Oxford University Press Inc The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It

In Paul Collier’s book The Bottom Billion Collier, lays out a very easy to understand argument for why the poorest countries are poor. Collier states that there are a multiplicity of different variables that help explain why some countries are less developed and why other countries are not. Collier refers to many countries as falling into “four traps” of poverty. Collier then offers solutions on how to get out of these traps. Collier’s goal was to write a readable book for anyone that is interested in development and I think that he was s successful in doing that. Where he falls short is in his solutions. He wrote a book that largely follows the “Washington consensus” line of economic thinking and development. The Washington Consensus is what is known as Neoliberalism. Collier doesn’t necessarily advocate free trade but he is more precise in saying that it needs to be the right kind of trade. Ultimately his major point is that aid will not help the bottom billion. He champions aid but wants that aid to be focused on private capital as too encourage manufacturing growth. The major problems in his book lie in how he measures poverty and growth and the way he omits any concepts of sustainability. Collier starts out by stating his argument stating the differences between the developed countries and the under developed countries. The under developed countries are ravaged with disease, hunger, and war. These countries have coexisted with the developed countries. There are 5 billion people that are prospering or on the track to prosperity but there are still a billion people that are decreasing in prosperity or stagnant. Collier states that the countries that are underdeveloped are mainly in Sub-Saharan Africa and Central Asia and despite the “Golden Age” of prosperity between 1990 and 9/11, incomes among the bottom billion declined by 5 percent. Coiler states that poverty is not intrinsically a trap but rather something that is characteristic of all developing countries and that many countries pulled themselves out of poverty. Collier’s focus is on these countries that have fallen prey to what he refers to as the four developmental traps that keep countries in poverty. Some countries experience one trap at a time and some countries experience multiple traps at the same time. These developmental traps are the conflict trap, the natural resources trap, the trap of being landlocked with bad neighbors, and the trap of bad governance. The conflict trap is seen with countries that are worn torn and make up over 70 percent of the bottom billion countries. These countries have high poverty rates and due to these poverty rates there are many young men out of work that can be easily swayed to join armies. Slow growth, stagnation, and decline make a country more prone to civil war. Collier also states that because a country is going through economic hardship does not mean it will have a civil war. He does state the prospects of war can be perceived as unstable and investors and potential investor might flee which puts the country in worse economic position. Another propensity toward civil war is when a country is dependent primarily on commodity exports like oil, diamonds, or other natural resources. Sometimes these export commodities help fund rebel groups and give incentives for rebellions or civil wars. The natural resources trap is sometimes can lift countries out of poverty but Collier contents that it is a rarity. A surplus in natural resources often exacerbates poverty and can often add to a conflict trap. With a surplus of natural resources a country can afford to dismiss other economic problems in the country. Collier refers to these situations as the society being “rentiers” and he cites Saudi Arabia and Kuwait as the exception to the natural resources trap most likely because they have a large amount of natural resources. Most countries don’t get to be so lucky when it comes to a resource-rich country. Collier refers to the other countries in a state of resource-rich poverty. These countries have many problems with corruption due to the excess of revenue coming in from the natural resources. The democratic model is hard-pressed to survive and authoritarian regimes prove far more prosperous. The basic foundation for democracy to survive is not upheld. The erosion of the checks and balances to ensure fair electoral campaigns are subject to risk and failure. Ultimately the government becomes corrupt and an autocratic regime controls the polity of the country in favor of profits. The trap of being landlocked with bad neighbors is a geographical problem that is not the fault of the country but nevertheless can attribute to high levels of poverty in a country. Collier cites countries that are landlocked are not necessarily going to have the attributes of poverty or slow growth but he does state that 38 percent of the bottom billion countries are landlocked. Another issue that contributes to this trap is the neighbors or the surrounding countries. Cities that are landlocked have higher costs of transfer rates. This is due to the surrounding countries spending more on transport infrastructure. Collier also states that neighboring countries are not just accesses to markets they are the landlocked countries markets. To prove this Collier gives a contrast between Switzerland and Uganda. Switzerland’s neighbors are France, Italy, and Germany and Uganda’s neighbors are Sudan, Rwanda, and Somalia. Switzerland’s neighbors are democratic countries while Uganda’s neighbors are countries that have been marred with violence, civil war, genocide, and poverty. Collier concludes that the prosperity of one nation relies on the prosperity of their neighbors. The last trap Collier mentions is simply bad governance in a small country. Governance is a very important factor in regard to an effective economy. Collier states that the people in power are sometimes the supper-rich and they stand to gain from having an extremely poor country. There are many problems of people wanting reform but lack the ability and knowledge to properly affect change. This is where Collier starts using the term “failing states.” He mentions there is a criterion for what he considers a failed state that is a result of bad policies. Among what he considers failed states are Angola, the Central African Republic, Haiti, Liberia, Sudan, the Solomon Is- lands, Somalia, and Zimbabwe. Collier goes into the concepts of failing states and uses the term turnaround to explain reformers that can achieve a possible reformed state. Usually these turnarounds are rare because reformers are usually repressed, killed, or imprisoned very quickly. Collier’s findings for a turnaround are very slim and don’t show promise due to the swift repression. Collier now switches from what he perceives as the traps that countries can fall into to what can be done about it. Collier argues that globalization is the reason why some countries are rising out of poverty but leaving the bottom billion stagnant or slowly rising. He states that trade and aid will not be enough for these countries to escape the traps they