DIIS Working Paper

Stateless economics: the limits of informal institutions

New DIIS Working Paper on institutions in Somali livestock trade

Despite its challenges Somalia’s stateless economy has often been lauded as surprisingly strong and dynamic. In particular livestock exports from the Somali territories to the Arabian Peninsula as well as to neighbouring Kenya constitute major sources of livelihood. This new DIIS Working Paper reconstructs the institutional history of livestock trading in Somaliland from the pre-war to the post-war period, highlighting the evolution of both formal and informal institutions in the livestock value chain. A complex picture emerges, in which informal trade practices based on trust and barter have been able to guarantee the survival of livestock exports after 1991 up to today. Yet, important market failures and ineffective government regulation explain why Somaliland’s livestock economy has evolved into an oligopoly at the mercy of importing countries.

This DIIS Working Paper is written by Ahmed M. Musa (University of Nairobi) and is an output of the research program ‘Governing Economic Hubs and Flows in Somali East Africa'.The paper is editedbyTobias HagmannandFinn Stepputat.

Read more about the GOVSEA programme.

DIIS Working Paper 2019 8 From trust to oligopoly
From trust to oligopoly
Institutional change in livestock trade in Somaliland after 1991