Law without the State

Daron Acemoglu’s and James Robinson’s research agenda is to emphasize one overarching factor in the prosperity of nations: inclusive political institutions.  In Why Nations Fail, especially, they seek to underscore the idea that a successful economy requires centralized, but not authoritative, governments.  In a recent piece for Foreign Policy, Acemoglu and Robinson produce a list of failed states to illustrate several reasons why a lack of a stable, centralized government will undermine efforts to achieve the accumulation of wealth.

One example is Somalia.  The authors write,

One must-have for successful economies is an effective centralized state. Without this, there is no hope of providing order, an effective system of laws, mechanisms for resolving disputes, or basic public goods.

A cursory glance at the literature on post-Siyad Barre Somalia shows that this statement is palpably untrue.  After the initial years of violent civil conflict and relative chaos, Somalia began to gradually settle.  We see during the late 1990s and early 2000s a decentralization of power, in fact stripping it away from the mythical warlords that many imagine Somalia ruled by, and the restructuring of a system of social order and law.  Christian Webersik’s 2006 paper, “Mogadishu: An Economy Without a State,” explains the process of the diffusion of power well; he also explains how businesses, in their own interests, began to provide security around the Mogadishu area.  They provided these public goods so that their firms could thrive in an environment of extreme uncertainty.  This spontaneous order, of sorts, began to externalize its fruits.

Around the same time, businesses and clan elites begin to favor the establishment of Islamic Courts, ruling by Sharia Law and the local Xeer.  These institutions of law did not exhibit the extremist tendencies that are sometimes attributed to the former (Sharia).  In fact, prior to the arrival of Ethiopian troops in Somalia, the Islamic Courts were moderate.  By the middle of the first decade of the 21st century, the Union of Islamic Courts (UIC) had done quite well towards stabilizing the middle and southern regions of the country.  They were providing the goods and services that Acemoglu and Robinson so vehemently claim cannot be provided without the State; see Webersik (2006) and Ken Menkhaus’ 2003 essay, “State Collapse in Somalia: Second Thoughts.”

Sometime during and after 2006, the UIC quickly loses control.  What causes this failure?  The Ethiopian invasion in 2006 leads to the dismantling of the UIC, splitting its moderate membership from the more extreme sect.  The moderates decide to join, or support, the Transitional National Government (TNG), and the extremists resist.  Like previous attempts, the TNG does not appear to be succeeding.  Much of central and southern Somalia have fallen under control of extremist organization Al Shabaab, although surely the occupation by part of the African Union has helped the TNG remain relevant.  But, what’s important to note is that it was the international push to establish a central government which undermined the gradual stabilization of Somalia, and this trend continues today.  (See David Shinn, “Al Shabaab’s Foreign Threat to Somalia,” Orbis 55, 2 (2011), pp. 203–215.)

We see, therefore, that not just is the State unnecessary for the provision of security, and therefore the existence of the basic institutions that allow for prosperity (e.g. property rights), but that sometimes pushing for a State can actually undermine the spontaneous efforts by part of society to provide these kind of public goods.  Menkhaus (2003) notes a correlation between attempts to support the TNG and escalations in violence.  In fact, notes Menkhaus, that while the late 1990s saw a gradual death to the civil violence, the 2002 attempt to establish the TNG causes a radical increase in resistance and clashes.  This is also consistent with the story in Shinn (2011), where southern and central Somalia have deteriorated since the orchestrated move to replace the UIC with the TNG.

Yet, while the evidence suggests exactly the opposite, Acemoglu and Robinson continue to peddle the same story about the need for political institutions.  I emphasize ‘need,’ because for our authors a wealthy society is impossible without these institutions (for a more academic, although no less erroneous, exposition see Daron Acemoglu, “Politics and Economics in Weak and Strong States,” Journal of Monetary Economics, 52 (2005), pp. 1199–1226).  In Somalia, private spontaneous order provided institutions of law and order, only to be undermined by the international community’s efforts to prop up a central government that few Somalis actually want or trust.

