This study aims to investigate the democracy development i Bosnia and Herzegovina. Since 1995, when the Dayton Peace Agreement was signed, Bosnia has been undergoing an democratization, but despite that the country is still year 2017 classified as ”partly free”. In this study the democracy-enhancing factors: civil society and the political system are being related to the Dayton Peace Agreement and are tested against liberal democratic values and Consociational Democracy theory. This study is a qualitative case study and following questions are being looked into:   -       Which factors within the civil society and political system limit the democracy development in Bosnia and Herzegovina? -       To what extent does the Dayton Peace Agreement limit Bosnia and Herzegovina’s democracy development? -       To what extent is Bosnia and Herzegovina an Consociational Democracy?   The fact that Bosnia has a divided and multiethnic society puts a foundational ground for a possible consolidated consociational democracy. Furthermore, the functions of the civil society, political system and the Dayton Peace Agreement are being discussed and the shortcomings of each are being highlighted. The results of this study indicate that Bosnia’s long democratization development is primarly based on the unwillingness to cooperation between the three constitutional groups, the exclusion of minority groups and the Dayton Peace Agreement’s regulations on a political system that is not sustainable for a stable democratic state.