This Just In: “Anarchy” Not Necessarily Disorderly…

A new short report from the World Bank, “Anarchy and Invention,” shows that there are sometimes ways to achieve voluntary coordination without hitting people on the head. It draws on the experience of Somalia (the subtitle is “How Does Somalia’s Private Sector Cope Without Government?”) According to the authors,

Somali entrepreneurs have used three methods to compensate for the lack of effective government regulation. First, “importing governance” by relying on foreign institutions–for example, for airline safety, currency stability, and company law. Second, using clans and other local networks of trust to help with contract enforcement, payment, and transmission of funds. Third, simplifying transactions until they can be carried out with help from neither the clan nor the international economy.

The authors examine the cases of telecommunications, electricity and water provision, air travel safety, adjudication of disputes, currency provision, international fund transfers, and savings systems.

The study offers a neat empirical consideration of some important issues and should be helpful to anyone interested in the study of the voluntary provision of public goods. (Those interested in a general theoretical framework for the voluntary provision of public good could — since they’re already on my web page — see my essay “Intellectual Property: A Non-Posnerian Law and Economics Approach” in the Hamline Law Review, esp. pp. 261-277 and 283-287, in which I set out the general characteristics of public goods, provide bibliographical references that may prove useful to others writing on the topic, and give examples of the voluntary provision of goods normally asserted to require coercive provision.)

(Thanks to Brian Doherty at Reason for the lead.)

2 Responses to “This Just In: “Anarchy” Not Necessarily Disorderly…”

  1. Another recent BBC article has some interesting quotes and when compared to the World Bank article, illustrate why some people think the BBC is biased.
    For example:

    “Somalia is a pure free market,” one diplomat told me….But is a pure free market a good thing?

    Speaking from a theoretical point of view, some economists might say so, but in the very harsh reality of Mogadishu, it means guns and other military hardware are freely available in a market not far from the city centre.