Somalia is a tragedy, but it is a tragedy that has been made much more acute by the persistent efforts to impose a social structure that foreigners see as beneficial.  But, that outsiders perceive benefit does not imply that Somalis acknowledge the same.  Whatever the motivations of political actors in Ethiopia, or those which decide the interventions of the African Union, and the United States (who have intervened extensively in Somalia, and still do — American drones continue to patrol Somalia), it is just as tragic that academics advocate these policies on the grounds that establishing a central government is the only means of providing social stability.  Somalia is a failure because no one has trusted its ability to succeed, and this is the real tragedy.

25 thoughts on “Law without the State

    1. Jonathan Finegold Post author

      I, unfortunately, don’t have much experience (yet) with Somaliland; most of what I’ve read has to do with central and southern Somalia, which seems to be what most people care about for some reason. But, bringing up Somaliland is a very good point.

  1. Silvano

    1) I agree that foreign intervention worsened the domestic situation, also because this kind of efforts – despite the official declarations – were intended to impose some sort of puppet government.
    2) But this is also why I think that a stable government able to provide security from external forces matters a lot. I mean the term “security” in a broad sense (even being capable to reach arrangements in order to avoid invasion, wars, etc. at the cost of partial limitations of the own full sovereignty could be a way to achieve the goal). And this is an important issue because assuming the existence of external threats (in the form of organized harassers or organized rent seekers coming from other territories) if it happens that anarchy breaks down very easily or turn in some sort of statist form, well that matters a lot.
    If already existing governments see an anarchist environment like an empty space where they could try to extend their power the question is if anarchy is also able to provide military defence in a better way than a subject who enjoys the monopoly of coercion.
    3) I consider the topic interesting and providing public goods in a better way than the previous regime of comrade Siad Barre for me is enough to say that failed or tyrannical states may perform much worse than anarchy, but I’d be very careful in defining it “a successful story” as it could seems reading some pro-anarchy papers. At the bottom of the line, stateless Somaliland collapsed against a not so impressive army and failed in finding a geopolitical legitimation among the international order (and this is a relevant failure from a political point of view).

    1. Jonathan Finegold Post author

      I mean, sure, early stateless Somalia was unable to defend itself from an Ethiopian occupation; but, the same could have occurred had Siyad Barre’s regime been eventually replaced by another central government, but without the manpower to defend itself. In other words, if the failure of the Somalis to resist foreign intervention is a mark against anarchy, then surely the failure of Poland to defend itself against the German invasion in 1939 is a mark against the State. In other words, had Somalia had more time to develop, we can’t be sure that it would have been as easy to force it to collapse on itself again.

  2. Silvano

    1. That’s why I consider the total lack of legitimacy in the international contest a failure bigger than the military one.

    2. “The question is if anarchy is also able to provide military defence in a better way than a subject who enjoys the monopoly of coercion.”
    I point the accent on “better”.

    3. I cast some doubts about the fact that Germany during ’30s could be considered an example of statless society….

  3. Jonathan Finegold Post author

    I don’t think illegitimacy within the context of international recognition necessarily reflects failure by part of a local society. For example, Taiwan isn’t recognized China — and I presume some other countries –, yet is quite successful. The problem in Somalia isn’t lack of international recognition, but the fact that for some reason (difficult to pin down what reason) foreign governments seem to care so much about whether there is a central government or not. In any case, where international recognition is usually the recognition of a government, it’s difficult to earn international recognition when they don’t acknowledge the existence of a particular government.

    With regards to military defense: (a) I didn’t mean to imply that Germany was stateless, rather my point is that even states fail to defend themselves; (b) you can doubt the ability of a stateless society to defend itself, but you can’t use Somalia as factual evidence. Somalia was never given time to develop. No less, if anything, Somalia is somewhat an example against the thesis that anarchic communities can’t defend themselves, because so far non-TNG sects have done a good job in resisting the imposition of a central government. Being able to defend oneself doesn’t necessarily imply the ability to maintain stability or order. The Soviet Union was able to defend itself against the Germans, but there was still chaos and destruction in the parts of the Soviet Union which were temporarily occupied.

  4. Silvano

    We may say that Taiwan isn’t formally recognised by China and we may say that North Corea and South Corea are still at war since they never signed a peace treaty. Both statements are formally correct and both largely underscore the reality. De facto Taiwan is a state and treated as such – even by China. Formally no one wants to disappoint China so hipocrisy solved the problem. Legitimation isn’t just about having an accredited ambassador or not. Napoleon, despite his victories, had never been considered a legitimated emperor by his peers at the time (that’s why France wasn’t treated as a “loser” after Waterloo). I hope now what I mean for legitimation is clearer.

