{
  "title": "Bosnia and Herzegovina: Selected Issues",
  "publication": "IMF Staff Country Reports, October 28, 2015",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2016/12/31/bosnia-and-herzegovina-selected-issues-43368",
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  "summary": "This Selected Issues paper analyzes government spending in Bosnia and Herzegovina (BiH). The size of the public sector in BiH is one of the largest in the region, owing mainly to a complex and highly decentralized governance structure.",
  "sections": [
    {
      "heading": "Main findings on public spending",
      "content": "- The size of the public sector in Bosnia and Herzegovina (BiH) is one of the largest in the region.\n- The large public sector largely reflects a complex and highly decentralized governance structure.\n- BiH allocates a greater share of public resources to current spending items, notably wages and social transfers.\n- Poorly targeted social benefits create adverse incentives affecting informality and labor force participation."
    },
    {
      "heading": "Analysis of spending composition and implications",
      "content": "- Current spending priorities (wages and social transfers) limit fiscal space for investment in human and physical capital.\n- Decentralization contributes to fragmentation of spending responsibilities and hampers efficiency.\n- Incentive effects from the social benefit system reduce labor market participation and sustain informality, undermining potential growth."
    },
    {
      "heading": "Policy recommendations",
      "content": "- Refocus public spending toward human and physical capital to enhance economic growth.\n- Increase spending efficiency across levels of government, addressing fragmentation from decentralization.\n- Reform social benefit targeting to remove adverse incentives that discourage labor force participation and encourage informality.\n\nSource: IMF Staff Country Report — Bosnia and Herzegovina: Selected Issues\n\n---\n\n Content in this bundle\n\n- Bosnia and Herzegovina: Selected Issues; IMF Country Report 15/299; October 9, 2015\n  - Bosnia and Herzegovina: Selected Issues; IMF Country Report 15/299; October 9, 2015 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Bosnia and Herzegovina: Selected Issues; IMF Country Report 15/299; October 9, 2015 (PDF){rel=\"external\" type=\"application/pdf\"}"
    }
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  "bullets": [
    "[Markdown version](/en/publications/cr/issues/2016/12/31/bosnia-and-herzegovina-selected-issues-43368/index.md)",
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    "Published: October 28, 2015",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9781513578835.002",
    "The size of the public sector in Bosnia and Herzegovina (BiH) is one of the largest in the region.",
    "The large public sector largely reflects a complex and highly decentralized governance structure.",
    "BiH allocates a greater share of public resources to current spending items, notably wages and social transfers.",
    "Poorly targeted social benefits create adverse incentives affecting informality and labor force participation.",
    "Current spending priorities (wages and social transfers) limit fiscal space for investment in human and physical capital.",
    "Decentralization contributes to fragmentation of spending responsibilities and hampers efficiency.",
    "Incentive effects from the social benefit system reduce labor market participation and sustain informality, undermining potential growth.",
    "Refocus public spending toward human and physical capital to enhance economic growth.",
    "Increase spending efficiency across levels of government, addressing fragmentation from decentralization.",
    "Reform social benefit targeting to remove adverse incentives that discourage labor force participation and encourage informality.",
    "**Bosnia and Herzegovina: Selected Issues; IMF Country Report 15/299; October 9, 2015**"
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