Institutional asymmetries in a low-coordination economy: the smart specialization paradox in Bosnia and Herzegovina

South East European countries are pursuing their way towards EU accession which involves the adoption of EU laws, standards, and policy approaches. This process of policy alignment faces a local institutional environment marked by existing institutional asymmetries between formal and informal institutions, often based on institutional voids. In this article, we examine the conditions for introducing the EU’s smart specialization approach to a context marked by institutional voids and asymmetries. We understand the institutional environment of South East European countries as low-coordination economies marked by low degrees of cooperation and trust. In such an environment, a participatory policymaking approach such as smart specialization can serve to mitigate institutional asymmetries but is likely to face major challenges, leading to an institutional smart specialization paradox that is exacerbated by the absence of an ex-ante conditionality. To explore these challenges, we examine institutional voids and asymmetries relevant for innovation policy in Bosnia and Herzegovina, based on a series of interviews with firms and intermediary organizations and an inductive research design inspired by grounded theory. Drawing on the results, we offer conclusions and policy recommendations for the upcoming introduction of smart specialization to Bosnia and Herzegovina and other EU enlargement countries.