The business of state formation

A new working paper gives an overview of the evolution of the transnational Somali economy since the 1980s. Reviewing the existing literature, the paper highlights the multiple ways in which business people interacted with political and military actors, and how growing trade and economic booms produced a number of ‘state effects’. The paper suggests that although Somalia’s economy has been de facto stateless, it is not ungoverned. Rather than a ‘free market’, economic processes in Somali East Africa are accompanied and sometimes produce governance mechanisms that have so far been neglected by the statebuilding literature. As part of the GOVSEA research project, the paper prepares the ground for more in-depth studies of economy and state formation in the region. The authors propose conceptual tools that allow for a more nuanced analysis of the economic effects on state formation that goes beyond established ideas of ‘the state’ and ‘the economy’. Finally, the paper identifies transnational trade corridors as a key research topic for a better understanding of how economic everyday governance interacts with global standards, flows and regulation.