The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It (Hardcover)

by Paul Collier (Author)

Some Amazon.com Reviews:

Realism about Global Poverty, October 17, 2007 By Robert B. Reese

Paul Collier. The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done about It. New York: Oxford University Press, 2007.

Paul Collier is Professor of Economics and Director of the Centre for the Study of African Economics at Oxford University. Previously, he worked for the World Bank and the British government’s Commission on Africa. As an expert on Africa and economics, he has analyzed the current global economic situation and discovered that 58 states, mostly in Africa, can be classified as failing or failed. The citizens of these nations constitute the “bottom billion,” who have been left out of global prosperity. He calls this “a world with a vast running sore–a billion people stuck in desperate conditions alongside unprecedented prosperity” (p. 175). He is determined to find practical ways to help these people out of their dilemma.

Contrary to Jeffrey Sachs, who approaches global poverty as a problem to be solved through increased western aid, Collier says that aid is not a solution by itself and it can even make the problem worse. Contrary to William Easterly, who emphasizes the need for local solutions to poverty, Collier still believes in collective action by the G-8 nations on behalf of the bottom billion. Collier strikes the middle ground between these two other experts, calling for hardnosed decisions about solving the problems unique to the bottom billion. He has little time for the efforts of celebrities and some charitable organizations who approach poverty with “a headless heart” (p. 4). He prefers hard data and analysis.

Collier is a number cruncher, and appears to have investigated issues of the bottom billion from every angle. While other economists may clutter their work with data and jargon, Collier keeps all the technical matters out of sight in order to deliver the bottom line of his research; this makes the book more readable.

Whereas the other five billion humans have begun to benefit from the effects of globalization, Collier says that that train has already left the station where the bottom billion could have boarded it. And it will be a long time before the train comes around to them again because China and India have taken all the available seats. In fact, he calculates that the bottom billion will be stuck in their present sad state on average for the next 59 years!

Why is Collier so gloomy about their prospects? He describes four traps through a civil war), natural resource trap (29% rely on exports of some resource like oil or minerals), being landlocked (30% have restricted access to ports and are surrounded by bad neighbors), and bad governance (76% are badly governed and make bad decisions about the economy). These traps are often interrelated, as the abundance of a natural resource may lead to conflict.

The ironic curse of having an abundant resource is that it brings in sizeable revenues that detract from making necessary reforms or from diversifying into other export products. And aid can be just like a resource trap, creating not only sudden extra money, but allowing a system of patronage to develop instead of accomplishing public good. Collier cites studies that estimate that aid ceases to be effective when it reaches 16% of Gross Domestic Product, which is close to the average current level of aid to African nations already.

Collier is not so gloomy as to say that nothing can be done about the bottom billion. He describes four instruments that can help if used wisely: aid, security, laws and charters, and trade. He does not think that globalization will automatically correct anything for the bottom billion, but only wise intervention from other nations to help the reform-minded citizens of the failing states. For example, he believes that extended foreign military intervention can best be used in postconflict situations to provide stability and prevent available resources going back into military expenses at a time when opportunity exists for reforms in crucial areas. International laws and charters can describe and enforce universal norms expected for aid and trade. And in trade, the bottom billion need protection from the giants of Asia to break into manufacturing and services in order to move out of the resource trap.

Overall, The Bottom Billion is one of the more realistic books that seeks to improve life and conditions for the poorest people on the planet. This makes the book sobering to read but gives it a feel of solid research into the causes and remedies of their situation. On the other hand, Collier’s recommendations still seem to suffer from wishful thinking, assuming that the international community may actually work in harmony to tackle this thorny problem. His analysis seems realistic but his remedies seem utopian. There is scant evidence, for example, that nations have learned how to use military intervention constructively to solve actual problems of the bottom billion. Collier cites only one instance, the British intervention in Sierra Leone, as being on target to help that nation get back on its feet. Other interventions, however, have mostly made the problems much worse, as in Iraq.