are in. Collier does states that the aid that is going to the bottom billion countries is to public capital and not private capital. The public capital can supply many of these countries with infrastructure but it cannot offer equipment that workers would need in order to be productive that private investors can offer. Because there is the lack of private capital there is a lack of equipment for a effective labor force to be productive which leads to low wages. He cites capital flight and migration as major reasons for the bottom billion’s reasons for poverty as well. Collier offers many solutions for countries to get out of the traps they are in. He mainly states that these countries have to be rescued from within, meaning they must do it themselves. He states that no longer should people be injecting money into these countries and hope for a positive result. Collier states that foreign aid is not very helpful. The aid given does speed up growth and is helpful but in the long run will give, what Collier calls, diminishing returns. Collier states that aid in the conflict trap can worsen the situation and the aide can be a “payoff to power.” To help with the natural resource trap aid does nothing because the country already has money and is rendered impotent. For the landlocked trap aid would have to be consistent for a long period of time in a welfare state scenario to be useful. Involving aid and the trap of bad governance is where Collier finds aid somewhat useful. He states there are three different potentialities for possible turnarounds and they are incentive, skills, and reinforcement. Collier does not discount aide all together but he does emphasis that it alone will not solve the issues in the bottom billion countries. He suggests that there should be complementary actions alongside aid. Another recommendation Collier has for helping the bottom billion is military intervention. Collier states that military intervention has an important role in helping the bottom billion states. Military intervention can help restore order, maintain postconflict peace, and help prevent coups. In the case of restoring order Collier cites Kuwait and the need to maintain a collapsed state. The same thing was tried in Somalia and the military pulled out too soon and there were mass killings. Collier cites Sierra Leon as an example of a peacekeeping mission by the British military and he also cites Rwanda as an example of what happens when there is a failure to maintain peace through military intervention. As for preventing coups Collier expresses that with a strong external military presence coups could be eliminated. There are many issues with Collier’s book and the rest of the paper will be dedicated to the critiques of the book. The first critique of the book has to do with the mechanics of the book. He does not cite much of the information he uses and talks very broadly about people stating certain arguments and statements. Collier states he did this for readability but it would not make the book complex to cite some of the information he uses. A second critique of Collier is that he doesn’t mention education as an important aspect for getting the lower income countries out of poverty. He states that the educated people tend to immigrate out of the countries. Lester Brown diverges with Collier’s thinking and states that education is one of the key components of getting people out of poverty. Brown states that closing the gap between the rich and the poor is by educating everyone. Brown states that most people in poverty live in inherited poverty and that this cycle can be broken by having a mass scale of literacy programs that are partly funded by the lower developed countries themselves as well as aide from western countries. By Collier citing growth as a form of prosperity he is leaving out key components like sustainability. Ultimately Collier is not accounting for sustainability and he is focusing on short-term goals rather than the long-term goals for a sustainable environment. A third critique of Collier is his explanation of what traps are and how they can keep certain countries in poverty, but there are fundamental faults with how he measure growth and how he measures poverty. The way Collier measures growth and poverty is based on the measurement of Gross Domestic Product. GDP is used to measure economic growth and entire economic output. The general consensus with the measurement of GDP is that the more it grows the better a country is doing. Many contest using GDP as a measurement for growth because it leaves out many different variables that are not accounted for. So many countries could be considered prosperous but would be considered less developed. The argument against GDP is that to measure a sustainable economy and a sustainable society the measurements used need to account for more than just economic prosperity. A different type of measurement system referred to as the Human Development Index would include GDP as well as many other indicators including human well-being. Collier claims that countries cannot grow by being turned into Cuba. Collier claims Cuba is a low-income, stagnant country. The problem with this statement is that if you judge Cuba by GDP, then yes it is low-income, stagnant country. However if Cuba is rated on the Human Development Index they are ranked 44 and in comparison to the United States who’s ranked 5 then Cuba is relatively developed. Cuba is a fairly well developed country by the standards of the HDI and not GDP. The final critique of Collier is that he claims that the neoliberal policies have helped strengthen many of these countries. He refers the neoliberal policies as the “golden age.” Collier claims that the free trade is not the answer for helping these bottom countries but then he argues that lowering production subsidies in poor countries would push those countries to look for different avenues for agricultural needs. He is essentially say that the poor countries are too constrained by government subsidies so less money should be given to the countries as an incentive or to increase competition. The problem is with this theory is that he wants to do this in poverty stricken areas in a world with mass food shortage. Many factors contribute to the food shortage but the biggest contributor of food shortage is the mass amounts of grain that was previously used for export and now is used for ethanol production. Collier wants to effectively cut subsidies to these countries while at the same time curbing grain exports to these countries. Collier also calls for deregulation of the airlines for landlocked countries so they can have ultimately a freer system of trade. Collier’s book is a good example of a neoliberal framework that encourages that countries giving aid to under developed countries are participating is the acts of a “headless heart.” Really what Collier’s solutions are neoliberal solutions that oppose aid expansion in favor of increased military spending and intervention. Collier’s solutions are basis for even measuring the bottom billion’s growth and poverty is based off of GDP and he leaves no room for possible implications of sustainability on a global scale.

