The Economic System of Bosnia and Herzegovina: An Analysis

What is the economic system of Bosnia and Herzegovina? The economy of Bosnia and Herzegovina is based on a mixed economy. The country’s economic system combines elements of a market economy and a planned economy.

In Bosnia and Herzegovina, the economy comprises a private sector, consisting of individuals and businesses that make autonomous decisions based on self-interest, and a public sector, where the state determines the production and distribution of certain goods and services. No country is purely capitalist or purely communist.

What do the freedom indexes tell about the economic system of Bosnia and Herzegovina?

Now, to determine if a country is primarily a market economy or a planned economy, it is useful to examine some economic indexes. For instance, according to the 2026 Index of Economic Freedom, which measures the ability of every human to control his own labor and property, Bosnia and Herzegovina scored 63.1 out of 100, ranking 61st globally, indicating that the country has a moderately free economy.

In a similar way, the 2026 Freedom House index evaluates the state of political rights and civil liberties globally. Generally, market economies tend to align more with democracy and freedom, while command economies tend to be characterized by greater state control and fewer democratic and civil liberty protections. Bosnia and Herzegovina gets a score of 54/100 (As of 2026), which qualifies it as Partly Free. Bosnia and Herzegovina is considered to have a government that does not control what people do, and people can make their own economic decisions, but it is only considered an electoral democracy, lacking full liberal democratic protections.

The Link Between Public Sector Employment and the Economic System of Bosnia and Herzegovina

An indicator of the extent to which the State is involved in the economy is the number of public sector employees. In Bosnia and Herzegovina, according to ILOSTAT, the number of public sector employees as a percentage of the total workforce is 24.3% (2023). In the country’s mixed economy, the number of public sector employees as a percentage of the total workforce varies based on the specific policies and practices adopted by the State. Some economic activities are left to the private sector while others are under government control. The bigger the public sector the closer is the economy to being a command economy.

What does the biggest company in Bosnia and Herzegovina say about the country’s economic system?

The biggest company in Bosnia and Herzegovina should also be looked at, as well as whether it is a state-owned or private company. In this case, Bingo d.o.o. (headquartered in Tuzla) is the largest company in Bosnia and Herzegovina by revenue, generating approximately €1.115 billion in revenue in 2024. It is a privately owned retail and distribution company, reflecting the growing role of the private sector in the country’s mixed economy.

The historical factors that have influenced the economic system of Bosnia and Herzegovina

The current mixed economy of Bosnia and Herzegovina is a result of a combination of external factors and internal policies. External factors include the influence of the former Yugoslavia and its socialist economic system, as well as the effects of the Bosnian War of the 1990s and the subsequent peace agreement. Internal policies have included a focus on privatization and the introduction of free-market reforms, as well as efforts to promote economic growth and development.

Sources

• List of countries by the public sector size
• ILOSTAT Bosnia and Herzegovina country profile
• 2026 Index of Economic Freedom — Bosnia and Herzegovina
• Freedom in the World 2026 — Bosnia and Herzegovina
• Bingo d.o.o.

Last updated: June 20, 2026