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.