Zones of state failure are assumed to be anarchic. In reality, communities facing the absence of an effective state authority forge systems of governance to provide modest levels of security and rule of law. Nowhere is this phenomenon more evident than in Somalia, where an array of local and regional governance arrangements have emerged since the 1991 collapse of the state. The Somalia case can be used both to document the rise of governance without government in a zone of state collapse and to assess the changing interests of local actors seeking to survive and prosper in a context of state failure. The interests of key actors can and do shift over time as they accrue resources and investments; the shift “from warlord to landlord” gives some actors greater interests in governance and security, but not necessarily in state revival; risk aversion infuses decisionmaking in areas of state failure; and state-building initiatives generally fail to account for the existence of local governance arrangements. The possibilities and problems of the “mediated state model,” in which weak states negotiate political access through existing local authorities, are considerable.