Order without the state: what stateless and non-state orders can and cannot provide

Can people keep order, enforce agreements and provide public goods without a state? The question is usually argued from first principles, but there is a body of historical and contemporary evidence that can be examined directly. This study reviews five bodies of evidence: Somalia after the collapse of its central government in 1991, the medieval Icelandic Commonwealth, the debate over a medieval "law merchant", the upland societies of mainland Southeast Asia that James C. Scott called Zomia, and the field research on self-governing commons associated with Elinor Ostrom. We find that non-state orders are real, more common and more capable than the textbook picture of anarchy suggests. They can enforce contracts within communities, regulate shared resources and settle disputes among neighbours. Their limits are just as consistent: they protect insiders better than outsiders, they are vulnerable to concentrated power and to armed groups, and they struggle to provide public goods that require large scale, sustained finance or protection of weak parties against strong ones. Several celebrated cases, including the law merchant and the Maghribi traders, also look more state-dependent on close inspection than their early interpreters claimed.

Key findings

• Statelessness in Somalia after 1991 did not mean the absence of order. Customary law (xeer), clan elders, religious courts and businesses kept trade, money and telecommunications working. Some economists found Somalia better off on nearly all of 18 development indicators than under the predatory Barre regime; critics reply that this compares statelessness with a very bad state, not with a functioning one.
• The Icelandic Commonwealth (c. 930–1262/64) maintained courts, a legislature and law without an executive for about three centuries. A reform around 965 set the number of chieftaincies at 39. The system ended in civil conflict after power concentrated in a few families.
• The idea of a uniform, merchant-made law merchant that operated independently of states is now strongly contested by legal historians. Medieval merchants used reputation, private judges and state courts together.
• The Maghribi traders, once the standard example of private reputation-based enforcement, used formal courts too, according to a 2012 reappraisal.
• Scott's Zomia, an upland region about the size of Europe across seven Asian countries, shows that some populations deliberately kept states at a distance. Historians and anthropologists accept parts of the argument but dispute its scope and its treatment of upland polities as stateless.
• Ostrom's design principles for self-governing commons have strong empirical support: a review of 91 studies found every principle supported at least twice as often as not.
• Across the cases, non-state orders work best for repeated dealings within bounded communities and least well for protecting strangers, minorities and people with no group behind them.

Research question and scope

We ask what non-state and stateless orders can provide, what they cannot, and under what conditions they hold together. By "non-state order" we mean rules that are made and enforced mainly by actors other than a territorial government with a claim to a monopoly of legitimate force: kin groups, elders, chieftains, religious authorities, merchants' associations, firms and user groups.

We do not try to settle the normative debate between anarchists, libertarians and defenders of the state. We look at the evidence those debates rely on. We cover:

1. Somalia, as the main modern case of a country without an effective central government for an extended period.
2. The Icelandic Commonwealth, the main historical case cited for private law enforcement.
3. The law merchant and merchant coalitions, the main cases cited for private commercial law.
4. Zomia, the main case cited for societies that evade states.
5. Self-governing commons, the main case for local collective action without central direction.

We leave out stateless societies known only through classic ethnography (such as the Nuer), modern gated communities and private cities, which the atlas treats under charter cities and special jurisdictions, and online governance systems.

Background

The intuition that order requires a state goes back at least to Thomas Hobbes, who described life without a common power as a war of all against all. Twentieth-century economics added a more precise argument: public goods, such as defence and law enforcement, will be underprovided by voluntary means because people can free-ride on the contributions of others.

Two strands of research have challenged this. Libertarian and anarchist economists, including David Friedman, Bruce Benson and Peter Leeson, argued that private actors can and historically did supply law and enforcement. Political scientists and economists in the Bloomington tradition, led by Elinor and Vincent Ostrom, showed that communities often manage shared resources without either privatisation or state control. Anthropologists and historians, including James C. Scott, have argued that many people in history lived outside states, sometimes by choice.

The legal scholar Robert Ellickson's study of cattle ranchers in Shasta County, California, published as Order without Law in 1991, gave the field a memorable phrase. Ellickson found that neighbours settled disputes over straying cattle through local norms of neighbourliness, largely ignoring the formal law that would have applied. His ranchers lived inside a state, but they show how much order can rest on informal norms even where formal law is available.

Method and sources

This study synthesises published research. For each case we identify the strongest claims made for non-state order, the main critiques, and the facts that both sides accept. We draw on peer-reviewed articles and scholarly books, with primary sources where they are accessible. Where figures come from one study only, we say so. We treat the five cases as illustrations of mechanisms, not as a representative sample of stateless societies: they were chosen because they are the cases that the debate itself relies on.

