Posted: 3 Feb 2006

Abstract

Could anarchy be good for Somalia's development? If state predation goes unchecked government may not only fail to add to social welfare, but can actually reduce welfare below its level under statelessness. Such was the case with Somalia's government, which did more harm to its citizens than good. The government's collapse and subsequent emergence of statelessness opened the opportunity for Somali progress. This paper uses an event study to investigate the impact of anarchy on Somali development. The data suggest that while the state of this development remains low, on nearly all of 18 key indicators that allow pre- and post-stateless welfare comparisons, Somalis are better off under anarchy than they were under government. Renewed vibrancy in critical sectors of Somalia's economy and public goods in the absence of a predatory state are responsible for this improvement.