Twenty-Five Lectures on Modern Balkan History. Lecture No. 12: Bosnia-Hercegovina and the failure of reform in Austria-Hungary

Twenty-Five Lectures on Modern Balkan History

Twenty-FIve Lectures on Modern Balkan History (The Balkans in the Age of Nationalism). List of lectures. – Humanities Commons (

Lecture No. 12: Bosnia-Hercegovina and the failure of reform in Austria-Hungary


Revolution and reform represented two approaches to change in late nineteenth century Europe. For the Habsburgs, like the Ottomans, revolutionary nationalism was not acceptable as a solution to political and social problems. Instead, Austria-Hungary’s leaders expected that reforms would bring economic progress, out of which would flow personal prosperity and ultimately political stability.

Lecture 11 showed that reform efforts lagged and ultimately failed in the Ottoman Empire, because Ottoman leaders too often regarded reformers as outsiders usurping the power of the proper Turkish authorities. “Reform” meant Western ideas and Western innovations, forced onto an unwilling Ottoman establishment. Denied the help of the Ottoman state, Western European reformers (even the leaders of the Great Powers) got nowhere.

In the case of Austria-Hungary, reform had no such handicap. Austria-Hungary was a “Western” state: ideas that were foreign novelties in Turkey were the norm in the Habsburg Empire. The Habsburgs had accepted legal equality, religious toleration, applied science and rational government during the Enlightenment and the reign of Joseph II. Given a chance to apply these Western notions in southeastern Europe, the Habsburg state in theory should have rapidly demonstrated the value of reform and the power of “modern” Western society to solve problems of Balkan backwardness.

The opportunity to conduct such an experiment came to the Habsburgs in Bosnia-Hercegovina when those districts came under Habsburg occupation and administration in 1878. Austria-Hungary retained control of the area for the next forty years, legally annexing the province in 1908 and holding it until 1918. However, instead of turning Bosnia into a model for the Balkans, the Habsburg experiment revealed unexpected obstacles that hurt the reform solution and ultimately made Bosnia the cradle for dangerous radicals. In 1914 Bosnian dissidents triggered World War I and with it the collapse of the whole empire.

In order to understand what happened in Bosnia between 1878 and 1918, and because of the high level of interest in Bosnia because of the Yugoslav civil war of the 1990s, it makes sense to sum up Bosnia’s prior history and point out the unique aspects of Bosnian society. It will also be useful to say something about Austria-Hungary in the years after the Ausgleich of 1866.

Austria-Hungary after 1866

The political situation within the Habsburg Monarchy set an essential stamp on the character of Austro-Hungarian reform policies. In 1866 the ruling Habsburgs and the conservative state apparatus came to an accomodation with the country’s German and Magyar citizens, after barring them from political life since their participation in the liberal national revolutions of 1848. The Germans and Magyars accepted the absolute authority ofthe Emperor Franz Joseph in matters of diplomacy and military affairs. In return, the Germans and Magyars became de facto “peoples of state,” favored over other ethnic groups like the Czechs, Croatians, Serbs or Romanians in matters of language and self-government.

For all three parties — the Germans, the Magyars and the royal family — the concessions of 1866 meant giving up some long-held principles. Endorsing the idea of reform made this step easier because it offered a plausible, and potentially profitable, alternative to revolutionary confrontation. At the same time, however, the arrangement of 1866 made the dynasty a captive of the specific ethnic politics pursued by German and Hungarian leaders. Matters proceeded differently in the Hungarian and non-Hungarian halves of the Dual Monarchy, reflecting local politics.  

Since 1848, nationalist agitation had been identified with the prosperous parts of the urban population. German and Czech nationalist political parties continued to rely on middle class voters. To counteract their influence, the state expanded the voting franchise in the non-Hungarian parts of the Empire, in hopes that class and economic issues would replace nationalist issues in parliamentary life. Direct election of parliamentary deputies began in 1873; by 1907, all adult men in the non-Hungarian half could take part through universal, secret balloting.

