Foreign aid in a divided country: Subnational aid allocations in post-conflict Bosnia and Herzegovina

Our paper examines the sub-national distribution of aid in the context of Bosnia and Herzegovina’s ethnically diverse population, uneven socio-economic performance, and complex administrative system. The research builds on a unique dataset of geolocated projects and project activities of the ten key bilateral and multilateral donors in Bosnia and Herzegovina. We examined (i) the spatial distribution of aid among the municipalities of BiH, both from individual donors, and in aggregate, and (ii) factors associated with the distribution of aid. The results suggest that donors give little attention to development needs in their aid allocations, as they allocate more aid to municipalities that are better off. As such, their aid contributes to spatial inequalities with potentially destabilizing effects. On the other hand, we found no significant evidence that donor aid allocations at the aggregate level were biased by ethnic considerations, although we cannot rule out (geo)political factors. Finally, the paper reveals different patterns of aid among individual multilateral and DAC donors. The paper is the first of its kind to examine sub-national aid allocations in the Global East.