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Selling out the ‘bottom billion’

Paul Collier’s book makes astute points about the predicament of the world’s poorest people. But his proposed solutions would likely make their lives even worse.

Daniel Ben-Ami

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Africa evokes strong emotions. In many ways it shows humanity at its poorest and most wretched. Every year millions of Africans die needlessly of easily preventable or curable diseases. Many more are locked in seemingly pointless but bloody conflicts. It is a massive continent awash with tragically squandered human potential.

The Bottom Billion is likely to provoke a powerful reaction from anyone interested in Africa’s problems. Although it is written in a dispassionate way, it is likely to anger many and inspire others. For it is a challenge to several competing views on development. It is an attack on the likes of Jeffrey Sachs, the celebrity economist who is the intellectual force behind the official United Nations Millennium Development Goals, for placing too much reliance on aid (1). And it is an assault on William Easterly, the main critic of Sachs, who argues that much aid is wasted (2).

Instead the author, Paul Collier, a professor at Oxford University and former head of research at the World Bank, sees greater Western intervention as central to solving the problem of development. This takes the form of support for military intervention as well as laws and charters to help regulate the behaviour of the poorest states. Although Collier does not explicitly call for a return to Empire his arguments constitute an important step in that direction.

Given this fact, many spiked readers may feel tempted to dismiss Collier’s arguments – but that would be a mistake. For a start they are highly influential. He was the senior adviser to the Blair Commission on Africa, has addressed the general assembly of the United Nations, and has given a seminar at 10 Downing Street. His book is endorsed by many influential figures, including Larry Summers (a former US treasury secretary and president of Harvard), Ernesto Zedillo (a former Mexican president), George Soros (a top financier) and Nicholas Stern (a former head of the British government economic service and author of an influential report on climate change) (3). It has had glowing reviews in such diverse publications as the Financial Times, New York Times and the London Observer (4).

Nor is Collier wrong about everything. On the contrary, he makes many astute points. His identification of the ‘bottom billion’ (the poorest people in the world) is important to recognise, and his description of the characteristics of the poorest states is accurate. He is also right to argue, contrary to many non-governmental organisations (NGOs), that economic growth is key to development.

Where he is mistaken, as this review will show, is in confusing descriptions of underdevelopment with explanations. He sees the plight of the poorest countries as the result of a simple economic malfunction. As a result, his solution is for the West, economically far larger and more stable than the poorer states, to fix what is broken. He does not see that such action will only make things worse for the poorest of the poor.

Collier’s approach to the problem of the bottom billion is based on econometrics. In other words, he uses economic statistics to identify what he sees as the key problems of development. Although the text of The Bottom Billion is free of equations or heavyweight statistics, there is a related bibliography of papers at the back of the book and many are available on his website (5).

The first step is to identify the bottom billion. Strictly speaking the book is not about Africa. Collier focuses on the world’s poorest billion people. Some of them live in places such as Bolivia, Burma, Cambodia, the Central Asian republics, Laos, North Korea and Yemen. Nor are all African states in the bottom billion. For instance, Botswana and South Africa are relatively rich. But since 70 per cent of the bottom billion live in Africa, the problem of extreme poverty can be seen as largely concentrated on that continent.

For Collier the statistics show that the ‘third world’ has shrunk dramatically (6). About one billion people live in the already prosperous developed world and four billion live in rapidly growing developing countries. Most of the world is, in his view, either already prosperous or heading that way. Discussion of poverty should focus on the poorest of the poor.

The statistics are certainly stark. For the middle four billion, the average rate of economic growth per head was 2.5 per cent a year in the 1970s, 4 per cent in the 1980s and 1990s, and 4.5 per cent in recent years. In contrast, the average growth rate for the bottom billion was 0.5 per cent per head in the 1970s, followed by an average annual decline of 0.4 per cent in the 1980s and a decline of 0.5 per cent in the 1990s. By 2000, the bottom billion were poorer than they had been in 1970 (7).

