AI-DRIVEN TRANSFORMATION IN PUBLIC ADMINISTRATION: GOVERNANCE CHALLENGES AND INSTITUTIONAL CAPACITY IN BOSNIA AND HERZEGOVINA

Abstract

This study examines the effects and benefits, as well as broader governance challenges related to Artificial Intelligence (AI), including systematical measurement of overall digital reshaping process in digital transformation and capacity building of public administration in Bosnia and Herzegovina. Grounded in contemporary theories of adaptive governance and digital-era public administration, the research conceptualizes AI as a key determinant of transformational capacity in public institutions. The multi-level empirical analysis operationalizes key constructs, including digital maturity degree and the extent of AI use, so as multidimensional impacts in administrative efficiency, service quality, transparency, institutional integrity and strategic decision-making capacity in public administration bodies in Bosnia and Herzegovina. The findings tend to demonstrate a statistically significant correlation between AI use and efficiency improvements, reduction of administrative burden, enhanced integrity mechanisms, but at the same time to highlight structural and organizational constraints, limited technical capacities, regulatory gaps and ethical concerns related to algorithmic bias, accountability and governance. By empirically assessing the transformational capacity of AI in public administration, this study contributes to the growing basis of digital governance, provides policy-relevant insights for the effective integration of AI in line with European administrative standards and principles of trustworthy AI in Bosnia and Herzegovina.