Two cautions apply throughout. First, "stateless" is a matter of degree. Somalia had regional administrations, and medieval merchants lived among kings and cities. Second, much of the evidence is reconstructed from incomplete records, such as sagas, court registers or estimates of output where national accounts did not exist.

Finding 1: Somalia after 1991 kept a functioning economy, but not a protective order

What happened

Somalia's central government collapsed in January 1991 when Siad Barre's regime fell. In the north-west, Somaliland declared independence in May 1991 and built its own institutions. The rest of the country went through civil war, famine, international intervention and a succession of transitional governments, including the Transitional Federal Government created in 2004, before the Federal Government of Somalia was formed in 2012.

Yet in the absence of a national state, much of daily life was organised by other institutions. Clans and their elders applied customary law (xeer), which sets compensation for injuries and killings and is enforced through the collective liability of kin groups. Islamic courts provided dispute resolution in some areas. Businesses provided electricity, water, money transfer and mobile telephony. Anthropologist Peter Little's study Somalia: Economy without State (2003) documented how cross-border livestock trade continued and adapted. Michael van Notten, a lawyer who lived among Somalis, described xeer as a system of polycentric customary law in The Law of the Somalis (2005). Economist William Luther (2015) analysed how old Somali shilling notes continued to circulate as a currency without a functioning central bank.

The "better off stateless" argument

Peter Leeson's 2007 article "Better off stateless" argued that the Barre government had been so predatory that its removal left Somalis better off. Comparing the last five years of government (1985–1990) with 2000–2005 on the 18 development indicators that allow such a comparison, he found that 14 showed clear improvement and only two a clear decline, so that on nearly all of them Somalis were better off under anarchy than under government, while stressing that development remained very low. Powell, Ford and Nowrasteh (2008), comparing Somalia with other African countries before and after 1991, found that its relative economic performance improved during the stateless period. A later study by Bonneau, Hall and Zhou (2022), using satellite night-light data and a synthetic-control comparison, found that the creation of the Transitional Federal Government in 2004 coincided with economic stagnation relative to the preceding stateless years. They interpreted this as a sign that an externally imposed government clashed with the informal institutions that had supported growth.

The critiques

The counter-arguments are substantial:

• The comparison is with a bad state. Even taken at face value, the evidence shows that statelessness can beat a predatory, war-making government. It does not show that it beats a functioning one. Leeson's own framing is careful on this point; its popular reception has often not been.
• Statelessness was not uniform. Hagmann and Hoehne (2009) argue that the "failed state" debate ignored the variety of political orders that emerged in Somali territories after 1991, including Somaliland, Puntland and the Somali region of Ethiopia. Some of the best-performing areas were the ones that built state-like institutions.
• Order was segmented. Ken Menkhaus (2006/07) described "governance without government": communities formed systems of governance that provided modest levels of security and rule of law. But the protection offered by clan-based law depends on belonging to a strong clan. Minorities, displaced people and members of weak lineages had less protection.
• Data are thin. Indicators for Somalia in the 1990s and 2000s were often estimates by international agencies with limited access. Night-light data improve coverage but measure activity, not welfare.

What Somalia shows

Somalia shows that markets, money and contract enforcement within and between clans can survive the collapse of a state, and that a bad state can be worse than none. It does not show that non-state order can supply security for everyone, protect people from armed groups or deliver public health and education at scale. Famines in 1992 and 2011 occurred in a context of war and weak authority, and those events belong in any honest account of the period.

Finding 2: the Icelandic Commonwealth combined public law with private enforcement

How it worked

Iceland was settled from about 870, and a general assembly, the Althing, was established at Þingvellir around 930. Political power lay with chieftains (goðar) who held chieftaincies (goðorð). Jesse Byock notes that the number of chieftaincies at the founding of the Althing is unclear, although scholars often assume 36, and that a major constitutional reform around 965 set the number at 39, while the actual number of chieftains at any time may have been higher. Free farmers could choose which chieftain to follow, and chieftaincies could be bought, shared or inherited.

There was law and there were courts: a law council (Lögrétta), a law speaker and courts at regional and national assemblies. What was missing was a public executive. Judgments had to be enforced by the injured party and their allies. A person who refused to pay a judgment could be outlawed, removing the law's protection. Byock describes the result as an unusual system of consensual, lateral decision-making and calls Iceland in many ways an acephalous society.