  5. Silvano

    Anyhow you hit the point: it’s harder being recognised. I think there is a kind of trade off: defending from an external threat require a high degree of collusion among actors. That’s why a monopoly seems to me more stable. The problem is that after you got it nothing is like before.

    1. Dan(DD5)

      Well if a government is required to provide us with protection under the threat of force (never mind the contradiction), then the government must also provide, for the sake of “stability”, the guns, bullets, ships, airplanes, etc… for what good is a government protection agency without guns and bullets…? And also all the stuff that’s required to produce the guns, and bullets, and ships, etc…. let’s not forget the food the soldiers have to eat, and of course, all the things needed to produce the food in the first place… I really do think that, for the sake of stability of course, the government must takeover the entire economy.

    1. Jonathan Finegold Post author

      This is essentially what Silvano is pointing out. But, I don’t think it’s a fair argument. Assume that the Siyad Barre regime is followed up by an “inclusive” pluralistic government that would, over time, do great things towards improving the living conditions of its Somali citizens. But, for some reason this government doesn’t curry favor with its neighbors or major world players, like the United States. It could be for any reason; maybe Ethiopia wants a puppet government; maybe the new government doesn’t crack down on Al-Qaeda operatives in the country; $_your_reason_of_choice. The government suffers a foreign occupation and is replaced. Should we, therefore, conclude that we should all just prefer extractive, puppet regimes, because good social institutions don’t stand a chance?

  6. Silvano

    Obviously no. But let me use a “kirznerian” approach.
    Do you think it’s necessary “perfect competition” in a neoclassical meaning or it could simply happen that even starting from anarchy the monopolist is such because in a broad sense he just won the competitition?

    1. Jonathan Finegold Post author

      You’re talking about two very different processes of institutional evolution.

  7. John

    Good article, a few questions though.

    ” he also explains how businesses, in their own interests, began to provide security around the Mogadishu area. They provided these public goods so that their firms could thrive in an environment of extreme uncertainty”

    To what extent was this provision of security successful? I can imagine it suffering from a pretty big free rider problem. How did they overcome this?

    “businesses and clan elites begin to favor the establishment of Islamic Courts, ruling by Sharia Law and the local Xeer”

    Did both parties engaged in a dispute have to agree to use an Islamic Court? What if the parties could not agree on a dispute resolution organization? For example, I cannot imagine too many non-Muslims volunteering to be subject to Sharia Law. How did the private sector overcome this?

    1. Jonathan Finegold Post author

      These aren’t questions I can currently answer with hardcore precision, although I will ultimately have to be able to for an upcoming journal article I’m planning to write within the next few months. I’ll offer a tentative response to both.

      1. There are positive externalities associated with law and order. But, we don’t live in a world that abides by the rules of an abstract and purposefully unrealistic economic model. We live in a dynamic one, where market agents have to choices that influence their standards of satisfaction, if you will. A businessman, for example, can offer monetary aid to fund the UIC or it can raise a small militia to protect its merchandize and stabilize its markets; many of the benefits might flow onto others, but the businessman has only a few known choices in front of him. He knows that the status quo is not good for business, so why should the “free rider problem” pose a serious obstacle to the provision of a system of justice?

      2. The use of both Sharia Law and the Xeer shows a social code that was molded to fit with the general Somali culture. Law is an evolutionary phenomenon. A Chinese person who migrates to the United States might not like the United States’ justice system, but this doesn’t lead us to question the latter’s viability.

      With regards to enforcement, I think the most relevant answer is that people’s behavior is constrained by clan ties. The UIC benefited from these relationships; arbitration between members of different clans, or even within clans, has existed in Somalia for a long time. Otherwise, the threat of force might be used to enforce the law.

  8. Silvano

    I just tried to be short because i’m writing from mobile..
    I simply want you to address the fact that anarchy could evolve endogenously in a more statist form facing the issue of providing self defence.

    1. Jonathan Finegold Post author

      What I’m saying is that this is too simplistic. An extractive, absolutist regime can “evolve” out of a pluralistic one, but this doesn’t really say anything useful as to which political system is better than the other.

