Book-Blogging: The Bottom Billion

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Are we – the Western world – getting development all wrong?

Depending on who you ask, you’ll probably hear some variant of “Yes, we need to do…” Nothing. More with [X country’s] government. Less with [X country’s] government. More on trade. More to be inclusive. And so on.

Paul Collier, a Professor of Economics at Oxford University, may finish that thought by saying “…more for the worst off, less for the rest.” In The Bottom Billion, he lays out his cogent argument in an engaging writing style and, for an academic, writes quite bluntly about current aid, trade, and military policy. It’s a short, quick read, arguing for a solution that is center-Sachs on the Sachs-Easterly Spectrum: some aid and the occasional military intervention, depending on the situation.

Collier’s thesis is that most of what we call the “developing world” is basically OK, but the eponymous “bottom billion” in 60 or so countries (mainly concentrated in sub-Saharan Africa) has been economically stagnated by one or more of four “traps.” He believes that a combination of interventions – each tailored to a specific trap – could hold the promise of helping the bottom billion catch up with the rest of us. He holds that if they do not escape these traps now, the gap will only widen in the coming decades, leading to a much starker difference in living standards than today.

The first trap – and certainly the most visceral for Western eyes – is the Conflict Trap: countries are consistently torn apart by civil war or military coups, and can’t get a foot on the economic ladder. His research indicates that a small economy with a stagnant growth rate and a heavily reliance on a primary commodity export (e.g., oil, diamonds, rare earth minerals) puts a country at a particularly high risk.

Next is the Natural Resource Trap – the oft-mentioned “resource trap” whereby a weak-enough government can’t deal with the influx of oil or diamond revenues. This explains why Nigeria had issues when it found oil but Norway didn’t; Norway already had strong institutions and a respected government. He also brings up Dutch Disease: as Nigeria exports oil, the currency strengthens, and other exports (e.g., agriculture, textiles) become more expensive to export.

The fourth is Bad Governance in a Small Country, which is pretty self-explanatory. The most unexpected trap is the third, though – Landlocked with Bad Neighbors; it’s intuitive but doesn’t initially jump out. Basically, resource-scarce countries with no access to a sovereign port are reliant on their neighbors for port access – think Uganda and its reliance on Kenya’s port in Mombasa. Uganda needs Kenya to have good roads and favorable trade policy, but Kenya doesn’t really need Uganda, so it may not invest in the road from Malaba/Busia to Nairobi. Collier makes it simple: these countries will need aid and assistance for a long time. It’s encouraging to see this “unsustainable” solution acknowledged openly.

Collier presents four ways to help: aid, military interventions, international standards/charters, and trade, of which I’ll focus on the first two, as the last two are pretty straightforward – a help create standards/charters, provide more favorable trade conditions to sub-Saharan Africa, largely by making it cheaper for textiles so that they are competitive with the post-agglomeration Asian countries.

He’s particularly vehement about military intervention, arguing that it’s the lesser of two evils, cheaper in the long run, and a way to keep violence-prone countries on the right path. He argues that past failures of the international community – whether active failures, as in America’s premature pull-out in Somalia, or inactive failures, as in Rwanda and Darfur – have led to unnecessary suffering, which seems right to me. Perhaps the most useful deployment of troops would be in Collier’s suggestion of a credible threat to intervene externally in the event of a coup. I also like the idea of an agreement whereby a post-conflict government agrees to drastically de-militarize if the UN brings in external forces for a number of years; on the ground, this may be very difficult to negotiate, approve, and countenance, though.

On aid, Collier argues that current distribution patterns can lead to a lot of harm. Rather than pour in significant aid dollars immediately post-conflict, he advocates beginning with an immediate injection of technical expertise, holding off on the dollars until things have calmed down. Once that happens, it may be necessary to set up an “independent service authority” of the new government, multilateral organizations (e.g., World Bank, International Monetary Fund), and NGOs, to ensure that the aid dollars go where they are supposed to. This seems like a smart, short-term solution that would be pretty unpalatable to the newly-empowered government; more on this in a future post, perhaps.

If you look at the final sentences of the last two paragraphs, you can start to sketch out a critique of The Bottom Billion: the remedies seem, at first glance, pretty unreasonable, unpalatable, and unlikely to be implemented. They sound promising on paper but it’s not clear that they could work on the ground; the coordination and planning between all interested parties seems unlikely, to say the least.

(Collier briefly mentions an example of donor agency “coordination” on the construction of a hospital: it took two years to come up with the solution of “each builds a floor according to their own rules” – I’m sure that worked out great)

Paul Collier’s The Bottom Billion is a short, engaging, readable call for a reallocation of attention, neurons, and money away from all of the poor and to the absolute poorest – those least likely to succeed. Read it.

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