Constituting Development in Somaliland

1. Constituting Development in Somaliland Development, Democracy, and Institution-Building Mercatus Center George Mason University October 7, 2009 Sujai Shivakumar PhD Board on Science, Technology and Economic Policy The National Academies

2. The 21st Century Challenge • Numerous independent nation states emerged in the 20th Century… • End of European Imperialism • Marxist-Leninist Revolutionary Struggles • ..but many have not succeeded • Development Failures, State Failures • Plunder and Pillage; Humanitarian Crises • How to achieve democratic governance in the 21st Century? • How do we achieve stable, self-governing societies? • How do we address the Challenge of Development? Sujai Shivakumar PhD

3. The Constitutional Challenge • Whether human societies are capable of establishing good government from refection and choice, or whether they are destined to depend for their political constitutions on accident and force • Alexander Hamilton, The Federalist Sujai Shivakumar PhD

4. Focus on Somaliland Sujai Shivakumar PhD

5. Sujai Shivakumar PhD

6. Somali Society • Clan structure remains the bedrock foundation of the pastoral Somali society • The primacy of clan interests is its natural divisive reflection at the political level. • The viability of the blood compensation paying group depends primarily on how wealthy the members are. • As long there is a social need for the dia-paying group, the traditional structures will persist. • Somali customary laws • Xeer can be contracted into - and out of – and, according to need, contracts can be abrogated, modified, rescinded or new ones made. • Basis of new Somaliland constitution Sujai Shivakumar PhD

7. A Recent History of Somaliland (in Brief) • British Somaliland (1899-1960) • Ruled from British India; Provided security to the Suez Canal and safety for the Empire's vital naval routes through the Red Sea and the Gulf of Aden • Briefly conquered by the Italians during WWII • Merger with Somalia • 1967 Coup by Siad Barre, who instituted a Marxist regime, and became a close ally of the Soviet Union • Disenchantment with Somalia as SL is marginalized in government • Civil War • 1981- 1990: Somali National Movement seeks to topple Barre • Barre responds with areal bombings • Independence (1991) • Somaliland asserts independence—Still remains unrecognized • Inter-clan conflict continues through mid-1990s • Peace conference (1993) and gradual fall in violence; Rebuilding begins • Mid to late1990s—New Constitution adopted Sujai Shivakumar PhD

8. Today’ Presentation • Institutions and Development • Development as Adaptive wellbeing through Collective Action • Institutions as Technologies for Successful Collective Action • Assessing the State as an Institution • Limits of State-led Development • Role of Democracy in Development • Constituting Somaliland • “Starting from Here” Sujai Shivakumar PhD

9. Institutions and Development Technologies for Successful Collective Action

10. The Meaning of Development • Development concerns the realization of our adaptive wellbeing through productive association with others • Institutions matter for development • Represent a shared understanding of rules needed for collective action • We need to recognize and renew these shared institutional resources • Many assume state provides institutional basis for development Sujai Shivakumar PhD

11. State Governance & Development • Traditional Interpretation: Development as Transformation • Features of a “developing” country Features of a “developed” country • Aid to facilitate this process by filling gaps • Role of the State is to transform society from developing to developed status • Agents of state to formulate and administer policies • Constitution typically recognized as a charter describing the organization of the state and legitimizing coercion by the state • The State often does not provide the institutional basis for this transformation Sujai Shivakumar PhD

12. What is an Institution? • They are rules, socially considered • By structuring human interaction, they • Help each anticipate the actions of others • Reduce uncertainty, promote coordination and cooperation • To be successful, rules must be • Reliable—triggering consistently in similar circumstances • Recognizable—subject to broad awareness • Non-arbitrary—seemingly dependant on general principles Sujai Shivakumar PhD

13. Institutions and Development • Institutions are important because successful collective action is needed for growth and development • We need to cooperate successfully to grow food, build roads, maintain safe neighborhoods, etc. • Successful collective action also needed to craft and maintain rules of the market and collective decision-making • When the social technologies for collective action are kept in good repair, we are better off • Citizens are better equipped to solve problems • Well maintained institutions ensure our improved adaptive well being Sujai Shivakumar PhD

14. Addressing Collective Action Situations lies at the Heart of Development • Collective Action Situations exist where contributions from multiple actors are required to produce joint outcomes • Collective Action Problems occur when unresolved • Motivation Problems and • Information Problems …create sub-optimal outcomes Sujai Shivakumar PhD

15. Motivation problems • Social Dilemmas: Potential conflict between individual gain and collective benefits • Provision of public goods (public safety, health, knowledge, etc.) • Provision and maintenance of common-pool resources (protection of forests, wildlife, species, lakes, rivers, oceans, atmosphere) • If benefits can be obtained by an actor without contributing, temptation always exists to free ride on the efforts of others. May also face overuse. Sujai Shivakumar PhD

16. Information problems • Missing information • Time and Place Knowledge • Knowledge of local realities, rules, and relationships • Asymmetric information • Moral Hazard • Principle-agent problems • Signaling Problems • Fiscal Illusion (Policy Context) Sujai Shivakumar PhD

17. Societies around the world have variously developed institutional solutions to these problems Are these problem-solving technologies still relevant?

