Is the state necessary? The case of Somali Economy

The state is often considered a necessary condition for the existence of social order and economic development. However, except for the group of developed countries, most states are incapable of providing services which are commonly attributed to them. In this paper an approach, according to which the state is the best possible form of political organisation, is confronted with the case of stateless Somalia. Without government since 1991 this country provides an opportunity to investigate the emergence of institutions and supply of public goods in a stateless society. Using the comparative institutional approach the situation in Somalia is compared with the period before the collapse of the state as well as with the situation in other countries of the Horn of Africa region, showing a relative economic improvement after 1991. Considering economic development as an essential indicator describing the stability of social institutions, this corroborates the argument according to which a hierarchical form of political organisation not only may destabilise social order, but also that anarchy can be more successful than the state in providing stabilisation and economic development.