The Friedman thesis

David Friedman's 1979 article "Private creation and enforcement of law" presented the Commonwealth as a working example of a legal system in which law was public but enforcement was private and claims could be bought and sold. He argued that the system kept the peace for long periods at relatively low cost and noted that it broke down only after wealth and power had concentrated in a few families.

The critiques

Historians have challenged both the description and the lesson. Byock emphasises that the order was not individualistic but rested on networks of kin, friends and chieftains, and that arbitration and mediation by powerful men were central. Włodzimierz Gogłoza (2018) argues that anarchist readings of medieval Iceland project modern categories onto a society that had hierarchy, status inequality and coercive institutions of its own. The end of the Commonwealth is also a lesson: in the thirteenth century, conflict among a few great families escalated into civil war, and between 1262 and 1264 Icelanders accepted the authority of the Norwegian king.

What Iceland shows

Iceland shows that law and courts can exist without a central executive for a long time in a small, isolated, relatively homogeneous society with a shared legal culture. It also shows the classic failure mode of private enforcement: those who can mobilise the most force eventually turn enforcement into domination. The design question is not whether private enforcement can work, but how to stop enforcement capacity from concentrating.

Finding 3: the law merchant was less autonomous than its legend

The classic claim

In a widely cited 1990 article, Milgrom, North and Weingast modelled the medieval Champagne fairs as a community in which private judges kept records of merchants' conduct. They showed that such a system could induce merchants to behave honestly, to report violators and to pay judgments, even though each step was costly to the individual. Bruce Benson's 1989 article "The spontaneous evolution of commercial law" went further, arguing that a merchant-made lex mercatoria developed largely independently of states and was later absorbed by them.

The historians' response

Legal historians have pushed back. Emily Kadens (2015) argues that the idea of a uniform, customary, transnational law merchant is a construct that does not fit the medieval evidence. Commercial practices varied by place and trade, and merchants relied on local courts, town governments and princes as well as on their own customs. The point is not that private ordering was absent, but that it was interwoven with public authority.

A similar revision affected the Maghribi traders, eleventh-century Jewish merchants of the Mediterranean whom Avner Greif presented as a coalition that enforced agency contracts through collective ostracism rather than courts. Edwards and Ogilvie (2012) re-examined the evidence and found no empirical example showing that such an exclusive coalition actually existed. The traders used the formal legal system to enforce agreements and combined reputation-based sanctions with legal mechanisms, much as medieval European merchants did. Greif has disputed their reading.

What the merchants show

Reputation and private adjudication are powerful tools for repeated dealings among traders who know each other or can find out about each other. They are complements to public courts, not usually substitutes. Even the most market-friendly historical cases seem to have relied on some public authority to make judgments stick against those who were about to leave the community.

Finding 4: Zomia shows deliberate distance from states, but not an absence of politics

The argument

The term Zomia was coined by the historian Willem van Schendel in 2002 for a large upland region of Asia that had not fitted into the post-war division of area studies. James C. Scott's The Art of Not Being Governed (2009) used it for the uplands of mainland Southeast Asia and neighbouring areas, a mountainous region about the size of Europe spanning parts of seven Asian countries. Scott argued that many upland peoples were not "pre-state" remnants but populations who had fled or resisted lowland states over about two thousand years. Shifting cultivation, root crops, dispersed settlement, oral rather than written traditions and flexible ethnic identities made them hard to tax, conscript and count. In the terms of his earlier work, they kept themselves illegible.

The critiques

Specialists have accepted parts of the argument and questioned others. Victor Lieberman (2010) welcomed the emphasis on upland agency but questioned how far the model applies across such a large region and time span, and argued that it underplays upland polities and lowland influences. Sara Shneiderman (2010), writing on the Himalayas, found the term itself ill-suited to her region but the underlying emphasis on fluid identities and agency towards states useful. Scott himself limited his argument to the period before modern states acquired the technology, roads and administrative reach to absorb the uplands, which he dated to roughly the mid-twentieth century.

What Zomia shows

Zomia shows that exit from state control has been a large-scale, long-run strategy, not only an individual choice. It also shows its price: the people who escaped taxation and conscription often lived with lower material output and exposure to slave raiding and war. And upland societies had chiefs, kingdoms and hierarchies of their own. Zomia is better read as evidence for the costs of states and the value of exit than as a model of a stateless utopia.

Finding 5: self-governing commons work under specific conditions

Ostrom's evidence

Elinor Ostrom's Governing the Commons (1990) drew on cases ranging from Swiss alpine pastures and Japanese village forests to Spanish irrigation systems and Philippine zanjeras. She showed that communities often manage common-pool resources sustainably without either private property or central regulation, and she proposed eight design principles that long-enduring institutions shared: clear boundaries, rules matched to local conditions, collective-choice arrangements, monitoring, graduated sanctions, accessible conflict resolution, recognition of the right to organise and, for larger systems, nested enterprises.

