Ekonomi och samhälle Economics and Society Skrifter utgivna vid Svenska handelshögskolan Publications of the Hanken School of Economics Nr 212 Abdirashid A. Ismail SOMALI STATE FAILURE PLAYERS, INCENTIVES AND INSTITUTIONS Helsinki 2010 < Somali State Failure: Players, Incentives and Institutions Key words: state failure, state collapse, social contract, principal-agent theory, institutions, tribalism, patrimonial leadership, cold war, Somalia, Barre, military regime, civilan regime. © Hanken School of Economics & Abdirashid A. Ismail Abdirashid A. Ismail Hanken School of Economics Department of Economics P.O.Box 479, 00101 Helsinki, Finland Distributor: Library Hanken School of Economics P.O.Box 479 00101 Helsinki, Finland Telephone: +358-40-3521 376, +358-40-3521 265 Fax: +358-40-3521 425 E-mail: [email protected] http://www.hanken.fi ISBN 978-952-232-080-3 (printed) ISBN 978-952-232-081-0 (PDF) ISSN 0424-7256 Edita Prima Ltd, Helsinki 2010 1 ACKNOWLEDGMENTS I wish to express my deepest appreciation to my adviser Professor Hans Christer Blomqvist whose unlimited patience and careful advice over the years have made this dissertation worthwhile experience. I deeply appreciate everything he has done for me. I would like to take this chance to express my gratitude to professor emeritus Paavo Okko for his kindhearted tolerance during my undergraduate (MSc.) studies at the University of Vaasa. I have been fortunate to have Professor Christer Gunnarsson from the Lund University and Professor C Kartik Roy from the University of Queensland as the pre-examiners of my dissertation. Their insightful comments and suggestions were useful when finalizing this study. I am also thankful to Professor Gunnarsson for accepting to serve as my opponent. I am grateful to the Hanken Foundation, the Ella and Georg Ehrnrooth Foundation, and the Waldemar von Frenckell Foundation for providing generous financial support for this project. I want to thank the Puntland Development and Research Centre (PDRC), where I was a visiting researcher while I was carrying out the fieldwork, and want to especially thank Abdurahman Adbulle Osman (Shuuke) for his enthusiasm to help this research and for the valuable information and Ali Farah Ali for his endeavor of making my stay in PDRC more pleasant. The entire staff of the PDRC was too kind to me and I appreciate that. I also want to thank Puntland State University (PSU), where I was a visiting lecturer in the autumn of 2008. Especial thanks goes to Mohamud Hamud, the President of the PSU, and Professor Mohamed S. Samater, my former teacher. It was a pleasure being with them. My gratitude also goes to those who participated in the interviews I conducted for this research. Mohamed Abshir Walde, Mohamed Yussuf Weyrah, Mohamed Warsame Ali (Kimiko), Ahmed Sh. Jama, Mohamed Ali Warsame, Abdulaziz Nour Herssi, Aden Sheikhdon, Hassan Aden and many others provided information that was vital to a successful completion of my dissertation. One fortunate evening with Ismail Ali Abokor in Hargeissa modified my way of thinking towards the process of state failure in Somalia. Many friends provided moral support, valuable backing, and logistical support. Mohamed M. Abdulle, Suleiman M. Farah-Ghedi, Jama Aden Ismail, and Mursal H. Shirwa deserve to be mentioned in this regard. There are also many friends and colleagues whose acquaintance provided immeasurable support and encouragement. Among them, I would like to highlight my thanks to Maija Kajava, Dr. Marja Tiilikainen, Arshe Said, Abdirizak H. Mohamed and Muddle Lilius. 2 Finally, I did save the best for last, I am very grateful for my mother Maryan. Her firm and compassionate personality has affected me so many ways. The hardships and sacrifices she confronted for my wellbeing, are surely un- compensatable, but will be remembered. My heartfelt thanks go to my older brother Mohamed (Journale) by not only replacing my father by nurturing me but also instilling in me the importance of an education. Aqoon la'aani waa iftiin la'aane Waa aqal iyo ileys la'aane Ogaada ogaada dugsiyada ogaada Oo aada oo aada wlaalayaal oo aada Waa oomanaa iyo abaare Omos iyo oon biyo la'aane Ogaada ogaada dugsiyada ogaada Oo aada oo aada walaalayaal oo aada My sister Seynab shares much temperament with him. For them I was more like a beloved son, rather than a young brother. I am also grateful to my mother-in- law Rahmo. She spared no effort for my family to be successful. Last, but certainly not the least, my warmest thanks and appreciation go to my wife, Hibo. I am greatly indebted to her amazing devotion. Surely, without her boundless support this journey would have been much difficult one. Helsinki March 22, 2010 Abdirashid Ismail 3 CONTENTS 1 INTRODUCTION...................................................................................... 9 1.1. Background of the Study ..................................................................................... 9 1.1.1. State Failure and State Collapse ............................................................. 9 1.1.2. Why States Fail? .................................................................................... 10 1.1.2.1. A View from Political Science ................................................ 10 1.1.2.2. Economic Causes of Conflict .................................................. 11 1.1.2.2.1. Structural Economic Factors ................................................. 11 1.1.2.2.2. Motivations ............................................................................ 12 1.1.3. State Formation in Post Colonial Africa ............................................... 15 1.1.4. Research Problem ................................................................................. 18 1.1.5. Research Objectives .............................................................................. 19 1.1.6. Research Method and Theory .............................................................. 20 1.1.7. Research Outline ................................................................................... 22 1.2. The Model: Social Contract Approach .............................................................. 22 1.2.1. Introduction .......................................................................................... 22 1.2.2. A Common Agency Model ..................................................................... 22 1.2.2.1. Asymmetric Principals ...........................................................26 1.2.3. State and the Agency Theory ............................................................... 28 1.2.4. The Other Principal: the Superpowers ................................................ 30 1.2.5. Asymmetric Principals .......................................................................... 31 1.2.6. State Failure and State Collapse ........................................................... 33 1.2.7. State: a Predator or an Agent of its Citizens ......................................... 34 1.2.8. Conclusion ............................................................................................. 35 2 INSTITUTIONS ...................................................................................... 37 2.1. Introduction ...................................................................................................... 37 2.2. Institutions Matter ............................................................................................ 37 2.3. Tribalism: a Socio-Political Institution ............................................................ 40 2.4. Leadership Institution .......................................................................................42 2.5. The Cold War .................................................................................................... 49 2.6. Conclusion ......................................................................................................... 55 3 POLITICAL ECONOMY OF THE CIVILIAN REGIME ......................... 58 3.1. Introduction ......................................................................................................58 4 3.2. Socioeconomic Development ............................................................................ 59 3.3. Integration .........................................................................................................62 3.4. Unification .........................................................................................................62 3.5. Causes of the Failure ......................................................................................... 65 3.5.1. Leadership ............................................................................................. 65 3.5.2. Society ............................................................................................... 68 3.5.3. Superpowers.......................................................................................... 73 3.6. The Failure ........................................................................................................ 77 3.7. Conclusion ........................................................................................................ 82 4 SOMALIA UNDER MILITARY RULE ................................................... 85 4.1. Introduction ......................................................................................................85 4.2. 7KH&RXS'¶HWDW .................................................................................................85 4.3. 65&¶V3RZHU&RQVROLGDWLRQ ..............................................................................