This policy had some success. New mass parties appealing to the urban working classes placed a higher value on economic reforms than on ethnic politics. Unions were permitted as early as 1867, and Marxist or Catholic Socialist parties achieved important benefits for workers. In the 1880s the work day was reduced to 11 hours, child labor was forbidden, and the state set up pensions and insurance funds. Industrial weakness had contributed to Austria’s defeat by Bismarck in 1866: the Prussians had superior railroads for mobility and superior armaments. The Habsburg state became convinced that a prosperous national economy was essential for success in world affairs. Unions and pension plans were intended to create healthy workers, as one element in national economic health. At the same time the Vienna government committed itself to certain assumptions about agricultural and industrial capitalism because those notions sustained the wealth and influence of the powerful German (and Magyar) leading classes. Their investments and leadership were thought to be as crucial for an industrial society as were workers.

In Hungary, on the other hand, ethnicity remained the driving force in politics. For example, later Hungarian governments carried out policies that discriminated against the Slavic and Romanian minorities inside Hungary. Property qualifications for voting kept most non-Magyars out of the county and national Diets. The mandatory use of Hungarian in local government activity placed non-Magyars at a disadvantage when they dealt with law courts and local bureaucrats. Magyarization in education was especially resented: while children retained some rights to be taught in their own languages, after 1879 all teachers had to master Hungarian. In 1906 only 16 of 205 high schools gave classes in any languages but Hungarian. Hungarian language policy was a logical way to bring all citizens into public life, just as Joseph II’s rational eighteenth century reform plans included the uniform use of German to help integrate the multiethnic empire. But in both cases, logic failed to outweigh personal preferences and national pride, and made such “reforms” unpopular.

When the time came for Austria-Hungary to take control of Bosnia, both of these elements — the ethnic nationalism of Magyarization and the economic self-interest of capitalism — played powerful roles in the design and execution of plans for reform in the region.

Bosnian identities

The forces of revolutionary nationalism disturbed Bosnia-Herecegovina, like Macedonia, without creating a unified national movement, and for some of the same reasons. Both Macedonia and Bosnia are districts in which contrasting historical trends and social patterns meet and compete. Greek, Turkish and Slavic elements met in Macedonia. Muslim, Catholic and Orthodox elements met in Bosnia. Both districts are transition zones between one culture and another, and in both districts, unlike populations have been mixed together in complex geographic and social patterns.

In Macedonia, the disparate parts of the population are distinguished by their language. In Bosnia, the defining element of ethnic identity has been religion. Bosnians are divided according to their Catholic, Orthodox or Muslim heritage. Bosnians of all faiths are not necessarily devout or even active believers. Nevertheless, a family’s historical connection with one religion or another defines its ethnicity.

This fact tends to conceal the uniform historical population from which all three modern groups are drawn. The mass of Bosnian Muslims are not Turks or Albanians, and not migrants to the Balkans from some Middle Eastern country. They are Slavic speakers whose ancestors converted to Islam in the years after the Ottoman conquest of Bosnia in the 1400s.

Bosnia before the Turkish conquest

The closely related Slavic speaking tribes known as the Serbs and the Croats settled in what became modern Yugoslavia around the year 600 CE. At that time there were few differences between the two groups.  The Serbs settled in the south, and the Croats in the north, but it is difficult to draw a line in the middle — that is, across Bosnia — and say with certainty that the occupants of a particular area belonged to one group or the other. There is some evidence that the first Slav inhabitants of Bosnia were Croatian tribes, but as time passed, Bosnia developed as a place that was different from both Serbia and Croatia.

It is also important to remember that South Slavs in the Balkans did not have modern ideas of “Serbian” or “Croatian” identity until the modern period: instead they identified themselves primarily by their religion. Following the schism between the Roman Catholic and Greek Orthodox branches of Christianity in 1054, Bosnian Christians worshipped in ways that were closer to the Roman than the Orthodox style (although the Bosnian Church remained distinct, about which more later).

After the Kings of Hungary became the Kings of Croatia in 1102, Bosnia drifted out of the direct control of Hungary, and had rulers of its own. To further their claims over Bosnia, the Hungarians persuaded the Pope that the Bosnians were heretics, and Catholic crusaders unsuccessfully invaded the country in the middle of the 1200s. As a result, the Bosnian Church severed its ties to Rome, but apparently retained its basically Catholic rituals and theology. A separate Bosnian Church endured for some 200 years, finally fading away just before the Ottoman conquest.

Some historians have identified the medieval Bosnian Church with a schismatic, dualist heresy with ties to the Manichees, and attached to it the label “Bogomil.” However, recent scholarship has failed to supply strong evidence that Bosnians were heretics or dualists or called Bogomils: the original reports apparently derive from justifications for the politically motivated crusades of the 1240s.


