3. Somalia
● 10 millions people
● 1960 independence – 1969 dictatorship
● 1991 collapse of the central government
● 2004 Transitional Federal Government
established (but with no power)
● 2007 another war, 2011 draught and famine
● 2012 Federal Government of Somalia – still not
clear how much power it has
11. Somalia
● Predatory government can be worse than
anarchy
● It is not fair to compare anarchy in a place with
low political culture to state in a place with
hight political culture
12. Definition
● In ancient Greek - ναρχία combines ν (an),ἀ ἀ
"not, without" and ρχός (arkhos), "ruler,ἀ
leader."
● It have a few colloquial meanings – we all
know them more or less.
● in 1840, Pierre-Joseph Proudhon adopted the
term in his treatise What Is Property? to refer to
a new political philosophy, anarchism, which
advocates stateless societies based on voluntary
associations
13. Definition
● “a state of society without government or law”
- that looks like the definition used by political
sciences
● In the book anarchy – government absence
● Government - “a territorial monopoly on
violence – on social rule creation and
enforcement” (the classical definition)
● In the book the author is not content with it –
he wants something more narrow – but it is not
really clear how exactly
14. Games
Prisoner B stays silent
(cooperates)
Prisoner B betrays
(defects)
Prisoner A stays silent
(cooperates)
Each serves 1 year Prisoner A: 3 years
Prisoner B: goes free
Prisoner A betrays
(defects)
Prisoner A: goes free
Prisoner B: 3 years
Each serves 2 years
● Prisoner dilemma
● Pretty depressing - the rational strategy is to
defect
15. Games
Seller brings goods
(cooperates)
Seller stays home
(defects)
Buyer buys goods
(cooperates)
Each earns 1 Each earns 0
Buyer steals goods
(defects)
Buyer: earns 10
Seller: earns -10
Each erans 0
● It is still rational to defect
16. Games
● In real life games are more complicated – more
moves, many players, repeatable
● A 'government' to punish defectors – easy
solution, until we try to analyze the incentives
of the members of the government
● Without government punishment is mostly not
dealing any more – i.e. boycotting
● This can work in repeatable games and in
multilateral setup
17. Social distance reducing signaling
● Strategy for heterogeneous societies
● The trader invests by learning customs,
language, religion of the other people
● This only pays off if he trades for a long time
Buyer invests 50
Seller brings goods
(cooperates)
Seller stays home
(defects)
Buyer buys goods
(cooperates)
Each earns 1 Each earns 0
Buyer steals goods
(defects)
Buyer: earns 10
Seller: earns -10
Other sellers boycott the
buyer
Each erans 0
19. Trading in pre-colonial Africa
● Caravans were mobile and had overwhelming
power
● Producers were stationary and weak
● Producers could produce for trade (ivory,
beeswax, rubber) or for subsistance
● Traders could trade, plunder or stay home
● Nash equilibrium – producers live on
subsistance, traders stay home
20. Trading in pre-colonial Africa
● Trading on credit changes the equilibrium
● Additionally the trade-able goods need to be
harvested before being sold – i.e. the producers
don't need to keep stock of plunder-able goods
● Often the credit given is also something that
does not have much value for the traders or
something that was consumed quickly
● Trading on credit grows when slave-trade
declines
22. Leges Marchiarum
● England and Scotland in constant war
● No formal law enforcement across the border
for more than 3 centuries
● Customary laws – later codified
● Enforcement based on reciprocation – many
incentives to participate
● Days of truce – a kind of court, juries from both
sides of the border
24. Efficient Plunder
● It is better for both sides when the victim
surrenders without battle
● Plunder contracts – templates in many
languages
● Enforcement through: hostage exchange
(sometimes hostages could enforce the contract
in court), reputation
● Prize courts checked if the prisoners were
treated well
26. Pirate constitutions
● Everyone was required to sign
● Democratic
● Pretty short
● Covered stuff like rights of everyone,
preventing shirking, punishments, established
offices (captain and quartermaster), regulated
stuff like cleaning weapons, curfew, gambling
etc.
● Checks and balances
28. My takeaways
● You can have rules without state
● They are enforced in many surprising ways
● We assume that enforcement is a problem
solved – but maybe we burden the state too
much here?
