Preheat the oven to 325°F and set a rack in the lower middle position.
Pat the beef dry and season with salt and pepper. In a large Dutch oven, heat 1 tablespoon of olive oil over medium-high heat. Brown the meat in batches, adding oil as needed.
Remove the meat, add onions, garlic, and balsamic vinegar, and cook for about 5 minutes. Add tomato paste and cook for 1 more minute.
Return the beef to the pot and sprinkle with flour. Stir until dissolved.
Add wine, beef broth, water, bay leaf, thyme, and sugar. Bring to a boil, cover, and braise in the oven for 2 hours.
Add carrots and potatoes, cover, and return to the oven for 1 more hour, or until tender. Discard bay leaf before serving.
Garnish with fresh parsley if desired.