After the Ottoman conquest, which took place in stages between 1450 and 1480, Bosnia took on its unique character as a province with a large native, Slavic, Muslim population. Why did Bosnian Slavs convert to Islam when Serbs, for example, did not? Much early writing on this topic has been refuted by recent scholarship. The various explanations of the situation are worth going over one by one.

First, it was formerly said that the Bosnian Bogomils, resentful of both Catholicism and Orthodoxy, converted en masse to Islam; and second, that they did so at the time of the conquest. Scholars no longer accept the existence of heretical Bogomils, and the Bosnia Church itself was all but extinct before the Ottomans arrived. Ottoman tax registers also show that the conversion process was long and gradual. As late as 1600 Muslims were a minority in the population: a Catholic visitor’s report of 1624 describes half of the population as Muslim, the other half Christian (of the Christians, two thirds were Catholic, one third Orthodox).

A third myth states that the Bosnian nobility converted to Islam to preserve their position of privilege, and carried their subjects with them. This theory fails to fit the evidence of gradual conversion. Also, Christian feudal spahis were not unusual in the Balkans in the 1400s, so conversion by nobles would not have been necessary. Finally, there is as much evidence of conversion from Catholicism or the Bosnian Church to Orthodoxy as to Islam, a fact for which this theory cannot account.

Recent explanations of the Islamicization of Bosnia are as follows. In the 1400s, both Orthodoxy and Catholicism were already present in Bosnia, but neither had deep roots (in contrast to Serbia or Greece). The region was primitive and lacked priests who could exert a strong influence over isolated populations. After the Ottoman conquest, religious flux continued in the population as it had before, with conversion back and forth between the two Christian sects and from both to Islam. Islam was attractive not only because it was the faith of the ruling Ottomans, but because Islamic institutions were sophisticated and fulfilling, enhanced by impressive mosques and a legal system. Urban areas especially were centers of Islamic learning and refinement, and the rate of conversion in Bosnian towns was in fact higher than in the countryside.

Instead of a single cause or episode, gradual conversion for a variety of reasons seems to offer the best explanation. It is also worth noting that the Muslim share of the population fell back below half during the wars of the 1600s and 1700s: Muslims in military service often failed to return, and there were occasional migrations of Serbs into the area. In modern times, the Muslim share of the population has been around 40 percent.

Ottoman Bosnia

Between 1480 and 1878, the history of Bosnia was not very different from the history of the rest of the Balkans. The proportion of Muslims was high, but this was true in other Balkan districts and cities: we simply tend to forget those areas, places where most Balkan Muslims left during later wars of independence. However, Bosnia’s isolation from ports or roads, and its rugged terrain, made it one of the most backward Balkan provinces. The Christian population suffered from the usual abuses of Ottoman misrule. The Austrian occupation in fact was the result of a peasant uprising in 1875, which led to the Russo-Turkish War of 1877-78 and so to the Treaty of Berlin.

When Austrian troops and administrators arrived in 1878, the population of Bosnia and Hercegovina was perhaps 1.1 million people. 38 percent of them were Muslim, 42 percent Orthodox and 18 percent Catholic. The Yugoslav census of 1981, a hundred years later, recorded remarkably similar figures: 40 percent Muslim, 32 percent Serb (Orthodox), and 18 percent Croat (Catholic), plus 8 percent  who chose the category of “Yugoslav.”

Bosnia’s economy was backward. Only 5 percent of the country was good farmland, but 95 percent of the population had to make its living from farming or herding livestock. Under Ottoman law, only Muslims could own land. About 3 percent of the Muslims owned large estates. 75 percent were free peasants with small farms, and 10 to 20 percent were tenant farmers. The rest lived in provincial cities. Among the 100,000 non-Muslim families, the overwhelming majority were tenant farmers. By law, tenants paid 44 percent of their income in dues, taxes and service charges: in practice, the figure was often higher.

Tenants had few options: they needed their landlord’s permission to give up their plots, and there were no industrial jobs to go to. Many tenants worked tiny “dwarf” farms that produced too little to live on, even before turning over half the produce as taxes. In the Balkans, a farm of 7-8 hectares (about 18-20 acres) was generally considered necessary to support a family. In Bosnia in 1906, 48 percent of tenant farms amounted to five hectares or less. Poverty and dwarf farms were not confined to Christian families: 77 percent of Muslim free peasant farms consisted of five hectares or less. The population of Bosnia-Hercegovina grew from 1.1 million in 1878 to almost 2 million in 1914 . This made the problem worse, because families further subdivided their farms among their children.

