ROLE OF GOOD GOVERNANCE AND LOCAL ASSETS IN DEVELOPMENT OF RURAL AREAS IN FEDERATION OF BOSNIA AND HERZEGOVINA

ROLE OF GOOD GOVERNANCE AND LOCAL ASSETS IN DEVELOPMENT OF RURAL AREAS IN FEDERATION OF BOSNIA AND HERZEGOVINA

TANDIR, Natasa

Bosnia and Herzegovina is one of the most rural countries in Europe with around 61% of population living in predominantly rural areas. The characteristics of rural areas in BH are similar to the ones in other countries but are also specific in relation to the overall country development, natural resources and mentality of the people (social and human capital). The aim of the study is to investigate the reasons for the differences in economic performance, in particular, to investigate the role of tangible and less tangible factors influencing development outcomes, and to show how people in rural areas perceive the role of local governance, as influential, as mediating or without significant contribution to their development level. The basis of the designed theoretical model is drawn primarily from completed research projects conducted in European Union. Model assumes that the different economic performance of rural areas is the result, in part at least, of five locally available capitals: (1) natural capital; (2) built capital; (3) human capital; (4) social capital; and (5) cultural capital. In order to ensure the significance of this research and contribution to the field, the framework takes into consideration effective governance as having an important role in development of rural areas. To include this driver into the model it evaluates governance through defined principles of good governance found in the literature. This study represents a cross-sectional study which used both quantitative and qualitative methodology. Target population were residents in 72 municipalities classified as rural. In total 521 questionnaires were used in the analysis. The conducted method of analysis that was used was structural equation modelling. The results showed that only natural and human capital have statistically significant influence on development of rural areas. Related to institutional capital or good local governance there is no direct influence on the development, however some kind of contribution exists through other capitals. This research could present, along with other studies and sector analysis, useful base for constructive discussions on direct and long lasting measurements for improving rural development in our country in consistent, systematic and strategic way. Keywords: rural development, capitals, good governance, structural equation modelling

Thesis
NonPeerReviewed

2016

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