For years, studies of state formation in early and medieval Europe have argued that the modern, representative state emerged as the result of negotiations between autocratic governments in need of tax revenues and citizens who were only willing to consent to taxation in exchange for greater government accountability.
This paper presents evidence that similar dynamics shaped the formation of Somaliland’s democratic government. In particular, it shows that government dependency on local tax revenues — which resulted from its ineligibility for foreign assistance — provided those outside the government with the leverage needed to force the development of inclusive, representative and accountable political institutions.
For the uninitiated, Somaliland is a de facto country in the North of the legal fiction called Somalia, hence it’s ineligibility for foreign assistance.
The basic mechanics hypothesized, that a government with access to aid could afford to do things that dependence of tax revenue from economic activity could not, is familiar. Early in University I speculated that the success of Japan/South Korea/Taiwan could be attributable to the lack of resource rents to pay for bad governments. Fruitfully this led me to the resource curse literature and thence to other places.
Something I’ve wondered ever since is how Australian history (that is NSW and the colonies that formed directly from it) might have changed if the Blue Mountains had been crossed earlier than they had been. Were rents available from wool earlier on the strangely benevolent character of the earlier colonial government [fn1] may not have been so necessary and the political culture that provided for the defeat of the bunyip aristocracy may never have arisen. Imagine a class of wool barons creating the same stupid culture that the Plantation owners in the Deep South did, reading Walter Scott novels and romanticizing their inequitousness . Still, we still may see Twiggy Forrest swapping his overalls for a kilt.
I also wonder if (and this may not be probable) if the naval character of early government (until Macquarie all governors were navy men) had anything to do with it. Pirate ships are often characterized as having early forms of constitutional government, and in no small part this was simply due to knowledge and experience of mutiny, including ones that led to the pirates taking control of the ship in the first place. The confines of a ship are prone to make a captain aware of their precarious status, and it’s plausible that any competent captain would know it. In a tiny isolated colony things were much the same. Arthur Phillip would know that the marines on Garden Island would step in were the convicts to revolt (even if they refused to do any supervising), but getting to that point would be a failure, especially when you had a background in managing masses of discomforted, confined and sexually frustrated men. There wasn’t any way a more arbitrary or foolish use of power would long survive [fn2].
[fn1] To settlers at least
[fn2] Nor could the unfortunate Bligh