If you made a fairly lightweight arm using two suitable resolution optical encoders, there would be no stiffness at all - the encoder bearings would act as the joints.
If it were very large, it may need triangulation with a support bearing directly above the shoulder joint.
Or you could use a bearing for a joint plus a parallel arm or timing belt link so the elbow encoder was not at the joint, to reduce the moving weight even more.
How accurate do you need it to be, positionally, and over what size or area range?
What's possible or practical very much depends on the accuracy required and how much you are willing to pay for the parts.
eg. With encoders such as these, programmed for the maximum line count:
You could get resolution around 25uM with a 1m (total length) arm.