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Non-state armed actors are often studied for their criminal and political violence, yet they can also be important agents of political order. Under what conditions do armed groups seek to govern local communities? I argue that armed groups will do so when they face competition for recruits from other armed groups. Governance and welfare provision expand armed actors’ territorial control, authority, and popular support, helping them to attract more recruits than their competitors. Providing social services also offers employment opportunities to potential recruits. The paper evaluates the argument with a structured comparison of two armed groups in Nigeria: Boko Haram and the O’odua People’s Congress. From 2003 until 2009, Boko Haram was a key welfare provider and morality police, demanding adherence to sharia law and the establishment of sharia courts. In contrast, the O’odua People’s Congress was formed in 1994 but only began governing local communities in 1999 by providing vigilante patrols and dispensing justice by arbitrating disputes that arose within the communities it controlled. Fine-grained qualitative evidence gathered during field research, including in-depth interviews, newspaper accounts, and NGO reports, as well as an original survey of the O’odua People’s Congress, allows for a careful evaluation of the argument. The findings make three contributions. First, they add to a growing literature on non-state welfare by exploring temporal and spatial variation in governance by armed groups. Second, they advance debates on the emergence and decay of local political orders. Third, the analysis carries important implications for state-building, democracy, and state legitimacy. Welfare provision is an essential component of state capacity and a key mechanism for enhancing the legitimacy of the state in the eyes of its citizens. The phenomenon of armed group governance can thus pose a challenge to state-building and strengthening political legitimacy in fragile democracies.