Security in the absence of a state: Traditional authority, livestock trading, and maritime piracy in northern Somalia

Published date01 October 2020
Date01 October 2020
Journal of Theoretical Politics
2020, Vol.32(4) 497–537
ÓThe Author(s) 2020
Article reuse guidelines:
DOI: 10.1177/0951629820941110
Security in the absence of a
state: Traditional authority,
livestock trading, and
maritime piracy in northern
Avidit Acharya
Stanford University, Stanford, CA, USA
Robin Harding
University of Oxford,Oxford, UK
J. Andrew Harris
New York University Abu Dhabi, Abu Dhabi, United Arab Emirates
Without a strong state, how do institutions emerge to limit the impact of one group’s predation
on another’s economic activities? Motivated by the case of northern Somalia, we develop a model
that highlights the monitoring challenges that groups face in making cooperation self-enforcing,
and two key factors that influence their likelihood of overcoming this challenge: the ratio of eco-
nomic interests across productive and predatory sectors, and the existence of informal income-
sharing institutions. Our model explains why conflicts between pirates and livestock traders can
be resolved in the region of Somaliland, where the ratio of economicinterests favors the produc-
tive sector and traditional institutions promote income sharing between groups, but not in the
region of Puntland, where these conditions do not hold. The model also accounts for several of
the empirical patterns in the relationships between piracy, livestock exports, and conflict in both
Corresponding author:
Avidit Acharya, StanfordUniversity, Encina Hall WestRoom 406, Stanford, CA 94305-6044, USA.
conflict, cooperation, imperfectmonitoring, piracy, Somalia, price shocks, statebuilding
1. Introduction
An important function of the state is to promote cooperation among groups, limit-
ing the inefficient externalities that one group’s predation creates for the productive
activities of another.
To provide this function, the state requires the institutional
capacity to maintain law and order, enforce contracts, and engender peace. In some
states, the formal institutions that support cooperation are insufficient or even
absent entirely, and it is up to rival groups to locate and implement a self-enforcing
agreement that finds peace between them.
Existing work, particularly the literature on repeated games, provides some
answers to when and how cooperation can be made self-enforcing when relational
contracts must substitute for formal contracts due to the absence of formal con-
tracting institutions.
Much of this theory is abstract, however, and does not pro-
vide specific insights into how cooperation is sustained in particular applications.
As Kandori and Obayashi (2014) have argued, empirical studies motivated by the
theory of cooperation, such as those in Ostrom (2015), provide detailed studies of
particular cases but do not fit the cases to models built on existing theory.
This paper contributes to filling the gap by developing a new application of the
theory of cooperation to the case of northern Somalia, where formal state institu-
tions have been largely absent. In this region of the world, traditional clan-based
authorities operating locally at the level of sub-clans or lineage groups (hereon sim-
ply ‘clans’) have had to discover and support a system of cooperation between their
members to maintain peace. The case of Somalia provides us with some variation
in the degree of success of these authorities, shedding light on the factors that are
most important for fostering cooperation in such a setting. We first provide an
overview of the case, and then move on to describe our formal analysis of it.
For the past 20 years, and throughout much of Somalia’s history, the provision
of basic public goods such as economic governance and security has been the pur-
view of clan leaders who rely on the informal institutions of traditional clan author-
ity (LeSage, 2005). Somalia’s longtime ruler, Siad Barre, sought to dismantle
traditional institutions and limit the authority of clan leaders, but clan structures
were resilient to his efforts and the country reverted to these institutions after his
regime and the Somali state collapsed in 1991. Clanship remains the fundamental
basis of security in Somali society (Gundel, 2006; Lewis, 2004).
As the key providers of local governance in northern Somalia, clan leaders have
grappled with the dramatic rise in maritime piracy in the Gulf of Aden that took
place after 1991. In addition to damaging international trade, this increase in piracy
has affected the terms of Somalia’s crucially important livestock sector. Even when
piracy attacks are not directed at ships transporting Somali livestock abroad (as
they typically are not), piracy hurts the livestock trade because it increases shipping
and insurance costs. The income of Somalia’s livestock herders is thus inversely
498 Journal of Theoretical Politics 32(4)
related to the frequency and scale of piracy attacks off the Somali coast, creating
the potential for conflict between clans that vary in the extents to which piracy and
the livestock trade contribute to their income. Without a state to enforce coopera-
tion, clan leaders have had to find peaceful ways to resolve their differences.
Clans in the two northern Somali regions of Somaliland and Puntland have
shown markedly different levels of success in their ability to find peace. Clan lead-
ers in Somaliland have been able to find ways of cooperating, building an agree-
ment that has begun to resemble a formal state. They have done so by promoting a
traditional system of cooperative income sharing that goes back to pre-colonial
times. Puntland, in contrast, remains an economically fragmented, conflict-ridden
society, with high levels of violence and weak state institutions.
Motivated by the differences between Somaliland and Puntland, we develop a
model that explains why cooperation would be more plausible in Somaliland than
in Puntland. The model highlights two key features of the relationship between
livestock traders and pirates. The first is that the livestock traders have incentives
to sanction piracy when they have evidence that it is on the rise. The second is that
it is difficult to monitor piracy. The traders cannot know just how much piracy is
taking place, and must infer it from noisy signals of pirate activity such as their
own revenues and the observable income of the pirates. This feature makes it
impossible to sustain a self-enforcing agreement in which there is perpetual cooper-
ation between the two groups; but some cooperation may be possible with the help
of these noisy signals.
In times when livestock exports are up, clans that rely comparatively more on
livestock income cooperate with those that rely relatively more on piracy income by
sharing part of their income from the livestock trade in exchange for the pirates
reducing their overall level of predation. This benefits the livestock group because it
mitigates the negative externality that piracy has on the livestock trade. However,
to provide the pirates with the incentive to lower their piracy, the livestock traders
must (credibly) threaten the piracy clans with conflict when they have evidence that
piracy is on the rise. Because the evidence for piracy is noisy, conflictwill sometimes
take place even if the pirates are not cheating.
For this mode of cooperation to be self-enforcing, two conditions must be met:
(i) the punishment to pirates for cheating should be sufficiently great so as to deter
it, which happens when livestock interests overwhelm piracy interests; and (ii) the
rewards to pirates for cooperating must be sufficiently great, which happens when
clan leaders can successfully encourage existing practices of income sharing in soci-
ety. Both of these conditions are met in Somaliland but not in Puntland.
Our model helps make sense of three patterns that we see in the data from
Somalia. The first is that piracy is lower off the coast of Somaliland when livestock
export levels are high, but there is no relationship between piracy and livestock
exports in Puntland. The second is that increases in conflict appear to follow
increases in piracy in both regions, but this relationship is subject to more noise in
Somaliland. The third is that export price drops appear to be followed by periods
of conflict in Somaliland, but not in Puntland.
Acharya et al. 499

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