Cox, Arnold and Villamayor Tomás (2010) reviewed 91 studies that assessed these principles. They found them well supported empirically, with every principle supported at least twice as often as it was contradicted, and concluded that the most serious criticisms were largely theoretical rather than empirical. They proposed refinements, splitting the boundary, congruence and monitoring principles into components.

What the commons literature shows

The commons research is the most robust evidence that collective action without central direction is possible. But it is careful about scope. The successful cases are bounded resources used by identifiable communities over long periods. Ostrom's seventh principle, minimal recognition of the right to organise, is a condition about the state: external governments do not challenge local institutions. Many cases are nested in, or at least tolerated by, wider political authorities. Self-governing commons are an argument for polycentric governance and subsidiarity, not for the abolition of the state.

Comparison of cases

What such orders can and cannot provide

What they can provide

• Contract enforcement among repeat players. Reputation, collective liability and private adjudication work well when people deal with each other repeatedly and information about conduct circulates.
• Dispute settlement among neighbours. Compensation-based systems such as xeer and Icelandic law, and the neighbourly norms in Ellickson's Shasta County, resolve many disputes at low cost.
• Local public goods. Irrigation systems, pastures, fisheries and forests can be managed sustainably by their users when boundaries are clear and monitoring is possible.
• Exit from predatory rulers. The Somali and Zomian cases show that the absence or distance of a state can be preferable to a state that preys on its population.

What they struggle to provide

• Protection for outsiders and the weak. Orders built on kinship, clan or membership protect members. People without a strong group behind them, including minorities, migrants, displaced people and, in many cases, women, are less protected.
• Restraint of concentrated force. In Iceland and Somalia, the absence of a central executive did not prevent the rise of powerful families, warlords or militias. Private enforcement capacity tends to concentrate.
• Large-scale public goods. Mass vaccination, national infrastructure, famine relief and defence against organised external threats require finance and coordination on a scale that voluntary local orders rarely achieve.
• Legal predictability for strangers. Commercial dealings with people outside the community, especially one-off transactions, rely heavily on public courts or on intermediaries backed by them.

What the evidence does not show

• It does not show that anarchy is generally better than the state. The positive Somali findings compare statelessness with a predatory dictatorship and rely on limited data.
• It does not show that states are necessary for all order. Every case reviewed here contains real, functioning non-state institutions, and the commons evidence is robust.
• It does not provide a random sample of stateless societies. The cases are those that advocates and critics have argued about. Societies that collapsed without leaving records are not represented.
• It does not settle the historical debates. The nature of the law merchant, the Maghribi coalition and Zomia remain contested among specialists. We report the state of the debate, not a verdict.
• It does not transfer easily to modern, mobile, anonymous societies. Most successful non-state orders operated in small or bounded communities with dense social ties.

Implications for institution design

1. Use non-state orders where repetition and information are strong. Community dispute resolution, user-managed commons and reputation systems are good tools for bounded, repeated interactions.
2. Pair them with a backstop. The historical record suggests that private and community enforcement works best when some public authority will act against those who are about to leave the community or who command superior force.
3. Watch for concentration. A design that relies on private enforcement should limit the accumulation of enforcement capacity, for example by rotating offices, capping the size of enforcement organisations or keeping exit open.
4. Protect those without a group. Any non-state order should be judged by how it treats people who lack strong kin, wealth or membership. Explicit rights of appeal to an external forum are one remedy.
5. Recognise and nest local institutions. Ostrom's principles suggest that wider authorities should recognise local self-governing arrangements and nest them within larger structures, rather than replace them.
6. Do not import foreign institutions over working local ones. The Somali experience, including the Bonneau, Hall and Zhou finding on the 2004 transitional government, warns that externally designed state-building can disrupt the informal institutions people actually rely on.

Open questions

• Can digital reputation systems and online arbitration reproduce the benefits of community enforcement among strangers, or do they reproduce its exclusions?
• How should a state recognise customary systems such as xeer without freezing them or entrenching the power of elders over women and minorities?
• What, in practice, prevents private enforcement capacity from concentrating, and are there historical cases where it did not?
• How far does the evidence from bounded commons scale to regional or global commons such as fisheries, the atmosphere or the internet?
• Did Somali economic performance after 2012 confirm or weaken the "better off stateless" thesis? The question needs better data than the earlier debate had.

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