Logistics Contracts and the Political Economy of State Failure: Evidence from Somalia

Abstract

Scholars have long sought to understand how economic rents may inhibit the formation of effective and accountable government. Prevailing interpretations of empirical state failure do not adequately account for economic connections and rents. Based on in-depth ethnographic fieldwork and original source material from the Somalia context, this study shows how the dominance of the logistics economy, as a system of ‘graft’ endogenous to state-building, has contributed to empirical state failure. Empirical state failure is characterized by intra-elite struggle, endemic political violence, and insecurity including the threat posed by Islamic extremism. Contributing to the study of political settlements, political clientelism, and business–state relationships in Africa, findings from this study offer new insights for understanding how the dominance of logistics rents and lead firms within a political system may prevent the establishment of legitimate, centralized authorities. These findings contribute to the broader study of Africa’s political economies which have experienced protracted civil war and post-conflict reconstruction. In conclusion, it argues how economic development, procurement reform agendas, and efforts to withhold or withdraw aid through economic sanctions fail to resolve endemic conflict and governance issues due to vested interests, elite fragmentation, and polycentric aid practices. Instead, both government policy and foreign interventions continue to empower lead logistics firms (as skilful political entrepreneurs) that destabilize the Federal Government of Somalia.