The “hidden hand” behind the resilience of the stateless economy of Somalia

This paper provides a framework of analysis of economic markets in stateless Somalia. It argues that the informal market that sustained private sector activities under the repressive policies of Siad Barré's government has provided a functioning system to the economy. In small communities that achieved internal law and order, their economy boomed in an unprecedented free-market environment, and the no-government situation has proven to be far better than the repressive government institutions and policies of Barré's era. However, the economic expansion is chaotic and there is a strong new demand for an accountable and effective government that could provide essential public goods for sustainable economic development.