What Have We Learned? Rethinking International Approaches to Development and State-Building in Fragile States through the Somali Case
Issue 9
Somalia’s fragility is not a temporary disruption. It is a deeply embedded, systemic condition shaped by a complex, negotiated political order. For decades, international engagement has treated fragility as a technical deficit to be solved through institution-building. But Somalia’s reality defies such linear models. Authority and legitimacy are distributed across clans, religious leaders, business networks, local administrations, and armed actors. The state is not absent. It is plural, adaptive, and constantly renegotiated.
To engage effectively, development actors must shift from template-driven state-building to a political economy-informed approach rooted in Somalia’s polycentric social contract. This means recognizing informal institutions not as obstacles, but as the operating system of governance.
The Social Contract as It Is – Not as We Wish It Were
In Somalia, the social contract is fragmented vertically (across federal, state, district, and informal authorities) and horizontally (through xeer, Sharia courts, and clan mediation). Public goods are financed by diaspora remittances, religious charity, and business associations. Legitimacy is earned through fairness, dispute resolution, and service delivery, not formal authority.
This layered contract explains why past efforts by international partners have yielded limited impact. In fact, they formalized elite bargains without broad societal anchoring. The result is procedural progress without meaningful change for ordinary Somalis. The following data illustrates this disconnect:
· 54% of Somalis live below the national poverty line (less than $2.06/day)
· About 1 in every 4 Somalis (≈23%) is internally displaced
· More than 3 million children are currently out of school
Development as a Political Gamble
Drawing on Stefan Dercon’s Gambling on Development, the central insight is clear: development succeeds when elites make a credible commitment to growth and inclusion, even if institutions are weak. Somalia’s challenge is not just technical capacity but the absence of elite bargains that prioritize national development over narrow interests.
Institutional economics reinforces this view: institutions matter not because they are formal, but because they shape incentives and behavior. Somalia’s informal institutions (e.g., clan networks, religious courts, and business associations) are adaptive responses to weak formal governance. They provide the rules of the game where formal institutions cannot.
The Polycentric Social Contract Loop (PSCL)
The PSCL offers a repeatable, adaptive cycle for engagement:
See – Map the lived social contract. Identify who provides protection, justice, and services; how money flows; and which rules people follow and why.
Bargain – Co-create narrow, time-bound compacts around specific problems. Convene coalitions with real enforcement power and make the terms explicit.
Deliver – Route support through trusted networks, Sharia-compliant finance, diaspora co-investment and invest in social adaptation.
Learn – Measure legitimacy and transaction costs, not just formal outputs. Track compliance, fairness, usage, and dispute resolution. Iterate based on community feedback.
This approach meets Somalia’s realities where they are and helps them evolve through negotiated practice.
Resilience Through Social Adaptation
In Somalia, resilience is social before it is infrastructural. Pastoralists manage risk through mobility and negotiated access; households rely on remittances and savings groups; communities resolve disputes through elders and religious leaders. Supporting this resilience means protecting mobility corridors, financing community-managed safety nets, and integrating customary justice into broader reforms.
Private Sector Engagement: Meeting Enterprises Where They Are
Somalia’s most dynamic capital comes from informal ecosystems – diaspora remittances, trust-based trade, and Sharia-compliant finance. Development Finance Institutions (DFIs) can add value by tailoring instruments to these realities:
Risk-sharing facilities via local financial institutions.
Sharia-compliant products for MSMEs.
Diaspora co-investment vehicles with partial guarantees.
Regulatory sandboxes for digital identity and mobile money.
Rather than waiting for full formalization, development finance should help enterprises de-risk and professionalize incrementally.
Knowledge Production: Grounded and Inclusive
Global datasets often miss Somali-specific dynamics. Co-producing analysis with Somali actors can reveal the real incentives behind behaviour – why people pay certain taxes, which courts they choose, and how fairness is perceived. Measurement should focus on legitimacy, usage, and outcomes that matter to communities.
Challenges to Adaptive Engagement
Despite its promise, this approach faces real risks:
Elite resistance: Elites may resist reforms that threaten their power. Without elite buy-in, even well-designed interventions fail.
Capture and exclusion: Local compacts may be dominated by powerful clans, marginalizing minorities, women, and youth.
Weak feedback loops: Iterative learning requires reliable data and responsive institutions, which may be lacking.
Security volatility: Shifting alliances and conflict dynamics can disrupt compacts and undermine trust.
Donor constraints: Donor systems often prioritize disbursement and compliance over adaptation and learning.
These challenges are not reasons to retreat; they are signals to design smarter. Political guardrails, inclusive coalitions, and co-produced knowledge can mitigate these risks.
Defining Success: A Thicker Social Contract
Success in Somalia is not measured by laws passed or systems installed, but by political outcomes:
More people comply with fair rules.
Disputes are resolved peacefully.
Economic transactions are safer and cheaper.
Marginalized groups gain real voice.
These are political outcomes with technical enablers, not technical outputs that somehow produce politics.