Statelessness and transnational networks: The case of Hawala in Somali society

This paper analyses conditions which make Hawala work as money and information transfer system. This system of money transfer is so unusual due to some reasons. One of the reasons is lack of banking services in Somalia. Another reason which makes this system so unique is how it operates in stateless society especially within Somali Society. The study also shows how different actors play in the successful operation of Hawala system. These actors include inter-clan relations, embedded and capitalised trust among the Somali society, customary law and transaction costs associated with Hawala. To answer the researcher's main question and sub-question, this study has used qualitative secondary data analysis in different languages. The study has also used primary data, collected through fieldwork conducted in The Netherlands and in Somalia. The study has used three main conceptual frameworks i.e. governmentality, embeddedness and informal institutions to assess what makes Hawala work within Somali society. The study has found out other forms of governmentality that exists within Somali social structures that contributes to successful operation of Hawala. The study also suggests existence of non-Westphalian state and informal institutions which can successfully operate for decades.