Beyond blueprint failure: vernacular finance as hybrid governance in fragile states

Yousif Hassan Ahmed Balola

International Journal of Development Issues, 2026, 1-21

Abstract: PurposeThis study aims to examine the collapse of external financial institutions in fragile states and propose a framework for understanding community financial systems that endure.Design/methodology/approachUsing concept development methods, it synthesises hybrid governance theory, economic anthropology and critical development studies to construct “vernacular finance” – socially embedded systems enacting ethical principles through practice. Five propositions are advanced and illustrated through triangulated analysis of academic, grey and civil society sources on Sudan’s 2023 crisis.FindingsThe analysis suggests Rotating Savings and Credit Associations bundled with community governance structures can crystallise into visible hybrid sovereignty, not merely survival mechanisms. These bundles practise vernacular Islamic finance through risk sharing and mutual aid, contrasting with donor-dependent institutions optimised for external legibility. Propositions specify the conditions, mechanisms and boundaries of this process.Research limitations/implicationsAs a conceptual piece, this study advances testable propositions rather than empirical findings. Future ethnographic and comparative research is needed to validate the framework across diverse fragile settings.Practical implicationsThe framework suggests shifting from template-driven reconstruction towards diagnostic mapping of existing community financial governance. Politically attuned pathways include tiered regulatory recognition and community-governed grant modalities with safeguards.Social implicationsCentring vernacular finance challenges development hierarchies that privilege external expertise over community capacity, suggesting that sustainable peace may depend on the sovereignties communities construct when states withdraw.Originality/valueThis study introduces “vernacular finance” as a bridging concept between the critique of blueprint failure and positive engagement with community systems, offering a framework for identifying legitimate governance partners in fragile contexts.

Keywords: Hybrid governance; Vernacular finance; Institutional failure; Fragile states; Conceptual development; Sudan (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijdipp:ijdi-03-2026-0104

DOI: 10.1108/IJDI-03-2026-0104

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