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

Paul Collier

May 2007 · Oxford University Press

About this ebook

In the universally acclaimed and award-winning The Bottom Billion, Paul Collier reveals that fifty failed states--home to the poorest one billion people on Earth--pose the central challenge of the developing world in the twenty-first century. The book shines much-needed light on this group of small nations, largely unnoticed by the industrialized West, that are dropping further and further behind the majority of the world's people, often falling into an absolute decline in living standards. A struggle rages within each of these nations between reformers and corrupt leaders--and the corrupt are winning. Collier analyzes the causes of failure, pointing to a set of traps that ensnare these countries, including civil war, a dependence on the extraction and export of natural resources, and bad governance. Standard solutions do not work, he writes; aid is often ineffective, and globalization can actually make matters worse, driving development to more stable nations. What the bottom billion need, Collier argues, is a bold new plan supported by the Group of Eight industrialized nations. If failed states are ever to be helped, the G8 will have to adopt preferential trade policies, new laws against corruption, new international charters, and even conduct carefully calibrated military interventions. Collier has spent a lifetime working to end global poverty. In The Bottom Billion, he offers real hope for solving one of the great humanitarian crises facing the world today. "Set to become a classic. Crammed with statistical nuggets and common sense, his book should be compulsory reading." --The Economist "If Sachs seems too saintly and Easterly too cynical, then Collier is the authentic old Africa hand: he knows the terrain and has a keen ear.... If you've ever found yourself on one side or the other of those arguments--and who hasn't?--then you simply must read this book." --Niall Ferguson, The New York Times Book Review "Rich in both analysis and recommendations.... Read this book. You will learn much you do not know. It will also change the way you look at the tragedy of persistent poverty in a world of plenty." --Financial Times

Ratings and reviews

This is one the best policy books that I have read and an example of what a good policy book should be all about. It deals with the subject that is often in public spotlight and yet it seems as intractable today as it was decades ago. This sad state of affairs may in at least part be attributed to some of the misunderstanding of what global poverty is all about, who is most affected by it, and what sort of traps those most affected find themselves incapable of escaping. As this book clearly argues, the so called "poverty trap" in and of itself is not a trap at all, since otherwise all World would still be as poor as a few centuries ago. Furthermore, vast segments of the "global poor" actually live in countries that are developing at a more or less steady pace and can expect to be lifted out of that poverty within a generation or two. The ones who seem stuck are the bottom billion of the world population, and this book deals with them. The research that this book is based on comes up with four basic traps that could permanently hinder the poorest countries in development. The traps, some of them counterintuitive, are: 1. The Conflict Trap 2. The Natural Resource Trap 3. Landlocked with Bad Neighbors 4. Bad Governance in a Small Country Not every one of the poorest countries in the world is subject to all of these traps, but they are subject to at least one of them. Furthermore, Collier is not content to just describe the problem; he offers several courses of action that can deal with them. At least one of them, military interventions, has been largely discredited lately in the eyes of the public and policy wonks alike. However, if we are sincere and serious about helping the poorest in this world, we need to keep the military option open. All in all, this is a wonderful book that is both data-driven and engaging. Even if you have not followed the issues surrounding global poverty in the past, this book may induce you to get engaged in thinking about it more actively and seriously.

Paul Collier’s slim and informative volume is true to my recollection of the man from Oxford. The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It is engaging, concise, and powerfully argued. It is also unsparing in its criticism. Collier explains that the ‘developing world’ consists of two groups of states: those experiencing sustained growth and thus seeing their standard of living converging with those in the rich world and those that are ’stuck’ in poverty, with stagnant growth or absolute decline. Poverty traps The ’stuck’ states - where the world’s poorest billion inhabitants are concentrated - are trapped in one of four ways: by conflict, natural resources, being landlocked with bad neighbours, and by bad governance. States can be trapped in more than one simultaneously and, even when they escape, there are systemic reasons for which they are unusually likely to fall back into one. The discussion of the traps is particularly informative because of how quantitative methods have been used in support of anecdotal arguments. Not only are ‘bottom billion’ states unusually likely to suffer from conflict, corruption, and similar problems, but some of the most important paths to growth used by states that have already escaped poverty are closed to them. To grow through the export of manufactured goods, you need both low wages and economies of scale. Even if wages in Ghana are lower than those in China, China has the infrastructure and the attention of investors. The presence of export-driven Asian economies makes it harder for ‘bottom billion’ states to get on a path to development. Solutions Collier’s proposed solutions include aid, military intervention, changes to domestic and international laws and norms, and changes to trade policy. Much of it is familiar to those who have followed development debates: the problems with agricultural tariffs, the way aid is often used to serve domestic interests rather than poverty reduction, corruption within extractive industries, and the like. His most interesting ideas are the five international ‘charters’ he proposes. These would establish norms of best practice in relation to natural resource revenues, democracy, budget transparency, postconflict situations, and investment. Examining them in detail exceeds what can be written here, but it is fair to say that his suggestions are novel and well argued. He also proposes that ‘bottom billion’ states should see import tariffs in rich states immediately removed for their benefit. This is meant to give them a chance of getting onto the path of manufacture-led growth, despite the current advantages of fast-growing Asian states. His idea that states that meet standards of transparency and democracy should be given international guarantees against being overthrown in coups is also a novel and interesting one. Position in the development debate Collier’s book is partly a response to Jeffrey Sachs’ much discussed The End of Poverty: Economic Possibilities for Our Time. Sachs pays much more attention to disease and has more faith in the power of foreign aid, but the two analyses are not really contradictory. Together, they help to define a debate that should be raging within the international development community. Collier’s treatment is surprisingly comprehensive for such a modest volume, covering everything from coups to domestic capital flight in 200 pages. The approach taken is very quantitatively oriented, backing up assertions through the use of statistical methods that are described but not comprehensively laid out. Those wanting to really evaluate his methodology should read the papers cited in an appendix. Several are linked on his website. Environmental issues Environmental issues receive scant attention in this analysis. When mentioned, they are mostly derided as distractions from the real task of poverty reduction. It is fair enough to say that environmental

Talks about how "poor" countries are failing due to corrupt government, exploitation of natural resources, and military conflict. Yet, at no point does the book mention the fact that western culture is the reason those problems exist in the first place. Comes off as an American-biased, privileged view of the world.

About the author

Paul Collier is Professor of Economics and Director of the Center for the Study of African Economies at Oxford University. Former director of Development Research at the World Bank, he is one of the world's leading experts on African economies, and is the author of Breaking the Conflict Trap, among other books.