Chapter 6 details how the collapse of the State in Somalia led to the emergence of severe inter-clan conflicts. These conflicts were rooted in wrenching political conflicts over the monopolization of labor remittances and local currencies and characterized by continued attempts to institute law and order through military and ideological means. In the wake of state collapse, remittances continue to represent the backbone of the Somali economy. These are transferred through informal banking systems and remain untaxed by local authorities. The informal economy’s efficiency in facilitating currency trade, and the extent to which ethnic and religious networks control access to the wages of expatriate Somali labor is determining the political fortunes of local elite’s and variable patterns of state building in different regions of the country. The Somali case calls into question the very principles and analysis of conventional state building and “sovereignty” of nation states in less developed societies.

Chapter 6 details how the collapse of the State in Somalia led to the emergence of severe inter-clan conflicts. These conflicts were rooted in wrenching political conflicts over the monopolization of labor remittances and local currencies and characterized by continued attempts to institute law and order through military and ideological means. In the wake of state collapse, remittances continue to represent the backbone of the Somali economy. These are transferred through informal banking systems and remain untaxed by local authorities. The informal economy’s efficiency in facilitating currency trade, and the extent to which ethnic and religious networks control access to the wages of expatriate Somali labor is determining the political fortunes of local elite’s and variable patterns of state building in different regions of the country. The Somali case calls into question the very principles and analysis of conventional state building and “sovereignty” of nation states in less developed societies.