I work in some of the poorest countries of the world. This helped me understand the environment better

Developing countries are quite unlike Tolstoi's characterization of happy and unhappy families. Each happy country looks different from the other, and there are vast differences between China, India, Brazil, and other developing success stories, but there is a similarity between unhappy countries--countries that are not only failing to develop, but also going downward and falling apart. Together, these countries have a combined population of about one billion people, and what happen to this bottom billion has important consequences for the whole world.Paul Collier pioneered the burgeoning research on the economic causes of conflicts, and his work on civil wars has proved quite controversial among political science experts. Those experts tend to interpret civil wars in terms of heroic struggles motivated by grievances or ethnic strifes reflecting deeply-rooted hatreds. The author's research shows that rebel groups are usually doing well out of war, and that greed often trumps grievance as the underlying cause of conflict. He proves this by statistical analysis, showing for instance that there is basically no relationship between political repression and the risk of civil war, or between ethnic fragmentation and conflict (although ethnic polarization does play a part).Conflict is not the only trap. The author also goes through the natural resource trap, the trap of being landlocked with bad neighbors, and the trap of bad governance in a small country. Those traps often reinforce each other, and their combined effects condemn the bottom countries to the slow lane. In each case, Paul Collier not only successfully reviews the existing literature, but also offers original insights drawn from his own research. For instance, he demonstrates that far from being immune from the resource curse, democracies may create additional risks by inducing a phenomenon of "survival of the fattest". He is, to my knowledge, the first expert to point out that diversification of resource providers away from the Middle East in the name of energy security may actually increase the risk of disruption on world markets by creating new zones of instability: "Shifting our source of supply simply will not work as a security measure if the resource curse shifts with it."This research has direct policy relevance. By putting a price tag on the cost of a typical civil war (about 64 billion) or the gain of a sustained turnaround placing a formerly failed state on a secure path (about 100 billion), the author allows decision-makers to base their decisions on cost-benefit analysis. He shows that some interventions have a very large pay-off: the British Operation Palliser in Sierra Leone was a huge success, worth perhaps thirty times its cost. The protection offered by the French against military coups in Africa, now tempered by a hesitation to intervene, was perhaps also worthwhile. The European Union's new rapid reaction force may play a similar role in the future by offering a guarantee to democratic governments conditional upon internationally certified free and fair elections. "Making coups history" is certainly more controversial than the global rally against poverty, but may in the end contribute more to the plight of the bottom billion than the doubling of aid flows.Indeed, the author shows that aid offers only part of the solution, and the way it is currently managed makes it in certain cases part of the problem. Rich countries and development agencies need to narrow the target by focusing more on the bottom billion, while at the same time broadening the instruments in order to consider policy tools other than aid. This process also characterizes the author's own research, which increases the focus of economic analysis by using cutting-edge statistical tools, while broadening the scope of relevant issues, in order to inform the decisions of policy makers. To give an example, people often wonder how much of Africa's wealth has fled the continent, or how much aid leaks into military spending. Paul Collier not only addresses these issues, he answers them by giving numerical estimates (respectively 38% and 11%).The book also contributes to the broader debate on globalization. The author has little tolerance for the protest crowds of anti-globalizers who besiege international financial institutions and G8 summits. He calls them by their name: they are anti-capitalists, and they have little interest in helping poor countries benefit from the system that they are fighting against. He also challenge people who care about global poverty but are driven by slogans, images, and anger, instead of rational analysis. But he is no rosy optimist either, and he offers a sobering view on global economic integration. Although globalization has worked wonders to lift a vast portion of humanity out of poverty, it is now making things harder for latecomers, who now face formidable competitors in China or in India. In his own words: "When Mauritius escaped the traps in the 1980s it rocketed to middle-income levels; when neighboring Madagascar finally escaped the traps two decades later, there was no rocket."The Bottom Billion therefore opens horizons across political divides. To quote from the introduction: "The left will find that approaches it has discounted, such as military interventions, trade, and encouraging growth, are critical means to the end it has long embraced. The right will find that, unlike the challenge of global poverty reduction, the problem of the bottom billion will not be fixed automatically by global growth, and that neglect now will become a security nightmare for the world of our children."

