This discussion paper is intended to capture Somaliland’s journey to end violence, reach a durable political settlement through an elite-negotiated process, form a new legitimate and democratic government, and facilitate a free market economy. The paper presents Somaliland’s unique approach to peace and state-building- locally-driven, culturally-rooted, reconciliation-focused, and traditionally-engineered processes whereby all key stakeholders were engaged to reach a new political settlement agreed by dominant players. In this regard, the paper argues that the state formation of Somaliland was built on existing traditional informal institutions thus creating a neopatrimonialism political culture. The paper further explains that Somaliland’s success factors for its peace and state-building process are now its major constraints to inclusive economic growth and development. Clientelism and patronage have dominated the political culture forming a small elite circle whose interests threaten the very basic principles of free-market economy. In moving forward, the paper proposes; a) adoption of a democratic developmental state to facilitate state interventionist policies that are friendly to the market economy, b) to move from “big stuck” dilemma to systemic reforms, and c) to adopt a new political leadership that is not similar to one being used now “status quo leadership”.
