EACH OF THE 43 VILLAGES IN LOANI IS A CORPORATE UNIT THAT VALUES ITS LEGAL AND POLITICAL AUTONOMY. USE OF STATE LEGAL AGENCIES BY LOCAL VILLAGES OR COURTS AFFIRMS THE LEGITIMACY OF THE STATE SYSTEM AND CHALLENGES THE AUTHORITY OF LOCAL INSTITUTIONS. CONVERSELY, THE ABILITY OF LOCAL COURTS TO SEAL OFF DISPUTES WITHIN THE VILLAGE LEGAL STRUCTURE IS A TEST OF LOCAL JUDICIAL AUTHORITY AND EFFICACY AS WELL AS A GAUGE OF LOCAL AUTONOMY. THE COMMUNITY SYSTEM CONSISTS OF FORMAL AND INFORMAL MEANS OF SETTLING DISPUTES. THE STATE SYSTEM, THROUGH THE STRUCTURE OF APPEALS, TIES THE FORMAL VILLAGE COURT INTO THE STATE COURTS AND JUDICIAL AGENCIES. DISPUTES INVOLVED IN BOTH SYSTEMS SIMULTANEOUSLY EXPOSE A COMPETITIVE DYNAMIC BETWEEN THE STATE MECHANISMS OF COERCIVE CONTROL AND VILLAGE MECHANISMS OF NORMATIVE CONTROL. AN EXAMINATION OF TWO CASES CAUGHT UP IN THIS PROCESS SHOWS THAT THE EFFECTS OF COMPETITION BETWEEN THE STATE AND VILLAGES IN LOANI ARE CONTRADICTORY. PARTICIPATION IN THE FORMAL STRUCTURE OF APPEALS TENDS TO STRENGTHEN VILLAGE COURTS AS THEY DEVELOP AND TESTS STRATEGIES TO ASSERT THEIR AUTHORITY AND PROTECT LOCAL AUTONOMY. EXTENSION OF VILLAGE TRANSACTIONAL NETWORKS TO THE DISTRICT SEAT, ON THE OTHER HAND, GIVES STATE INSTITUTIONS AN OPERATIONAL FOOTHOLD IN VILLAGE LIFE AND CHALLENGES THE BALANCE OF POWER WITHIN LOCAL COMMUNITIES. THE COMPETITIVE STRUGGLE FOR POWER AND INFLUENCE IS THUS INTENSIFIED AND BARRIERS TO COOPERATION ARE INCREASED. SOCIAL CONTROL BY BOTH CATEGORIES OF INSTITUTIONS IS THEREBY REDUCED. NOTES ARE PROVIDED. (RCB)