Bosnia model already taking shape—and change its metrics of measurement and reward.

First, reconciliation scorecards should track cross-entity trade, mixed employment, joint municipal services, and shared infrastructure governance alongside constitutional benchmarks and human rights indicators, which already exist in USAID survey data and World Bank reporting.

Second, European and international financial programs should make cross-group economic cooperation a core objective. Reparations and recovery funding should favor joint enterprises and shared services over parallel ones. Municipalities that coordinate water, waste, and energy across entity lines should be rewarded, as should SMEs that source suppliers, workers, and customers from both communities.

Third, policymakers should retire “frozen conflict” language. Bosnia may face the same ethnic power-sharing disputes, elite obstruction, and Dayton framework three decades on—but beneath that surface, cross-entity economic ties remain dense and successful.

Future transitional justice mechanisms should also evolve. Reparations programs should prioritize joint enterprises and shared services, while truth and reconciliation commissions could document how former adversaries are economically interdependent and make formal recommendations to governments and donors to channel reconstruction funds accordingly.

Implementation need not be complex. Postconflict economic assessments should include interdependence audits to map cross-community supply chains and services. Infrastructure contracts in mixed areas should require cross-community subcontracting, drawing on the same mechanisms the EU already uses in its procurement rules. Tax incentives rewarding cross-community hiring and joint ownership could build on enterprise zone policies already existing in dozens of postconflict contexts.

Though Bosnia’s politics remain brittle, daily economic cooperation demonstrates that reconciliation is advancing. The Bosnia model implores policymakers to measure and protect the shared dependencies that keep people invested in peace and to build future reconciliation frameworks around those dependencies from the start.