The pace of legislation at Northern Ireland's Assembly has faltered amid logjams over key peace process issues, it has been claimed.
Only five acts were passed at the Stormont legislature last year, with the drive for agreement following a British and Irish governments-brokered summit at Hillsborough in 2010 slowing considerably, revealed the review for the Community Relations Council.
The failure to reach agreement on a Cohesion, Sharing and Integration Strategy to bring nationalists and unionists together proved disastrous as the loyalist marching season gave way to the Union flag dispute, both erupting into violence, the paper added.
"Politics had leached away from the chamber at Stormont and onto the streets," it said.
Loyalists and republicans clashed with police at sectarian flashpoints like Ardoyne in North Belfast last summer following loyalist parades. December's vote at Belfast City Hall to reduce the number of days the Union flag was flown from the building sparked sporadic riots across Northern Ireland, although not involving the numbers seen at Drumcree or historic Northern Ireland disputes. Protests damaged local businesses and received worldwide media attention.
The Northern Ireland Peace Monitoring Report by Dr Paul Nolan said: "As the flags dispute dragged on into January and February of 2013 the political mood became increasingly bleak."
He added: "A combination of factors had combined to create the largest crisis the peace process had experienced in a decade."
Northern Ireland's Assembly was re-established in 2007 with Sinn Fein and the Democratic Unionist Party comprising the largest parties in the power-sharing Executive. Mr Nolan said the "duopoly" did not need to persuade the smaller parties before embarking on a course of action.
"MLAs are free to debate legislation that comes forward but with little chance of changing any bill that has joint Sinn Fein/DUP endorsement," he said.
"Small wonder then that many choose to concentrate their efforts in the committees, where there is more chance their individual contributions will carry weight."