Prior to 1878 there was almost no industry except a few small mines. The result was rural overpopulation and underemployment. There was one minor center for iron mining and working, and some surviving local guilds that made carpets, pots and the like for the local market. The only significant export of Bosnian agriculture was a small prune crop. In 1879, the business district of Sarajevo was destroyed in a great fire, further retarding commerce. Lending at interest was contrary to Islamic law, so there were no banks and thus no source of investment capital for anyone trying to start or upgrade a business. The transportation and communication system was medieval: goods moved by ox cart. Foreign investors built a small railroad in 1872: it connected to no other rail line, and promptly went bankrupt. Roads were few and unable to handle wet weather.

Social and legal defects worsened conditions. In line with the usual Ottoman practice, non-Muslims lived as second-class citizens. The legal system was based on Islamic law and discriminated against Christians; as in Macedonia, there was no legal equality, freedom of religion, or security of life or property. The Ottoman government was an unrepresentative absolute monarchy, mitigated only by its inefficiency.

The potential for reforms

After they occupied Bosnia in 1878, the Habsburgs had an ideal opportunity to show the superiority of political and economic reform as a path to better lives, and as an alternative to ethnic nationalism and revolutionary unrest. The Treaty of Berlin and the practical fact of the occupation gave Austro-Hungarian leaders almost unlimited power to administer Bosnia as they wished.

Application of Habsburg government traditions and common sense would have implied the implementation of reform measures like these:

  1. Civil and legal equality among all the ethnic groups, regardless of ethnicity or faith.
  2. Rigorous enforcement of the law to reduce violence, robbery and murder.
  3. New courts, schools and administrative offices.
  4. A role for the population in local rule.
  5. An end to the tenant farming system, which amounted to virtual serfdom by tying tenants to their land.
  6. Banking and investment institutions to support improvements in agriculture and industry.
  7. Better transportation and communications.
  8. Expansion of industries, or at least conversion of some agriculture to crops for export instead of subsistence.

How well did the Habsburgs achieve goals like these?  The results were disappointing.

Political and legal reforms

Administrative change in Bosnia faced major hurdles. Neither Vienna nor Budapest wanted Bosnia attached to their half of the Dual Monarchy: in either case, the addition of so many Slavs would have spoiled delicate balances in ethnic politics. Instead the joint Austro-Hungarian Finance Ministry ran the province. One result of this decision was that the new administration in Bosnia had to pay for itself, and this delayed or blocked important improvements. According to the plan for fiscal self-sufficiency, railroads would be built first as a precondition for investing in industry and trade; as a second stage, there would be mass education; and only as a third stage would there be any measure of political reform or efforts at popular participation in running the province.

The Austrian occupation was in theory temporary: in theory, the sultan’s administration might have to be restored. In practice, this fiction was ignored when it was inconvenient. However, the separation between foreign administration and indigenous population meant that acts of the expanded administration were not grounded in local needs, and too often functioned as a source of patronage for foreigners. New jobs in the provincial administration went to Austro-Hungarian citizens, not to local Bosnian residents. There were 120 Ottoman officials at work in 1878; by 1908 over 9,500 Habsburg officials were employed in Bosnia, a significant drain on local taxpayers.

In part because of the fiction that the occupation was temporary, and in part to reduce armed Muslim resistance (there was an armed revolt in 1883), the Habsburgs chose to keep many existing institutions derived from the millet system, including separate school systems. Religious schools remained in place for Muslim villages. Orthodox village schools and churches fell under the scrutiny of the new regime: Serbian books, teachers and priests regarded as anti-Austrian were excluded. Catholic churches and schools did very well on the other hand, supported by money from Catholic Austria.

Also retained was a court system based on Islamic law. Violence against Christians was curbed, but economic discrimination based on property went unchecked. When new law codes were introduced, they represented compromises based on political and budgetary facts, not good law. Because the Austrian and Hungarian codes differed, the new Bosnian criminal law code of 1879 was based instead on the Habsburg military code of law. Although there was a need for a good system of low-level local courts, these would have been too expensive; to save money, many legal decisions were handed over to administrators instead.

