I just got back from the ASSC where my friend Ben Powell gave one of the keynote lectures on stateless Somalia. Ben is part of a small group of economist who are exploring anarchy as a research program (see the new issue of Public Choice for a survey. When most people think of free market economists studying anarchy, something like this comes to mind:
Ben actually showed this video during his lecture and it got it good chuckle from the audience. It’s an understandable new jerk reaction that many people have when some academic egghead starts talking about the benefits of anarchy but he showed the video for a good reason. Just as ridiculous as the idea of a libertarian magic dust that makes markets perfect is the idea that market failures will be fixed and the optimal solution found by bringing in the state. Harold Demsetz refered to this as the “nirvana fallacy.” Imagine a singing contest where upon hearing how bad the first guy is, the judges immediate declare the next guy as the winner without actually listening to him. This is essential how many people deal with the problem of “market failure.”
The correct approach is not “markets fail, therefore we should use government,” but rather a comparative institutional analysis. This is exactly what Ben does when he looks at Somalia after state collapse and asks whether there is chaos or an improvement. Pete Leeson, who has also looked at Somalia, does the same thing. So what do they find?
In a both cases, they find that there is actually an improvement with the collapse of the central government and the withdrawal of US and UN troops in the early 1990s according to many social and economic indicators. Not only that, but they find that when examined next to many other African countries that do have governments, Somalia still does comparatively better on many indicators. Is Somalia still a dirt poor country wrecked by what we consider as high levels of violence? Absolutely …but so is Eritrea, Zimbabwe, Ethiopia, and the Sudan – all of whom have governments.
How can we explain this? Ben gives two primary explanations. The first is that the source of most of the violence and obstacles to development in Somalia’s case was the government. Even in the wake of state collapse, the bulk of the violence that followed stemmed from US/UN efforts to install another central government. Warlords jockeyed for power (read became most violent) when they thought there was a chance that a central government would be installed with which they could extract rents (read steal) from foreign nations in the form of aid and Somali citizens in the form of taxes. Why do people rob banks? Because that’s where the money is (duh). Why do warlords fight for control of the state? Because that’s where the money is! Once the Somali warlords realized that there was not going to be a central government, fighting died down in most of the country.
What explains the absence of chaos though? Ben’s explanation should be especially interesting to sociologists since he relies heavily on the works of anthropologist Peter Little and an ethnographer (since deceased) named Michael van Notten. (Little, if I’m not mistaken, is the student of some lady named Elinor Ostrom. I think she just won a prize or something.) Somalia, like most other African countries, is a fictitious entity created as a legacy of European colonialism. Before those Euro-shmucks came along, Somalia was governed by a form of customary law called the Xeer. It’s a decentralized, non-geographically confined, clan-based, enforceable legal system. While it was suppressed under colonial rule, it never actually went away. After state collapse, it became the main mechanism by which people enforced law and order – not just within local villages, but basically across the entire country. I’ve thought many a times trying to do some ethnographic work myself in Somalia and writing a dissertation on it, but something tells me I’d have a little trouble with my school’s IRB (and cholera).
People like Ben Powell, Pete Leeson, and Ed Stringham are great examples of the kind of work being done in the contemporary Austrian School paradigm. Unfortunately, I don’t think a lot of sociologists are even aware of their work. How many sociologists (especially ones interested in cultural issues) would have read the Journal of Economic Behavior and Organization or the Journal of Comparative Economics? My guess is not many.
Assuming you’ve read this post (and even perused the papers), I want to know what do our sociologist readers think of such work? Is it interesting? Insightful? Irrelevant? Plain ol’ bullshit? As a young graduate student, I’m really interested in your answers.
- Josh McCabe
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Josh, I don’t suppose your paper will be online anytime soon?
Jeff Herbener told me that all the papers should be up over the next week or so. FYI my paper is still a very rough draft. I didn’t even get a chance to touch it since this summer. That said, I welcome feedback.
And I should mention my congratulations to Nicolas Cachanosky, Per Bylund, and Will Luther who took home the top prizes this year. An anti-Coase wave swept the ASSC this year. The sociology wave, eh, not so much!
I was just going to ask which papers won. Thanks!
“Why do people rob banks? Because that’s where the money is (duh). Why do warlords fight for control of the state? Because that’s where the money is!”
That’s a great way to explain the resource curse effect of aid.
You talked about improvements in Somalia as shown by social and economic indicators? What are these and how do they assure improvement?
Thanks Josh.
Very happy to meet you. Hope we’ll see again soon.
Bests,
NC
Lina: I believe that mostly use UN indicators and other NGOs. As you can guess, good statistics are hard to come by on Somalia.
In Ben’s paper, there is Death Rate (per 1000), Infant Mortality (per 1000), Life Expectancy, Child Malnutrition (% of children underweight), Telephone-Main Lines per 1,000 people, Mobile Cellular Phones per 1,000 people, Internet Users Per 1,000 People, Households with TV (% households), Immunization – DPT (% children 12-23 months), Immunization – measles (% children 12-23 months), Improved sanitation facilities (% of pop with access), Improved water source (% of pop with access), Tuberculosis (per 100,000 people).
In Pete’s paper, there is GDP (PPP constant $), Life expectancy (years), One year olds fully immunized against measles (%), One year olds fully immunized against TB (%), Physicians (per 100,000), Infants with low birth weight (%), Infant mortality rate (per 1,000), Maternal mortality rate per (100,000), Pop. with access to water (%), Pop. with access to sanitation (%), Pop.with access to at least one health facility (%), Extreme poverty (% < $1 per day), Radios (per 1,000), Telephones (per 1,000), TVs (per 1,000), Fatality due to measles, Adult literacy rate (%), Combined school enrollment (%)
Nicolas: It was good to meet you too. Hopefully, I can meet up with all the Suffolk econ people in December. You can watch me teach Ben how to drink;-)
If anyone is interested, the ASSC papers are now up on the website.
I’m not sure you can say that Somalia doesn’t have any government, just because there is no UN-sanctioned central government. As you mentioned, Somalia is currently run by regional Warlords, and those warlords definitely use coercion to get what they want (Austrian Economists tend to attribute all government action to coercion). The difference is that the “Central Government” of Somalia was imposed upon the country by outside forces to rule a heterogeneous region that was artificially created by those same outside forces (this is the problem in much of Africa and some parts of the Middle East), and the warlords, as corrupt and coercive as they may be, were placed more endogenously and organically and were more suited to govern their own little homogeneous regions.
This seems to be a case of wrong government vs. right government, rather than government vs no government.
Furthermore, I think that the implication of the Austrians make with their research, that this proves that no government is better than government, is fallacious. While I do tend to believe that some government is better than no government, there can be such a line of ineffectiveness and corruption past which no government could be better than the government currently in place. However, like I said, the Somalis are governed right now, albeit not by a central government.
@ Matt
“I think that the implication of the Austrians make with their research, that this proves that no government is better than government, is fallacious.”
That’s not the point in it’s entirety. Leeson’s paper specifically addresses this.
“Although a properly constrained government may be superior to statelessness, it is not true that any government is superior to no government all. DeLong and Shleifer (1993), for instance, find that
in pre-industrial Europe, countries without unified governments performed better in some ways …”