18. An example of an Institutional Solution to a Free Rider Problem • Free riders are those who seek to benefit from the actions of others without contributing their share of the effort • Solution: Ubudehe in Rwanda • Ubudehe is rooted in a long history of inclusive community participation in tilling fields for planting crops • Found among the Hutu and Tutsi communities in Rwanda, long before genocide of the 1990s Sujai Shivakumar PhD

19. An example of an Institutional Solution to a “Tragedy of the Commons” Problem • The Tragedy of the Commons refers to a failure of cooperation in the shared use of a Common Pool Resource • When needed institutions are absent, individuals may be motivated to use more than their share of a limited but openly available resource • Leads to non-sustainable use and degradation • Solution: Xeer in Somalia • Expectations for arrangements to share scarce grazing land and water sources among nomadic pastoralists in northern Somalia Sujai Shivakumar PhD

20. People everywhere face challenges of collective action • In developed countries, well adapted networks of institutions generally lead to productive outcomes • In poor countries, individuals often face negative incentives, making it difficult to • invest in economic activities • Provide public goods • Improve communally held resources • This failure of social cooperation is rooted in a variety of social dilemmas that remain unsolved—there are no relevant institutions Sujai Shivakumar PhD

21. Crafting Solutions to Collective Action Problems • A Complex task… • Collective Action Problems are often highly localized • Social dilemmas are numerous and often difficult to diagnose • Different interests and theories about working properties of rules can make agreement difficult • …but one that is necessary • Existence of institutions like ubudehe and xeer show that it is possible Sujai Shivakumar PhD

22. Crafting Solutions to Collective Action Problems • Improving development requires a focus on the multiple contexts within which citizens can identify and craft solutions to problems of collective action • This perspective differs from the State-centered approach to development Sujai Shivakumar PhD

23. Ideology of the State • The State as the Preeminent Tool for Development • Rulership • unity of power to maintain unity of law critical for social harmony—Hobbes • Governance • Bureaucratic Public Administration—Weber & Wilson • Aggregate data Develop Policy Implement Policy • This ideology still widely articulated • But is the State competent to address the range of collective action problems facing its subjects? Sujai Shivakumar PhD

24. Is the State Competent? • The Knowledge Problem • Agents of the state cannot gain “knowledge of time and place”—Friedrich Hayek • The Motivation Problem • Possibility of self-seeking and opportunistic agents of the state —James Buchanan • The Intellectual Crisis of Public Administration • Ideology of state stifles modes of creative inquiry and participation among citizens in solving problems of collective action —Vincent Ostrom Sujai Shivakumar PhD

25. Failures of the Ideology of the State • The emphasis on state-led development has often ruined capabilities for locally based problem-solving • The results have often been catastrophic • Rwanda • Indigenous institutions like ubudehe have been overlooked in favor of the “modernizing” potential of the state • Resulting deterioration of networks of trust contributed to the genocide • Somalia • UN imposed constitution failed to account for local institutional resources, like xeer • Somali rulers exploited indigenous institutions to stay in power, fraying the constitutional fabric of society • Resulting in famine, civil war, state collapse Sujai Shivakumar PhD

26. What is the alternative? • Begin with the recognition that failures of development are rooted in institutional failures • The state often does not address underlying problems of collective action • Organization of state often fosters perverse incentives of its own • Need to develop an alternate approach to the puzzle of development • One based on a deeper understanding of democracy and constitutional government Sujai Shivakumar PhD

27. The Meaning of Democracy Foundations of Constitutional Governance

28. The Role of Democracy in Development • Democracy concerns the norms of inclusion in public discourse and decision making • Participation and Debate • Ensures that policy decisions draw on knowledge that individuals have of their own time and place • Consensus • Helps strengthen common understandings about new decisions and rules—creating an institutional basis for successful collective action Sujai Shivakumar PhD

29. Centralized Democracy? • Popular view equates democracy with elections of representatives to a national government • Some believe that party politics associated with elections interfere with State’s ability to govern wisely • Idea underpins current efforts in “Nation-Building” • Centralized democracy can lead to ‘political free-riding’ that stifles local initiative and problem-solving • Tocqueville Sujai Shivakumar PhD

