Anarchy and Invention

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Our most popular discussion ever was sparked by a paper by Tatiana Nenova:

Somalia has lacked a recognized government since 1991 - an unusually long time. In extremely difficult conditions, the private sector has demonstrated its much-vaunted ability to make do. To cope with the absence of the rule of law, private enterprises have been using foreign jurisdictions or institutions to help with some tasks, operating within networks of trust to strengthen property rights, and simplifying transactions until they require neither. Somalia's private sector experience suggests that it may be easier than is commonly thought for basic systems of finance and some infrastructure services to function where govenrment is extremely weak or absent.

The paper is also reprinted in The Market for Aid.

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