books development economics globalisation poverty

The Bottom Billion, by Paul Collier

the bottom billion Political correctness requires that we separate the world into two categories when talking about development – the developed and the developing nations, with one billion people living in the first set, and the other five making up the rest. These categories are insufficient, says Paul Collier, because there are some countries that are not developing, but actually moving backwards. Lumping them in with developing countries is to miss the much more serious problems facing them. The world’s billions should be divided 1-4-1, with a billion who have reached prosperity, four billion dispersed across a range of countries, some richer, some poorer, but all moving in the right direction. Then there’s the bottom billion, a “ghetto of misery and discontent”, who are getting poorer every year. “Picture this,” he writes, “as a billion people stuck in a train that is slowly rolling backwards downhill.”

That’s the first lesson of Paul Collier’s ‘The Bottom Billion: why the poorest countries are failing and what can be done about it.’ It’s an important one. The popular wisdom is that the globalization tide will lift all boats, but that assumes all boats are in the water. The fact is that many nations, most of them in Africa, have for various reasons been marginalized. While many countries have come a long way over the last couple of decades, incomes in the bottom billion actually shrank by 5% in the 1990s.

The important question is why these countries have fallen by the wayside, and what can be done about it. It’s something I’ve been researching myself for some time.  Voices on the right blame it on corruption and bad economic policy. Those on the left paint a picture of greedy rich countries holding the poor in their poverty. Those wishing to avoid the politics say climate is the defining factor, or disease, particularly malaria. As I have attempted to explain in previous posts, there is no single reason why some countries remain poor, and many of our assumptions are politically biased and very unhelpful.

Into this mess steps Paul Collier, with a short and clear set of ‘poverty traps’ that need to be broken, and a collection of possible solutions. These traps are conflict, natural resources, poor governance, and the curse of being landlocked. (These are worth some further exploration, but I’ve put that in a separate post.) The book weighs up each of these, determining the costs and effects on growth, drawing on the author’s own research as an economist. This is done through cost benefit analysis, which is useful in getting some unbiased figures on development, but not entirely without controversy. Can you really calculate the probability of civil war, or the true cost of war for that matter? Still, this is original research, and so brings something unique and very useful to the debate.

I’ve got a feeling The Bottom Billion will turn out to be a significant book, for a number of reasons. Firstly, Collier may have coined a phrase to describe the poor. We’ve needed one, since ‘third world’, ‘global south’ and ‘LEDCs’ are a little lacking. The name alone may be Collier’s biggest contribution, marking the importance of a 1-4-1 billion split rather than the 1-5. If that leads to a re-focus of development effort towards the poorest then that contribution may be quite profound. UN General Secretary Ban-Ki Moon used the term ‘the bottom billion’ earlier this year to call for exactly that.

Secondly, by skipping the politics and dealing with the numbers, Collier’s solutions are refreshingly low on ideology. As such, they’re much more likely to be adopted into policy. If conflict is a problem, aid for rebuilding after war becomes a priority. If abundant natural resources are actually holding back poor economies, then an international charter for best practice is needed. Landlocked countries are doing worse than those with coastline, so let’s make sure landlocked countries get the help they need. This is practical, useful stuff that shouldn’t be prey to the left/right, aid/trade polarizations.

Hopefully, The Bottom Billion should serve as a rallying point, an opportunity for concerted action. Time will tell. For now, pick up a copy of this excellent book on development.


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