Such economic stagnation for the world’s poorest has had terrible human consequences. The average life expectancy in the bottom billion is 50 years, compared with 67 for other developing countries. Infant mortality – the proportion of children who die before their fifth birthday – is 14 per cent for the bottom billion and 4 per cent in other developing countries. Some 36 per cent have symptoms of long-term malnutrition compared with 20 per cent for other developing countries (8). If anything, such statistics underestimate the plight of the poorest countries, as those with the worst problems of all, such as Somalia, are excluded for lack of reliable data.

Although Collier makes an important distinction between the bottom billion and the rest, he tends to overdraw it. The problem of lack of development goes much further than extreme poverty. For example, 2.6billion people in the world live on less than $2 a day (9). The developing world still has a long way to go before it catches up with Western levels of prosperity. Even China, which has become so talked about with its rapid development over the past three decades, will take several more decades to catch up with the West in terms of living standards, even on the most optimistic assumptions.

Leaving this criticism aside, Collier’s work provides a useful description of the characteristics of the poorest countries. He describes them as typically the victim of one or more ‘traps’:

  • The conflict trap: The poorest countries are more prone to civil wars and military coups than others. Gross poverty, stagnant growth and dependence on primary commodities tend to exacerbate this problem.
  • The natural resource trap: Many of the world’s poorest countries are rich in one or more natural resources. Although many may see this as an advantage for economists, it is often associated with the ‘resource curse’. For example, wealth in a particular natural resource can make a country’s currency more expensive and so make other exports uncompetitive. Such countries are also prone to volatility in commodity markets and high levels of corruption. The last problem Collier refers to as ‘survival of the fattest’. Nigeria is probably the best-known example of a country rich in natural resources – in its case, oil – which has failed to develop.
  • The problem of being landlocked: Many of the world’s poorest countries have no direct access to the sea. As a result, it is hard for them to grow by exporting. In addition, their neighbours, which themselves are typically desperately poor, have little incentive to develop infrastructure for others.
  • The governance trap: The world’s poorest countries often suffer from what Collier sees as bad policies or bad governance. In more colloquial terms, their development is undermined by corruption.

Collier adds one other problem, which he does not classify as a ‘trap’ but is a barrier to the development of the poorest countries. In his view the development of many Asian countries from the 1980s onwards makes it harder for Africa. Asian countries have established themselves as substantial exporters of manufacturing goods at low costs. As a result, it has become even more difficult for emerging African countries to break into such markets.

This econometric approach to identifying the problems of the world’s poorest has advantages and disadvantages. On the plus side, it involves looking at the evidence rather than relying on preconceptions about poverty. Collier is scathing about those who romanticise third world conflicts or simply assume that a civil war must be a response to poverty or oppression.

The problem is that the ‘traps’ are not explanations of extreme poverty. Rather they are, as Collier concedes, probabilistic statements about problems that the poorest countries are likely to have. This is not the same as explaining why they are so poor.

For example, take the problem of being landlocked. As Collier himself points out some of the world’s richest countries are landlocked: Austria, Luxembourg and Switzerland. Botswana, too, relatively rich by African standards, has no direct access to the sea. Collier is aware of these exceptions but attempts to explain his way out of them. For instance, he points out that Switzerland is surrounded by countries with relatively good infrastructure. But such an argument easily reduces itself to a tautology: poor countries are poor because they live in impoverished areas.

It is also important to recognise that being landlocked is not a natural phenomenon. The borders of African states were largely drawn by Western colonial powers. As a result, many scarcely viable states were established. Collier recognises this fact but sees it as simply of historical interest.

The approach in The Bottom Billion also leaves out some key elements in the explanation of underdevelopment. One is that inequality seems deeply rooted in capitalism. In over two centuries of its existence, it has managed to provide relatively rapid growth overall, but that growth has typically been uneven and crisis-ridden.

Despite all the talk of ‘convergence’ with the rapid development of China and other Asian countries, the trend seems to be for new inequalities to emerge (10). While China has proved enormously successful in eliminating absolute poverty, it is also seeing the emergence of new inequalities on a vast scale. Until the late 1970s virtually everyone in China was dirt poor. Now extreme poverty is virtually eliminated but many are simply poor while there is also a growing middle class and a rising number of rich people. On a global scale, the bottom billion phenomenon is another example of a new inequality emerging.

