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Results BriefsMay 16, 2024

Improving Governance for Better Public Services in Bosnia and Herzegovina

BiH Governance

Photo: Piloting TEACH tool, Zenica, Bosnia and Herzegovina, 2023.  

World Bank

Between 2018 and 2023, the World Bank’s technical assistance helped the authorities in Bosnia and Herzegovina (BiH) to strengthen public sector performance and enhance quality in the provision of public services through analytics and capacity building focused on staffing, pay, and service delivery in the largest government sectors, namely health and education, and critical public administration functions at central government levels.

Key Highlights

  • A series of World Bank assessments of BiH’s health, education, and public administration sectors (2018-2023) led to critical reforms that will improve the efficiency, effectiveness, and quality of public services for all, strengthen economic development, and boost European Union (EU) accession.
  • The comprehensive health sector reform that the authorities in BiH are now implementing with World Bank support will lead to increased quality of services and improved financial sustainability of health sector, thereby contributing to better health outcomes.
  • In the education sector, the World Bank's support has equipped the authorities in BiH with key tools, capacity building, and knowledge to improve education services and introduced innovative approaches to workforce management.
  • Following the World Bank's thorough e-Government assessment, the Government of the Republika Srpska developed a clear roadmap to embark upon a digital transformation of public services.
  • A novel public sector labor market study identified weaknesses in employment practices and key opportunities to improve them through better human resources and wage management, and connecting people to jobs.
  • Authorities are using the World Bank’s recommendations to strengthen critical public administration functions for EU accession. The country was granted EU candidate status in December 2022.
  • The World Bank’s analytics and advice on better wage-bill management informed the Republika Srpska’s legislation on central registry of public sector employees.


Bosnia and Herzegovina (BiH) has overcome many setbacks in the last few decades, enabling it to thrive economically and become an upper middle income country that aspires to EU accession. However, the country’s highly decentralized governance, embedded in its post-war constitution, reinforces political instability, and hampers progress on much-needed structural reforms. The public sector is oversized and inefficient, comprising about 40% of all salaried workers, and wage-bill as a share of gross domestic product is among the highest in the world. Despite the public sector’s size and cost, quality of services is subpar especially in the largest sectors of health and education. Public administration reform is a priority for fiscal sustainability, a more effective government, and the country’s integration into the EU.


The World Bank, in partnership with the European Commission, worked with the authorities in BiH to strengthen public performance and enhance quality in the provision of public services by improving public employment data and rebalancing staffing and pay in the public sector. The World Bank’s advice and evidence-based analyses of staffing, pay, and service delivery in the largest sectors, namely health and education, and critical functions at central government levels, informed significant and challenging public sector reforms to improve the efficiency and productivity of the central government and public services in key sectors. In response to the COVID-19 pandemic and the authorities’ evolving priorities, the World Bank’s support was adjusted to focus more on digitalization of government operations for sustained service delivery.

A major component of the World Bank’s support were functional reviews, which provided recommendations for service efficiency and quality improvements in the health and education sectors (2018-2023) and for strengthening institutions for EU accession (2022-2023). In response to the COVID-19 pandemic, the reviews were expanded to focus on e-Government (2021-2023). The recommendations from the functional reviews informed a comprehensive health sector reform currently undertaken by both entity governments and a roadmap for digitalization of government services in Republika Srpska. They also triggered the governments’ interest in strengthening human capital through education sector reforms.


  • BiH authorities endorsed the recommendations and novel approaches to improving workforce management and service delivery, such as the pay-for-performance and classroom observations. Thirty employees of pedagogical institutes and other government agencies were trained and certified in using the World Bank's TEACH, a free classroom observation tool that helps countries collect data on teaching practices to improve teaching quality, which was a novel program of support for BiH. The pedagogical institutes’ employees utilized the tool to measure pedagogical practices in 76 primary schools (in both rural and urban areas) in five cantons in BiH, covering 379 classrooms and 6,346 (2.4%) of students. Pedagogical institutes are using the results of these observations to improve their methodologies for pedagogical supervision and to strengthen and better plan teachers’ professional development.
  • The functional reviews informed a comprehensive health sector reform to improve quality of care and financial sustainability of health sector (2022-2029). The reform is supported by the World Bank’s $100 million development policy financing and $75 million investment support, complemented by $6.4 million in technical assistance financed by the European Commission and Swiss Development Cooperation. The Republika Srpska has adopted new legislation on central registry of public sector employees (2018) to strengthen employment and wage bill controls through better data management. It also integrated 18 primary health care centers into the government’s central treasury system (2022), strengthening expenditure controls to reduce the health sector arrears.
  • The Republika Srpska endorsed the World Bank’s recommendations to facilitate digital transformation, established a central Agency for Information and Communication Technology, and expressed interest in the World Bank’s follow-up support to the government’s digitalization agenda (2023). A country-wide e-government assessment supported by the World Bank’s Gov-Tech Trust Fund is underway to inform a roadmap for a country-wide digitalization reform (2023-2024).
  • Authorities are using the World Bank’s recommendations to strengthen critical public administration functions for EU accession. BiH was granted EU candidate status in December 2022.
  • The World Bank’s public sector labor market study (2019-2023), informed by a household survey, explored how the public sector employment practices affect jobs and service delivery. The World Bank’s recommendations for better human resource and data management, use of digital technologies, and connecting jobs to people (such as through socio-economic measures to incentivize female employment and by adjusting recruitment practices to increase job seekers’ incentives to take private sector jobs) will be used to inform the country’s jobs agenda.


One World Bank in Action

The World Bank’s in-depth assessment of the enabling environment for e-government built on the results of previous support from the International Finance Corporation (IFC) that enabled digital transformation to improve the investment climate in BiH. The current assessment used the knowledge generated by the previous assessment, as well as lessons learned from its practical implementation. The recommendations for strengthening key digital enablers and e-services were informed by the IFC’s support to the establishment of the government’s interoperability framework and integrated online business registration systems, as well as to piloting of an e‐construction permitting system (2018).

World Bank Group Contribution

The project was financed by the European Union (EU) through the Single Donor Trust Fund, with an amount of €3.1 million. The World Bank received the full contribution.


The World Bank’s multidisciplinary team of governance, public sector, financial management, health, and education experts worked with ministries and agencies responsible for public administration, finance, health, education, and statistics at the state and entity-level, as well as in selected cantons. Collaboration with the European Commission was critical for mitigating substantive political and governance risks and raising awareness and support to difficult public administration reforms. Collaboration with other development partners and partnerships with non-governmental organizations and academia helped leverage knowledge and synergies. Extensive client engagement has led to creating significant commitment and interest, not only in the continued support from the World Bank but in the structural investment to make larger changes.

Looking Ahead

The project demonstrated how small interventions across sectors can showcase where development is possible and make incremental change, even in a country like BiH with a complex history and constitutional arrangements. The project’s results are being scaled up through the World Bank’s ongoing financial and technical support to health sector reform, leveraging substantive donor contributions, and technical assistance to digitalization of government services. Dialogue with the BiH authorities has pointed to the necessity and urgency of increasing human capital, including through education reforms. The World Bank will continue using its convening power and financial incentives to work with the authorities and development partners to ensure sustained implementation of these reforms.