30. Polycentric Governance • Tocqueville, in Democracy in America, described a system of: • Multiple overlapping arenas of political authority • Various scales, from community organizations, to state government to national government • Governance structures are adaptive framework for problem-solving • World Wide Web is a modern example • Role of public entrepreneurship in seeking solutions to problems of collective action Sujai Shivakumar PhD

31. Foundations of Constitutional Governance • Constitutionally Constrained Democratic Governance • Focus on collective action within institutional constraints • Citizens addressing their common needs through the freedom to integrate their actions with those of others within crafted rules and innovated institutional arrangements • The Challenge: Crafting a system of interlinked problem-solving arenas Sujai Shivakumar PhD

32. Achieving a Self-Governing Civilization Starting from Here Building on Indigenous Institutional Foundations

33. Starting from “here”—Why? • We have to deal with indigenous institutions because they represent existing communities of understanding • Yet, we must recognize that evolved institutional forms, presented as indigenous or traditional do not necessarily denote optimal or even acceptable solutions to prevailing collective action problems Sujai Shivakumar PhD

34. Starting from “here”—How? • Challenge lies in developing and modifying existing rules and constitutional amenities • Need to harness more effectively the problem solving potentials latent in various locally focused indigenous institutions • Need to draw on existing mechanisms/ shared concepts to encourage rule change • Normative bases for rules—conjectural evolutionary claims Sujai Shivakumar PhD

35. Reviving indigenous capabilities for problem-solving • Ubudehe is being revived in Rwanda today • Focused on cellule level to rebuild local institutions and to encourage individuals to solve problems in association with each other • Xeer is underpinning new governance structures in Somaliland • Concept of covenanting now used to craft and maintain collective action institutions • A major Challenge of Development is to draw on such indigenous practices in crafting capabilities for self-governance Sujai Shivakumar PhD

36. Crafting Capabilities for Self-governance in Somaliland • A challenging environment • Civil conflict following the collapse of the Somali State • Clan-on-clan violence exacerbated by destruction of common pool resources • Recognizing the underlying collective action problem • Tragedy of the Commons  Conflict over Resources • Leveraging existing institutional capital: “Xeer” • Traditional ad hoc arrangements to share grazing land and water sources among nomadic pastoralists in northern Somalia • Action-Aid drew on clan traditions to craft new institutional arrangements before delivering aid Sujai Shivakumar PhD

37. Constituting Somaliland • Today, Xeer is underpinning new governance structures in Somaliland • Concept of covenanting now used to craft and maintain collective action institutions at various levels • The broader Challenge for Development in Africa and elsewhere is to draw on such indigenous practices in crafting capabilities for self-governance Sujai Shivakumar PhD

38. Somaliland’s “Success” • The chaos in Somalia obscures a remarkable political development in Somaliland. • Somaliland, which declared its independence in 1991, has • held three consecutive competitive elections since 2001, • has a parliament with opposition parties, and • boasts a growing economy propelled by the private sector. • The key to its success • The integration into politics of traditional Somali models of governance by consultation and consent • A contrast to the standard development paradigm Sujai Shivakumar PhD

39. To Conclude Achieving a Self-Governing Civilization

40. Achieving a Self-Governing Civilization • Alexander Hamilton • Presumption that societies of men and women can choose good government through reflection and choice • Federalism as the foremost theory of citizenship • Alexis de Tocqueville • A new age of democracy will only succeed to the degree that it developed a new science of politics that is based on principles of association, rather than on the ideology of state Sujai Shivakumar PhD

41. Achieving a Self-Governing Civilization for the 21st Century • The challenge of Constitutional Political Economy lies in looking beyond the ideology of state governance • Need to understand the nature of collective undertakings with reference to: • Multiple levels of governance • Multiple sources of adaptation Sujai Shivakumar PhD

42. Thank you Sujai Shivakumar, PhD The National Academies 500 Fifth Street NW Washington DC 20001 Tel: 202 334 1337 Email: sshivaku@nas.edu

43. Agenda for Future Research: Recovering from State Failure • Analyze link between Institutional conditions and Development Sustainability • Impact on Aid on Successful Collective Action • Study local institutions and local governance structures • Recognize role of indigenous institutions • Modernize institutions to address contemporary challenges • Reconciling Bottom-up and Top-down governance • Incentives to recognize and nurture local/indigenous institutions • Training in Institutional Analysis • Build capacity to recognize and leverage existing institutional potentials Sujai Shivakumar PhD

44. Publications • The Constitution of Development • Crafting Capabilities for Self Governance • Palgrave Macmillan • The Samaritan’s Dilemma • The Political Economy of Development Aid • With Elinor Ostrom, Clark Gibson and Krister Andersson • Oxford University Press Sujai Shivakumar PhD