Another problem with Collier’s approach is that he assumes that Western intervention is generally benign. Indeed the premise of his book is that the G8 group of leading industrialised countries has the potential to solve the problem of extreme poverty. While he attacks others for having preconceptions about poverty, he does not subject claims about the benefits of Western intervention to the same level of scrutiny. For him, the interventions in such places as Iraq, Sierra Leone and Somalia are apparently without any problems worth considering. The substantial evidence that Western intervention has made things worse in these countries, widely discussed in spiked, is not deemed even worthy of examination (11).

Finally, he ignores the problem of low horizons in relation to global inequality. In the 1950s and 1960s, development was generally taken to mean turning traditional, rural societies into modern, industrialised, urbanised ones. It implied a transformation from one type of society to another. Today, in contrast, the emphasis is on relieving the most extreme forms of poverty in the most destitute countries. Real development is seen as unrealistic and undesirable.

Such a viewpoint is damaging because it lessens the chances of development success. If even the desire to develop is muted, then it is unlikely to be achieved. It also means that external intervention is generally geared towards poverty reduction rather than development.

Collier does not see this viewpoint as a problem because he shares its premises. Indeed, all of the main schools of development share a starting point of low horizons, despite the heated debates that take place between them. Sachs often talks in grandiose terms, but in practice he focuses on reducing extreme poverty and introducing small-scale measures such as providing anti-malarial bed nets (12). Easterly attacks the ideology of development as inherently dangerous (13). And Collier himself focuses on the ‘bottom billion’.

Once the flaws in Collier’s argument are unveiled, the problems with his proposed solutions are readily apparent. Most obviously, military intervention is likely to lead to more instability rather than less. Western intervention tends to exacerbate conflicts within countries, as different sides jockey for position. The terrible turmoil in Iraq at present is a direct consequence of such intervention.

The other initiatives that Collier proposes are complementary to military intervention. He argues that aid should be made more interventionist, with ‘governance conditionality’ on how the money is used. He also proposes the extension of international ‘charters’ – essentially codes of conduct on how countries should behave.

In Collier’s view, such initiatives are all designed to reward the heroes and punish the villains within poor countries. But what they are likely to mean is an extension of conflict within the bottom billion. They are also profoundly undemocratic. It means that external Western forces are dictating how the poorer countries run themselves.

It is hard to imagine an approach that could make life worse for the poorest of the world, but Paul Collier’s perspective represents one. The intervention he advocates is likely to make the tendencies to disintegration in the poorest societies worse than ever. Such an initiative can only make real development a more distant dream.

Daniel Ben-Ami is a financial journalist and author based in London. Visit his website here

The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It by Paul Collier is published by Oxford University Press. (Buy this book from Amazon(UK) or Amazon(USA))

(1) See Postponing the ‘End of Poverty’ by Daniel Ben-Ami, 6 May 2005

(2) William Easterly’s best-known work is The White Man’s Burden, Penguin, 2006

(3) See Paul Collier’s homepage

(4) The reviews include: How the bottom billion are trapped, Martin Wolf, Financial Times, 13 May 2007; The least among us, Niall Ferguson, New York Times, 1 July 2007 and Actions will speak louder than words, Heather Stewart, Observer 10 June 2007

(5) See Paul Collier’s homepage

(6) The Bottom Billion, p3

(7) The Bottom Billion, p8-9

(8) The Bottom Billion, p7-8

(9) See Poverty Drops Below 1 Billion, says World Bank, 15 April 2007.

(10) Jeffrey Sachs is one of those who talks of an ‘age of convergence’. See Sachs sucks by Daniel Ben-Ami, 12 April 2007

(11) For a spiked critique of the interventionist case on Somalia see Somalia: killed by ‘kindness’ by Brendan O’Neill, 23 June 2006; on Rwanda see In the waiting room of the Rwandan genocide tribunal by Barrie Collins, 26 May 2006, and for a more general critique of liberal interventionism see The white liberal democrat’s burden by David Chandler, 28 June 2007.

(12) See Postponing the ‘End of Poverty’ by Daniel Ben-Ami, 6 May 2005

(13) See The ideology of development, William Easterly, Foreign Policy July / August 2007

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