    1. Jonathan Finegold Post author

      Feasibility and robustness are criteria that are included when deciding what political system is better than another.

      But, we’re talking over each other. The reason why I keep bringing up the comparison between militarily weak and strong states is to show you that coming to conclusion that anarchy isn’t feasible, based on the fact that the Ethiopian occupation of Somalia has set back whatever progress occurred prior to it, is the same as concluding that free democratic societies are also unfeasible because relatively free France fell to relatively authoritative Germany in mid-1940.

  9. Silvano

    “[…] coming to conclusion that anarchy isn’t feasible, based on the fact that the Ethiopian occupation of Somalia has set back whatever progress occurred prior to it […]”

    I never meant that, at least in such apodictic form. I showed (strong) concerns about the robustness of anarchy but without the pretence of declaring universal laws. Mostly because many hard-minded libertarians tend to describe the state as a curse coming from Klingon or another planet. On the contrary I think people seriously interested in anarchy have to explain why states emerged, what was going on before their existence, why middle ground solutions (like city states, small federations, etc.) have been replaced and how they think it’s possible to revert the trend.
    So, while I agree that even poor territories could improve in the absence of a government and maybe more in an anarchic environment, especially if the relevant alternatives are anarchy or rotten states, I can’t go so far in judging Somaliland a very strong case for anarchy in general.

  10. Mikhail Ramendik

    Wait, wait. Why are you describing the UIC as providing services “without a state” when the UIC was not just a state, but a state of a famous type, the type that had a major influence on the formation of the modern Western state?

    Shariah law was instituted by Mohammed (Muslims will say by Allah through Mohammed) as a part of conquest, of building a large empire. Shariah was, historically, there to change a tribal system into a reasonably centralized state one, importantly with uniform law.

    The “story about the need for political insitutions” is in fact strongly supported by the rise of the UIC, a political institution. Yes, people tended to prefer political institutions in line with their tradition and religion – which means Sharia political institutions.

    You also conveniently ignore the rise of al-Shabab on pretty much the same lines.

    1. JCatalan

      Not all political institutions are part of a state (a monopoly of power/force). And whether Shariah law was at one time an exponent of some now non-existent state is not relevant. As for al-Shabab, remember that the rise of al-Shabab coincides with the foreign occupation of Somalia and the attempt to impose a central government.

      1. Mikhail Ramendik

        OK, so at least we agree that the “need for political institutions” was valid and the UIC was one.

        Next, how was the UIC *not* a monopoly of power/force on the territory it controlled? Exactly what is the difference between the UIC and a state? Would you think what Mohammed founded, and what Sharia was developed for, is in any way not a state?

        Also (I was doing an edit but you answered before I saved it so repeating here) – I would really like to see what you base your “UIC was moderate”
        statement on – and what you mean by moderate. Especially in the
        principal way where Sharia is incompatible with the classical liberal
        view of law, that is in freedom of religion.

        1. JCatalan

          I don’t know what Sharia was at the time it was founded by Mohammed. But, we’re not talking about Mohammed. We’re talking about Somalia. What Shariah was 1,400 years ago is completely irrelevant.

          And, of course political institutions are necessary. Nobody has ever claimed otherwise.

          The UIC (at the time, not anymore) provided the service of justice. It was not a state. It did not enforce a series of rules within some defined territory with a monopoly on force. The UIC is not the same thing as what the current government of Mogadishu is (a state), just like it wasn’t the same thing as the U.S. government (a state).

          1. Mikhail Ramendik

            States can be very different. Of course it is not the same as the Mogadishu government or US government. However. the UIC had a strong military, which among other things defeated the “businessmen providing security” in Mogadishu, aka warlords, who were hailed by ancaps.

            So the UIC did enforce a monopoly of force within its territory. It may not have enforced every single decision directly, but it ensured that any use of force was consistent with its will, and suppressed militias not loyal to it.

            This is a well known form of operation of a state, Europe had it in feudal times. Every noble had a castle, guards, sometimes a full army – but they had to be loyal and obedient to the King, or else.

            So I contend that the UIC was a state. Not the modern Western form of state, but a state, which enforced a monopoly of control of force.

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