Effects of the Washington Consensus on the Macroeconomic Stability of Bosnia and Herzegovina

Merim Kasumović 1  and Dino Hadžialić 2
  • 1 Faculty of Economics Tuzla, Bosnia and Herzegovina
  • 2 Indirect Taxation Authority of Tuzla, Bosnia and Herzegovina

Summary

With regard to the specific situation and problems in Bosnia and Herzegovina this paper will analyse the effects caused by adhering to the rules of the Washington Consensus, and thus will determine to which extent they have influenced the stability of the macroeconomic indicators in Bosnia and Herzegovina and will explain how the rules affect the stability of macroeconomic indicators of Bosnia and Herzegovina. The main thesis of the Washington Consensus is that by following the measures of the same the macroeconomic situation in the country becomes more stabilised. However, stabilization often cannot sustain in the long term and this situation in the economy can be regarded as quasi-macroeconomic stability.

The application of the Washington Consensus produces a quasi-macroeconomic stability of Bosnia and Herzegovina since the high level of unemployment exists due to a low inflation. Contrary to the neoliberal Washington Consensus profile, whose main goal is the maintenance of steady conditions in budgets through fiscal stabilization policies, the paper stresses the need to solve the permanent high unemployment rate as the main macroeconomic problem Bosnia and Herzegovina’s.

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