Diasporas of developing sending countries are increasingly seen as 'agents for development'. This raises the question which factors shape an enabling environment for diasporas to effectively contribute to the socio-economic development of their home countries. In order to obtain a comprehensive picture, this study examines the role that the governments of both the migrant sending and receiving countries play in shaping the diaspora contribution environment. Brinkerhoff's model on enabling government roles is applied to analyse the effects of the most salient government policies on the contribution environment. Subsequently, Hollifield's theory on the liberal paradox in combination with the theoretical approach of Delgado Wise and Márquez Covarrubias on Northern dominance are used to examine the reasons for those policies to be in place. This paper argues that a mandating general development environment in the home country, facilitating migration and development strategies in both countries, and a resourcing stance on the mobility of persons and capital are crucial to an enabling contribution environment. Moreover, the case study on the diaspora contribution environment of the Bosnian diaspora in Germany shows how politics is one of the main obstructing factors to an enabling contribution environment. For Bosnia, the absence of an official diaspora policy is mainly the result of political unwillingness and inability to form a consensus, whereas German restrictionist immigration policies counteract promising migration and development initiatives.