State Capacity and Trade in the Ethiopia-Somali Borderlands

Abstract

Cross-border trade is an enduring feature of African borderlands. Ethiopia had a long history of informal economic relations in its frontiers. This study examined the prevalent trends of economic relations in the Ethiopia-Somaliland borderlands, with particular reference to the post-1991 period. These trends are assessed in the context of the entrenchment of state authority. The paper found that ‘informal’ trade, which is pervasive in these borderlands, is not as such informal. Indeed, the distinction between formal and informal is found to be imprecise. The conventional view holds that the presence of a large size of informal economy is a manifestation of state’s weakness. Contrary to the conventional wisdom, this paper shows that state capacity is not something to be owned or possessed but rather is a result of a multifaceted negotiation of actors on the ground.