The Coase theorem in Somalia

Whether Somalia’s home-grown al-Qaeda franchise, al-Shabaab, had a hand in the abduction is a moot point. While the group denies involvement, many believe it was a militia allied to al-Shabaab that launched the original kidnap operation, in return for providing it with a cut of any ransom money. That militia is then said to have sold Mrs Tebbutt on to a pirate group for $300,000 shortly after, knowing the pirates could negotiate a considerably higher ransom. Then again, al-Shabaab was never likely to claim responsibility; while British government policy does not forbid the payment of ransoms to criminal gangs such as pirates, it does forbid them to terrorist groups.

Here is more, interesting throughout, and for the pointer I thank Ashok Hariharan.


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