Somalia - the perfect lab to test free market theories?!

free market theories are mostly based on logic and inference from select situations. economists generally lack the luxury of other scientists - to create a condition in a country to test a hypothesis like say a physicist does in his laboratory.

but what if a whole economy by some quirk in the governance chain was filled with free market experiments and the results available to all to interpret?

while it may sound perverse, improvised Somalia should logically be a free market economists delight. we can search for answers why the market does a great job in areas like telecom and works rather inefficiently in infrastructure creation like roads.

" Somalia has lacked a recognized government since 1991—an unusually long time. In extremely difficult conditions the private sector has demonstrated its much-vaunted capability to make do. To cope with the absence of the rule of law, private enterprises have been using foreign jurisdictions or institutions to help with some tasks, operating within networks of trust to strengthen property rights, and simplifying transactions until they require neither. Somalia’s private sector experience suggests that it may be easier than is commonly thought for basic systems of finance and some infrastructure services to function where government is extremely weak or absent." says the finding from a World Bank report tiltled "Anarchy and Invention: How Does Somalia’s Private Sector Cope without Government?"

telecom in Somalia seems to be a great success story with the country enjoying one of the lowest rates in Africs as this article illustrates. "Three phone companies are engaged in fierce competition for both mobile and landline customers, while new internet cafes are being set up across the city and the entire country." the rather old BBC story adds ( i coundnt google out anything more recent), "It takes just three days for a landline to be installed - compared with
waiting-lists of many years in neighbouring Kenya, where there is a stable, democratic government. And once installed, local calls are free for a monthly fee of just $10. "

now, i guess , in india, we shouldnt be as liberal as we are in our praise for the govt and the entrepreneurs for the success in the sector but just cheer everyones invisible hands!!

i wonder how economics plays out in countries where governance is almost non existent - where market or others beastly forces reign - the areas the invisible hands works but is paralyzed elsewhere. -- in Markets sans ministers.