The country is now parliamentary democracy, with probably one of the most complex political structure in the world. Under the terms of the 1995 Dayton Peace Agreement , Bosnia Herzegovina consists of two entities, a Muslim-Croat entity Federation of Bosnia and Herzegovina and Bosnian Serb entity Republic of Srpska. Brcko District in north-eastern Bosnia is an administrative unit under the sovereignty of Bosnia and Herzegovina, but remains under international supervision.

Both entities have its own president, government, parliament, police and other bodies. Overarching these entities is a central Bosnian government and a three-member rotating presidency (Bosniak, Croat and Serb). The presidency appoints a Chairman of the Council of Ministers, head of government. The last elections were held on 1 October 2006. Current Presidency Members are: Haris Silajdzic (Bosniak Muslim), Zeljko Komsic (Croat) and Nebojsa Radmanovic (Serb). Chairman of the Council of Ministers is Nikola Spiric.

Under the Dayton Peace Agreement, The Office of the High Representative (OHR) was established to oversee the implementation of the civilian aspects of the agreement. The OHR has sweeping powers in Bosnia , and has sacked local officials whose behaviours it judged to have breached the Dayton accord. The international community has been planning to close the OHR at the end of June 2007 to make way for the Office of the European Union Special Representative (EUSR) with restricted powers.

Bosnia and Herzegovina 's journey towards the EU membership began in November 2005 when EU gave the green light to talks that will prepare Bosnia for the long road to EU membership. The speed with which the country moves will depend on the pace of domestic reforms and full co-operation with the UN war crimes tribunal.