Agrarian reforms

The biggest disappointment for most Bosnians was the failure to use land reform to defuse ethnic tension. The Habsburg state declined to act because reducing the power of landowners would have risked political unrest in Bosnia, and created a dangerous precedent for Magyar landlords in Hungary, given their Romanian and Serbia tenants. Also, tax relief for Bosnian peasants would have been a threat to the tax revenues of the provincial administration, which had to be self-supporting. Conditions for tenants improved and their productivity went up, but the peasants derived little benefit: under the tithe law, their taxes simply went up too, so that the state collected twice as much revenue in 1895 as it had in 1880. Meanwhile, tenants remained tied to their land unless they could pay an indemnity to their landlords: during the 35 years from 1878 to 1913, less than a third of the tenant families were able to do so. The occupation thus failed to end the tenant farming system.


The Habsburg administration did make a major effort to attract investments to pay for railroads, mines, industries and agricultural exports. However, industrial growth was handled for the benefit of the Habsburg state and the investors, not the local inhabitants.

Not long after the occupation, Austrian state monopolies on goods like tobacco and salt were extended into Bosnia, along with Austrian freight and customs rates. This measure helped to finance the Bosnian administration but pushed many local small merchants into bankruptcy because they could not compete with better-financed firms outside the province. Local enterprises were replaced by government-run salt mines and tobacco factories. These plants did create jobs, but too few jobs to create a middle class or a working class in Bosnia. In the same way, while many railroads were built in Bosnia, they were not constructed in ways that sustained the local economy. Some rail lines fulfilled strategic needs of the army. Others met the needs of Hungarian companies that used them to maximize the profits they made from exporting Bosnia raw materials. As a result, the railroad system as a whole did not support industrial growth.

The growth of heavy industries and mines was also retarded by political factors. Hungarian cartels, in particular, used bureaucratic tactics to delay the opening of potential competitors. Coal mines, iron foundries and chemical factories that opened in Bosnia tended to be successful, but were too few and too late to have a strong effect on the economy. Coal and iron had been foundation industries in the English industrial revolution: political shortsightedness and economic jealousy prevented them from playing the same role in Bosnia.

Light industry was also neglected. Because the textile trade required less capitalization, some local Bosnians were able to open a factory in 1884. With proper care the textile sector might have expanded. However, the potential profits would have gone to the local Bosnian owners, not to Austro-Hungarian investors who intended to profit from any improvements in Bosnia’s economy. Outside investors had far more influence with lending banks. As a result, the textile trade got very few loans and was unable to grow.

Banking and investments themselves were also casualties of jealousy and greed. Thanks to the minimal budget resources available, the state apparatus lacked the money to fund agricultural improvements. Instead, large banks were given monopoly licenses. This led to abuses and scandal: in 1908 the Hungarian bank that had the sole right to lend money to tenants who hoped to buy their land, was found to be fixing the rate of return so that tenants paid more than 10 percent interest per year. As a result, peasant needs went unmet and agricultural progress was stalled.


As we look at the period of Habsburg rule in Bosnia, the results are disappointing from both economic and political perspectives. Austria-Hungary took control of the region for two reasons: first, to assure military control over a sensitive border area, and second, to improve the deplorable socio-economic conditions there. As the events of 1914 showed, the latter goal had the potential for profound effects on the former. Because the Habsburg regime failed to reform Bosnia’s economy or society, political turmoil only increased, and eventually led the empire into the fatal war of 1914.

Sadly, the failure to meet reform goals was a result of greed, jealousy and petty politics, not inadequate national resources. Too few railroads were built, too few industries founded and too few peasants rescued from serfdom, largely because political and economic leaders in Austria-Hungary chose to serve their own needs first. As we later consider the origins of the Bosnian Serb assassins of 1914, keep the failures of the Habsburg occupation in mind. No outside power, no Turkish pasha dictated this course to Austro-Hungarian leaders. They themselves made the decisions which sustained discontent in Bosnia, and eventually they paid dearly for their choice.


This lecture is a portion of a larger set of texts, Twenty-Five Lectures on Modern Balkan History (The Balkans in the Age of Nationalism).

This page created 27 November 1996; last modified 17 January 2023.


Copyright 1996 by Steven W. Sowards

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