A small state that devolves much power to the regions would enable Libya to exploit the potential of trade with its neighbours - and mark a clear change from Qaddafi's Green Book philosophy
Two years on, Libya is barely a state - but that's good news
This hardly seems like the moment to ask what type of state will emerge in Libya. Two years on from the uprising that eventually toppled Muammar Qaddafi, the country hardly has a functioning state at all.
There is still no constitution and there may not be one for months. The parliament, elected less than a year ago, has decided not to write one itself but instead to hold elections for a separate body to write it.
In the outside world, especially in the West, the chief concern has been about whether Libya's persistent violence could affect Western interests - analysts nervously think of the recent attack on a natural gas facility in Algeria - or perhaps be exported abroad.
There is still sporadic violence, and there are lots of guns in the country. Few weapons have been turned in to the authorities, and weapons are used at some protests.
That violence is a real threat to stability, as persistent political violence always is. It was incessant violence that undermined Iraq's chance of developing real stability, and the assassination of a politician in Tunisia two weeks ago has rocked that country to its core.
But the situation in Libya is not as bad as it seems. On the contrary, elections have been held, not only at the national level last July but at a local level in Benghazi and other cities since. Cities outside of the capital, Tripoli, are being rebuilt and local government does appear to be functioning.
While there are sporadic protests, there is nothing on the scale of Egypt's regular, paralysing demonstrations and there does not appear to be the same level of animosity among rival factions.
Nor is the trend toward Islamism- the great winner from the Arab Spring uprisings - as apparent in Libya: in last year's parliamentary elections, the biggest Islamist party, Justice and Construction, took just 17 of the 80 seats.
Gradually, then, Libya is moving to create the institutions of government it so blatantly lacked during the 42 years of Qaddafi's rule.
Related to this is a wider question of political philosophy: what kind of state will emerge from the fractious politics of today's Libya?
The natural tendency for a new Libya, flush with oil money (production last year passed pre-revolution levels), will be to subsidise essential goods and fuels, as in Qaddafi's day.
That is already happening - fuel, rice, flour and sugar are all subsidised; in the case of fuel the subsidy reaches 25 per cent of the cost.
Under Qaddafi, the state was enormous, employing up to 70 per cent of all working Libyans. Part of the reason for creating such a large state was the colonel's quasi-socialist ideas, embodied in that tome of coherence, the Green Book.
As set out in that volume's Solution to the Economic Problem, the state would be a mixture of capitalist ideas (owning private property was good - but only up to the limit of one house), and socialist control (all food production was channelled through the government).
Running a state in that fashion was of course a way of making the whole country dependent on Tripoli, Qaddafi's power base.
Libya is now at a turning point, with the new government able to alter the way the state works and the public's expectations. Libya's troubled politics and the lack of national cohesion present an interesting opportunity.
There is a gap between Libya's east and west, between Tripoli and Benghazi. One approach would be to try to unite the two, creating a strong national identity and representative structures that allocate power among the various parts of the country. But federalism is currently feared, because it could lead to a break-up of the country. That is a real possibility, and a bad one.
But a looser national grouping is not necessarily a bad one, if it devolves more power to the regions and - crucially - provides some autonomy for those regions to act in stimulating their regional economies. This is the opportunity that Libya can embrace: building a cohesive state - but a minimal one. Weaning Libyans off the subsidies of the Qaddafi era is the first step in opening the country to the possibilities of its region.
Historically, North Africa has looked to Europe for expertise and investment: Morocco for example explicitly positioned itself as a cheap offshore environment for Spanish and French companies.
But with Europe economically weakened, there is an opportunity for Libya, with cash reserves and links to its southern neighbours across the Sahara, to create value in the economies of West Africa that are now not so much emerging as fledgling. There is enormous potential in countries such as Mali, Niger and Chad, and it doesn't need the Libyan government to tap that potential; individuals or regions can do so effectively.
But the regions would need incentive for that kind of trade linkage, and that can happen only if central control is loosened. This will be hard in the short-term - that's why subsidies matter for now - but will be far better in the long term.
On Twitter: @FaisalAlYafai