Political Economy Of War In Somalia: The Role Of Piracy

Abstract

The politics of a country have always been closely related with its economy. Political Economy is ultimately concerned with the ways in which political forces (states, institutions, individual actors, etc.) shape the systems through which economic interactions are expressed, and conversely the effects that economic interactions (including the power of collective markets and individuals acting both within and outside them) have upon political structures and outcomes. This study will look at political economy and how it relates to conflicts. It argues that one reason for catastrophes especially in the political economy perspective is the ability of combatants and rebel groups to raise funds by selling what might be called ―booty futures‖ – exploitation rights to natural resources that they hope to capture in battle. The argument is that the sale of booty futures is an unusually dangerous form of finance, because it tends to favor the weaker party in a conflict – either a growing insurgency, or a government on the verge of losing a civil war. It can hence contribute to both the onset and the duration of civil wars. This study describes the booty futures mechanism, and illustrates it with case study of the conflict in Somalia, where it looks at piracy on the coast of Somalia and links it with the concept of booty futures.