Editing Economy of Somalia (section)

==State failure and economic welfare==
According to the World Bank, within two years of the outbreak of civil war in 1988, Somali state institutions collapsed and "most of the economic and social infrastructure and assets were destroyed". In 2003 the Bank said that despite the absence of a state and its institutions, the Somali private sector experienced impressive growth, but that "most of these sectors are now becoming either stagnant or their growth is hindered due to the lack of investment, trained manpower and the absence of a relevant legal and regulatory framework to enforce rules and regulations, common standards and quality control". The report notes difficulties encouraging and making use of domestic savings for investment, due to the lack of formal financial services and regulatory agencies. The lack of state institutions, the Bank argues, resulted in the prevention of access to international capital markets.<ref>{{cite web|url=http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2004/03/25/000112742_20040325090551/Rendered/PDF/282760Somalia0Country0reengagement0note.pdf|title=Country re-engagement note: Somalia|publisher=UNDP Somalia/World Bank|date=April 2003|pages=1–2|access-date=6 July 2015}}</ref>

In an article published in 2007, [[Libertarianism|libertarian]] economist [[Peter Leeson|Peter T. Leeson]] argues that the Somali state was predatory, and that its collapse has improved the economic welfare of its citizens, with 14 out of 18 key development indicators being more positive in the period 2000-2005 than in 1985–1990.<ref name=LeesonSom>{{cite journal|last=Leeson|first=Peter T.|title=Better off stateless: Somalia before and after government collapse|url=http://www.peterleeson.com/Better_Off_Stateless.pdf|journal=Journal of Comparative Economics|volume=35|issue=4|year=2007|page=14|doi=10.1016/j.jce.2007.10.001}}</ref> Similarly, economists Benjamin Powell, Ryan Ford and Alex Nowrasteh argue that Somalia's economic performance, relative to other African states, has improved during the period of statelessness.<ref name=Powell/> Ersun Kurtulus states that Leeson and Powell, Ford and Nowrasteh's articles provide "the most unequivocal evidence to indicate that Somalia has been faring far better under anarchy than it did under Barre's regime". Kurtulus argues that these authors may provide a valid explanation of the situation in Somalia, but that "the argument appears to be derived from a hypothesis which is rooted in a liberal conceptualisation of statehood rather than in a quantitative analysis which establishes a negative correlation between indicators of state predation and those of economic and social welfare". Kurtulus suggests that the collapse of a repressive state may improve personal and civil liberties, but that such an account "overemphasises endogenous factors that are vested in the domestic arena, while neglecting the exogenous factors that operate at the regional and international level".<ref name=Kurtulus>{{cite journal|title=Exploring the Paradoxical Consequences of State Collapse: the cases of Somalia 1991–2006 and Lebanon 1975–82|first=Ersun N.|last=Kurtulus|journal=Third World Quarterly|volume=33|issue=7|pages=1285–1303|year=2012|doi=10.1080/01436597.2012.691831|s2cid=155003992}}</ref>