*****

One of the most important books I have read

Paul Collier has created a true masterpiece in the Bottom Billion. This book plays a critical role as the bridge between the ‘headless heart’ that Jeffrey Sachs sometimes seems to be and the pessimism of Easterly. Collier espouses real solutions to real problems, which he outlines with fluidity and emotion. He clearly has an immense heart, and yet fills his book with hard facts and difficult, yet viable solutions. One of the most critical books of the year dealing with development, if not the decade.

*****

Escaping the Poverty Trap, August 26, 2007 By Izaak VanGaalen

Of the 6 billion people that inhabit the earth, it has been estimated that about 1 billion live in wealthy countries, 4 billion live in developing countries, and about 1 billion live in countries whose economies are either stagnant or declining. About 70 percent of those in the last category are in Africa. Now comes Paul Collier, director of the Center for the Study of African Economies at Oxford University, adding his name to the list of those who have attempted to formulate a strategy for lifting the bottom billion out of poverty. (Others include Jeffrey Sachs in The End of Poverty: Economic Possibilities for Our Time and William Easterly in The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good.)

Sachs is an optimist who believes that aid, correctly applied, can solve Africa’s poverty. Easterly, on the other hand, is a pessimist, but concedes that aid, applied in a piecemeal fashion to see what works, can work. Collier is more of Easterly’s persuasion, but differs in that he, Collier, is more interventionist.

According to Collier, the bottom billion live in “trapped countries,” that have no visible means of improving their lot. He identifies 4 elements that cause countries to become trapped:

1)Civil war. Three-quarters of the bottom billion have been through or are currently experiencing civil war. Civil wars usually occur where there are large numbers of unemployed and uneducated young men, and where there are ethnic imbalances.

2)Natural resource curse. Countries with large amounts of natural resources tend not to develop the skill sets of their people, and they tend not to hold democratic elections. Corrupt governments and impoverished and violent masses are usually the result.

3)Landlocked countries. This is odd because many of the countries in Africa are coastel or on major waterways. Granted, being in a landlocked country is economically disadvantageous.

4)Bad governance. Bad governance is the hallmark of trapped countries often caused by elements 1 and 2.

Collier points out that aid is not a good idea since it works like the resource curse. It supports kleptocrats without making them accountable to their people. Indeed aid can retard economic development.

Furthermore, it has been established that most poor countries that have emerged from poverty have done so through labor-intensive export industries. The problem for Africa is that China and others are currently doing this making it very competitive. Collier thinks that best way for rich countries to foster growth in Africa is to eliminate or reduce tariffs on their exports. This prescription would probably fall on deaf ears in rich countries who are forever trying to protect their own industries.

More controversially, Collier argues that foreign military intervention would be helpful in stabilizing countries wracked by civil war. Currently, that would be a non-starter given the events in Iraq. There is, however evidence to support his claim: i.e. Sierra Leone.

The best advice that Collier gives is requiring trapped countries to comply with international laws and regulations in exchange for aid. Call it imperialism if you will, but the practice of the European Union of requiring recipients of aid to sign charters for better governance is really the best way to alleviate poverty. The European way of soft power is so far the most effective way to make development aid work.

*****

Objectivity + Readability = Must Read, August 8, 2007 By George Haines (New York) – See all my reviews (REAL NAME)

The previous reviews have done a solid job explaining the concepts. I will agree that the lack of citations is annoying, but with some unnecessary effort, you can find the citations you want from his website.

This book is not only fascinating and thought-provoking, but very easy to read. Collier distills concepts that are broad, deep and complicated like few writers I have come across. He is probably an excellent teacher because he can translate his knowledge into language I can understand.

The big reason to buy this book is that he does a great job explaining exactly why being resource-rich is a curse. Others have alluded to this phenomenon, but Collier is the first to really impact my understanding of the issue. He also explains why electoral democracies with poor checks and balances are actually worse at dealing with this curse than autocracies.

The good news is that full-fledged liberal democracies with strong checks on executive spending are able to out-compete them both.

This book is refreshing because he is not a polemic loud-mouth like so many writers on politics, aid and development. He is very conscious of over-reach and he is very measured in his praise and condemnation. He seems like a reasonable guy with a ton of experience and some very good ideas about helping make the world a better place.

The book is only 188 pages, just buy it already. You won’t regret it.

http://tinyurl.com/3b4rem