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SIGMA Assessment-PAR in B&H

Public administration

The public administration is overall characterised by its ineffectiveness at the State level and by its politicisation in RS and FBiH. The multiplicity of governments, and their internal staffing and organisations, make governance as a whole a severe drain on national resources. The notion of public management - which means skills, authority, responsibility and accountability - is not understood; the merit principle is not assured in staffing and staff are under-qualified. Since the last Sigma assessment, positive developments in civil service and administrative law have generally been limited and uneven across BiH, with Republika Srpska progressing more rapidly than the State level, FBiH, and the Brcko District. Efforts to reform the public administration in BiH have little or no political support from the domestic political forces and have failed to address the acute problems of the administration.
Public expenditure management developments in BiH over the last year were mainly influenced by a Standby Agreement (SBA) with the IMF, to address a severe drop in public revenues and the fragility of the FBiH's position in particular. The arrangement calls for a range of reforms in both entities and requires (among other measures) the adoption of a new Law on Salaries for public sector employees, a Law on Fiscal Responsibility to ensure that no law is adopted without prior analysis of the fiscal implications, and a range of legislation regulating the issue of transfer payments for war veterans and other social categories. The SBA also requires cuts to the wage bill, budget adjustments, and some amendments to the organic budget laws.
However, the lack of co-ordination between the different levels of government in the budgetsetting process (e.g. agreement on appropriate fiscal parameters) and at the budget execution level (e.g. lack of co-ordination in the development of treasury systems), together with weak budget planning and management capacities at all levels, seriously weakens the system.




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June, 2018

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