CDESS is currently developing BiHMOD, a microsimulation tax and social benefits model, which is based on EUROMOD. The project is jointly implemented by CDESS and the BiH Evaluation Society.

The current team members of the BiHMOD National team are:

– Nermin Oruc, CDESS

– Nikolina Obradovic, CDESS

– Fahrudin Memic, BiH Evaluation Society

The initial financial support for development of BiHMOD was received by the EU project InGRID, which provided a visiting grant to the Essex University to Nermin Oruc, who used the opportunity of staying at the ISER Institute to participate in EUROMOD trainings and discuss the possibility of development of BiHMOD with the EUROMOD team.

This model will be powerfull tool in the hands of the fiscal and social policymakers in BiH for ex-ante evaluation of the macroeconomic and microeconomic (distribution) effects of a potential tax reform.

The microsimulation procedures were designed to examine the effect of economic policy on the economic and social situation of the households. The model uses the data from the available surveys, such as the Living Standard Labor Survey, and the policy variables, such as the tax rate. By changing the policy variables, the analyst can assess the effect of the economic policy on: 1) state budget, 2) poverty and income distribution and 3) employment incentives.

The microsimulation model for BiH will be compatible with EUROMOD, the model which is used in the EU, and models based on it are used in Russia, South Africa and five South-American countries. The fact that the model is so widespread makes it suitable for comparative research, which will be of significance for the research community in BiH, especially for the researchers in the following areas: public finance, labor economics, social policy, inequality and poverty.

Reagrding the proposition to integrate BiHMOD into EUROMOD, the members of the BiHMOD team determined the activities, which need to be done in the following period fort he model to be finalized. A detailed documentation of the process of building the model will follow which will include the validation of the results of the simulations. The plan is to submit that documentation together with the model to the EUROMOD team for verification, after which the BiHMOD should become an integral part of EUROMOD.

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