Somalia After State Collapse: Chaos or Improvement? Benjamin Powell Ryan Ford Alex Nowrasteh Independent Institute Working Paper Number 64 November 30, 2006 Benjamin Powell is an Assistant Professor of Economics at San Jose State University and the Director of the Center on Entrepreneurial Innovation at the Independent Institute. Ryan Ford is a graduate student of economics at San Jose State University. Alex Nowrasteh is an economics major at George Mason University. 100 Swan Way, Oakland, CA 94621-1428 • 510-632-1366 • Fax: 510-568-6040 • Email:
[email protected] • http://www.independent.org Somalia After State Collapse: Chaos or Improvement? Benjamin Powell Ryan Ford Alex Nowrasteh ABSTRACT Many people believe that Somalia’s economy has been in chaos since the collapse of its national government in 1991. We take a comparative institutional approach to examine Somalia’s performance relative to other African countries both when Somalia had a government and during its extended period of anarchy. We find that although Somalia is poor, its relative economic performance has improved during its period of statelessness. We also describe how Somalia has provided basic law and order and a currency, which have enabled the country to achieve the coordination that has led to improvements in its standard of living. JEL Codes: O10, O17, O57, P16, P50 Key Words: Somalia, Anarchy, Economic Development, Africa Benjamin Powell is an Assistant Professor of Economics at San Jose State University and the Director of the Center on Entrepreneurial Innovation at the Independent Institute. Ryan Ford is a graduate student of economics at San Jose State University.