Billions of people stuck in severe poverty represents the most shameful aspect of the modern world. In a world of plenty, with industry and capital flow generating untold wealth and agriculture producing incredible yields capable of feeding the world with great variety, it is frustrating to know that so many of the world's people have not been reached. Across the political spectrum, all people express the desire to help bring the those living in such deplorable conditions into the world economy and into economic and nutritional security. All people are embarrassed by the world's astounding failure to have accomplished this. It is when you reach the possible solutions for helping the world's desperate that you start seeing differences, and sometimes harsh criticisms of one another. Typically, the leftward leaning are proponents of direct monetary aid, education, and health care, and tend to blame the dire straits of the poor countries on unfair treatment by governments and corporations. Meanwhile, the rightward leaning argue for stabilization via security and infrastructure development, with the goal of attracting investment by governments and corporations to spur capitalistic growth. In THE BOTTOM BILLION, Collier attempts an unbiased, strictly scientific look at the problem and proposes solutions that take a more middle-ground approach.The first half of the book is dedicated to explaining the vicious cycles and patterns that keep the poorest countries in such bad circumstances. Collier outlines four major "traps" that tend to prohibit economic growth, including the Conflict Trap, the Natural Resources Trap, Being Landlocked, and Bad Government. The only one of these that at first seems counterintuitive is the Natural Resources Trap, but Collier explains that when protections are not in place, or irresponsible governments are in power, gluts of money from natural resources often lead to wasteful spending (or worse), and a boom and bust cycle dependent on commodities that generates instability. After becoming accustomed to large amounts of money and spending it on unnecessary projects that later become difficult to cut, the typical outcome is underinvestment in growth. The other traps are fairly straightforward and often inter-related.While discussing the traps that keep the bottom billion down, a number of surprising conclusions were made. One involves the problem of too much aid without focus. Just giving poor countries money does not solve the problems that keep poor countries poor. At its worse, aid can become a sort of global welfare program that doesn't encourage productive, growth-oriented change. Also, democracies are not always effective at promoting positive change. Especially in countries with strong ethnic voting blocks, democracy often leads to suppression of one group as well as vote-buying by politicians. Without strong limitations on government and strong individual protections in place, democracies can actually be less effective at bringing the poorest countries out of stagnation than more authoritarian governments. Indeed, there are a myriad of factors that make it difficult to break out of the bottom billion, even with good policy. Some of these problems seem unavoidable. Investor opinion, capital flow out of poor countries, and the migration of educated workers all hamper the development of poor countries, and are all problems without easy (or maybe existing) solutions.Collier also attempts to make a case for helping the bottom billion for our own sakes, and not just out of pity for the desperate. His intentions were to not only show the dangers of ignoring the problem (poor, desperate people may turn to violence and terrorism), but to show the benefits of incorporating more people into a common world economy. Actually putting an economic price tag on helping the bottom billion, and even stating that it may not be economically worthwhile in some cases, may seem callous at first, but it meshes with the overall tone of the book, taking an unemotional and logical look at the situation.Besides highlighting and explaining the problems and why they are so stubborn, Collier outlines his recommendations for starting to help bring the bottom billion out of the darkness. His solutions are wide-ranging, and include increased, but targeted, aid, as well as possible military interventions to enforce security. Perhaps the biggest focus of the book revolves around creating and abiding by strong international charters. Setting guidelines for economic policy and trade practices would encourage poor countries to establish growth-oriented plans with the lure of increased partnerships with rich countries. Because real change for countries of the bottom billion must happen internally, providing incentives for good management may be our most powerful tool for helping to poorest in the world. If we can help the poorest countries focus on positive change, real long-term benefits will follow.The biggest criticism I have for THE BOTTOM BILLION is the over-reliance on Collier's own research. Literally, he cites no studies that he or his collaborators did not conduct. At times, the book seems a bit self-aggrandizing, especially as Collier discusses his personal experiences rubbing shoulders with world leaders and reformers. While full of good and seemingly-accurate information, the book could have been improved by being more inclusive of other research and other opinions. Lastly, parts of the book read much like a scientific journal on economics, and can be a bit dry. Just be prepared for that, and I think you'll find the book meets or exceeds your expectations.

Essence of poverty