Somalia and the theory of anarchy explains how Somolia has “stabilized” with a number of competing “governments” keeping the peace:
Somalia continues to provide a unique test of the theory of anarchy (competitive governments) promoted by David Friedman, Murrary Rothbard and others. Somalia has no government but in many respects it is booming. Somalia has what is perhaps the best phone system in Africa, for example, because entrepreneurs are unburdened by any regulation.
From Coke and al-Qaeda:
There are two ways to run a business in Somalia. You can pay off the local warlord, not always the most trustworthy of chaps, and hope he will stop his militiamen from murdering your staff. Or you can tell him to get stuffed and hire your own militia. After 13 years of civil war, businessmen are increasingly plumping for the latter option, and their defiance has been rewarded. A veneer of normality is returning to the world’s most chaotic country. An economy, of sorts, is beginning to thrive.
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Perversely, this renaissance has been made possible by Somalia’s continuing fragmentation. There is still no proper central government but, where once there was only a handful of warlords, there are now at least 24, and that is only the serious ones. With smaller fiefs to pillage, few can now afford the $100,000 or more that it costs to wage a six-hour battle, so such battles are less common. This is what passes for peace in Somalia, and it is enough to tempt many homesick exiles to return. They bring money as well as skills and contacts. In the past few years, hospitals, schools, businesses and even a university have appeared.In some ways, anarchy makes doing business easier. There are no formal taxes — given how heavily-armed the average Somali is, these would be hard to collect — and no regulation whatsoever. But the costs of chaos outweigh the benefits. You can roar through a warlord’s road block unmolested if you have ten gunmen in the back of your pickup, but you have to pay your gunmen. Nationlink, one of the country’s three mobile-phone operators, employs 300 guards to protect 500 staff.