Socio-economic aspects of peacebuilding: corruption, informal labor and brain drain in Bosnia and Herzegovina

Abstract

More than a decade after the Dayton Peace Accords, the question remains whether peace in Bosnia and Herzegovina (BiH) will sustain. Assuming that the economic prosperity plays a crucial role for a successful peacebuilding process, this Working Paper addresses the potential and the risks of economic development, focusing on three particular aspects: corruption, informal labor and the brain drain phenomenon. Rob Scheid shows that corruption is an endemic problem concerning governance, civil society, and the economy in BiH. He outlines examples of the various forms corruption takes and discusses steps taken to combat this issue, arguing that corruption’s detraction from economic development prolongs the peacebuilding process. Julika Bake deals with the phenomenon of illicit labor, which is seen as one of the major obstacles to economic prosperity in BiH. She argues that besides macroeconomic recovery and labor policy, the links between local political elites and informal employers have to be taken into account to successfully create formal employment. Simon Runkel addresses the difficult labor situation of young people and the resulting emigration, particularly of the well educated. In his opinion, reforms in the fields of education as well as private investment are necessary to facilitate the return of emigrants and to benefit from the positive long-term effect of the so-called brain drain phenomenon. All three sections of this Working Paper hold that the peacebuilding process would benefit to a great extent from the strengthening of formal economic relations, the weakening of links between the economic and political spheres, especially on a local level, as well as from the creation of job opportunities. Although economic prosperity and sustainable development often seem beneficial they do not appear to be a primary concern in peacebuilding. This paper shows that economic aspects are crucial to the question of whether peace will stay and last in Bosnia and Herzegovina.