Somalia after state collapse: Chaos or improvement?

Abstract

Many people believe that Somalia's economy has been in chaos since the collapse of its national government in 1991. We take a comparative institutional approach to examine Somalia's performance relative to other African countries both when Somalia had a government and during its extended period of anarchy. We find that although Somalia is poor, its relative economic performance has improved during its period of statelessness. We also describe how Somalia has provided basic law and order and a currency, which have enabled the country to achieve the coordination that has led to improvements in its standard of living.JEL Codes: O10, O17, O57, P16, P50

Extreme Weather and Civil War in Somalia: Does Drought Fuel Conflict through Livestock Price Shocks?

“…In contrast, our analysis explores the heterogeneity at the administrative region level. While other studies on Somalia have dealt mainly with the economic and social consequences of the collapse of the central state in 1991 (for example, Little 2003;Mubarak 1997;Powell, Ford, and Nowrasteh 2008) or piracy in recent years (for example , Shortland 2011;Besley, Fetzer, and Mueller 2012), we provide evidence on people's incentives to participate in civil conflict. By looking at livestock price shocks, we shed light on the role of local market pricing in changing the incentives for conflict participation.…”

“…Given these conditions, engaging in civil conflict to make one's own living at the expense of others (either directly as a fighter or indirectly as a supporter of either party) may appear opportunistic for some people. Such self-seeking behavior tends to be amplified in times of unusual hardship-when experiencing serious income loss from droughts-and facilitated by the political economy of the stateless order as in most of Somalia (Mubarak 1997;Powell, Ford, and Nowrasteh 2008;Leeson 2007). Anecdotal evidence from the 2011-2012 famine supports this notion.…”

“…Despite the absence of effective national governance since 1991, Somalia has maintained a functioning informal economy dominated by livestock rearing and exports, remittances inflows and money transfers, and telecommunications (Powell, Ford, and Nowrasteh 2008;World Factbook 2011). Traditionally the livestock sector has been central to the economic and cultural life of Somalis.…”

On the governance of “not being governed”

“…Somaliland and Puntland in the north are not functioning governments but mostly exist on paper. See Powell et al (2008) for a discussion of this. 4 Our discussion of Somali law draws on the work of Van Notten (2005).…”

“…In Powell et al (2008), my coauthors and I used the World Development Indicators to compare Somalia's performance with 41 other sub-Saharan African countries in both the current period and, when data allow, Somalia's relative performance over time. All data from Africa, and perhaps Somalia in particular, should be treated with caution.…”