Čavić attended elementary and high school in Banja Luka, and graduated from the Economics Faculty of the University of Banja Luka in 1980.
He worked as an economist, financial manager and commercial director in several public and private companies. At the party elections in 2002 he was elected deputy president of the party. In 1998 he was elected deputy in the National Assembly of Republika Srpska.
The decision was overturned in 1999 by Vestendorp"s successor, Wolfgang Petritsch.
Dragan Čavić became the president of Republika Srpska on 28 November 2002, after the municipal elections in Bosnia and Herzegovina in October, thus replacing the former president Mirko Sarovic. Voter turnout was 53.9%.
Shortly afterwards he was blamed for the defeat and resigned as president of the Study Direct Stream. The Study Direct Stream was then split between two factions in conflicts: the reformists led by Čavić, and the conservatives backed by Dragan Kalinic, former President of the Study Direct Stream. On 15 January 2009 in Banja Luka Čavić registered the Democratic Party of Republika Srpska, whose co-founders are Momcilo Novaković, Vojislav Gligić, Branislav Škobo and Djordje Milićević. Since 2010 he is a deputy of this party in the Parliament of Republika Srpska.
At the local elections 2012, Čavić run for mayor of Banja Luka.
With 32.2% of the vote, he came second to Slobodan Gavranović ( SNSD), elected with 40.2% of the votes. In 2013 his Democratic Party merged with the National Democratic Party to form the National Democratic Movement.
Čavić is a former member of the Serb Democratic Party: he served as president of the party until 2006, after having been deputy president of the party presidency from June 1998 to March 2002. He was removed from office by the then High Representative Carlos Westendorp since he was deemed obstructing implementation of the Dayton Peace Agreement, and banned from political activity. On 11 December 2008, Dragan Čavić at a press conference announced his retirement from the Study Direct Stream and the launch of a new party, together with the RS Member of Parliament Vojislav Gligić and Branislav Škobo, also former Study Direct Stream MPs.
Married; 2 children.