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

As a kid growing up in Nigeria, I thought that it was 'normal' that Latin Americans, Asians and Africans were classified as The Third World. Now as an adult, it seems that the only pictures of starving children I see on TV are those from my native continent. Despite the aid and attention that Africa has received in the last 20 years, most African countries are still stuck in pre-industrial poverty. Professor Collier's highly accessible book provides some illumination on the matter.

BOTTOM-BILLION IN BRIEF
The thesis of the book is that the economies of the poorest countries in the world, the so-called bottom-billion, have not grown in the last 30 years because they are stuck in one or more of the following traps: (1) the conflict trap; (2) the natural resource trap; (3) the "landlocked with bad neighbours" trap; and (4) the "bad governance in a small country" trap. Collier proposes the following solutions to the problems: (1) Military intervention; (2) adoption of voluntary laws and charters; and 3) changing rich-world trade policy.

WHAT I LIKED ABOUT THE BOOK
The book is written in a logical, easy-to-read style. Professor Collier, former head of research at the World Bank, is remarkably familiar with African societies. He rightly points out that aid and revenue from commodities have enriched local parasitic elites, who prefer to maintain the status quo rather than invest in economic development; 'rent' money, based solely on patronage, funds the gravy train for elites. The narrative is laced with delectable anecdotes of author's travels in Africa. He recalls how he was treated as a celebrity in the Central African Republic and how, after he disclosed that he worked for the World Bank, he was shunned by the Immigration official in Nigeria. The reader even learns jargon such as 'Dutch disease' and 'ex and ante' conditionality for investment.

Collier does not pull punches when describing the entrenched elite in the bottom-billion. If, after reading the book you think, "Geez, African elites are self-serving, egoistical spurns of the Devil", then you may be forgiven. Collier reserves his most excoriating remarks for the Angolans. According to Collier, when the East Timorese government needed an example of how to spend their anticipated oil revenues, they turned to Portuguese-speaking Angola. Collier snidely opined that they (the East Timorese) could have asked a brothel for a lecture on sanctity! Funny, sad but true.

Collier also rightly points out that in a number of bottom-billion countries, there are courageous men and women, who are working hard at reforming their economies. He names a few of them like Nigeria's Ngozi Okonji Iweala and Charles Soludo. Professor Collier notes that these brave people deserve support. So true!

Furthermore, he criticizes aid policy as had been administered to date. Aid has not worked and for good reason: it has been badly administered and done with the heart and not the head. As one who is sceptical of the arguments of both the aid-loving left and the aid-bashing right, I was pleased to read how Collier strikes a balance between both camps. His point: aid does not have to be given to poor countries as a sop for colonialism. It must be committed, targeted and given for over a decade to post-conflict societies.

CRITICISM OF THE BOOK
The first few chapters are about the Professor and his students/co-researchers. He reduces the complexity of human interaction to sterile models, which may be - wait for it - be used to predict the risk of civil war. How neat! He manages to do the odd name-dropping also; how his models were recognized by the CIA and the United Nations. An effort to put some humanity in the numbers would have helped the tone of the first few chapters. Also, he purposely skipped the names of the bottom-billion countries except for a few countries like Nigeria, Central African Republic and Zimbabwe. What harm could have been done by mentioning the names of the countries? Moreover, he does not give any information on the equally poor Central Asian countries. It would have been nice to see how the dynamics of poverty differ between Africa and Afghanistan, for example.

The book's major weakness is that its assessment of the failure of African economies is almost wholly agentic i.e. the book focuses on 'bad' actors and ignores the role institutions, especially the post-colonial systems in Africa. Collier observes that Africa has the largest number of landlocked countries in the world. According to him, "...The international system should not have let them become economic entities in the first place..." Well, that's putting a gloss on the issue here. Why not call a spade a spade? The reason why there are so many landlocked countries in Africa is colonialism. For example, landlocked Chad and Burkina Faso were carved up as French zones of influence in 1888 and remain so till this day. The Professor does not even mention the "C" word. The situation is even more complicated than Collier suggests. The international system (a.k.a. the European imperial powers) carved up Africa into a quilt of nation-states and left them at independence with schizophrenic political institutions that were neither African nor European. Using terms like "international system", Collier skilfully avoids naming names. Afterall, if a system caused the problem, no one did it. He asks us to get over it and move on as these countries are here to stay. I agree. Yet, I fear that this is an injustice to readers, who may not understand that most African countries are not 'nations'. Collier, who knows Africa very well, should have emphasised the 'stickiness' of institutions in the post-colonial era.

Reading the book, you'll get the impression that Africans merrily squandered Western aid in the last 50 years. The truth is more complex: there was the added complication of the Cold War, which was anything but cold in the Third World. Indeed, Africa and Latin America were the key frontlines in the Cold War. It is in Africa, for example, that the US supported unsavoury dictators like Mobutu Sese-Seko and Jonas Savimbi's UNITA, leading them to commit the heinous crimes against their own people. The book does not tell this side of the story well.

One of Professor Collier's instruments for pulling the bottom-billion out of poverty, military intervention, is not well-thought through; indeed, it seems to be an after-thought. He does not convincingly argue why the West should intervene in places like Congo. His argument that he does not want his son to live in such a divided world is a good one for the family dinner but may not cut much ice with hard-nosed politicians, beholden to electorates, who do not like to see their soldiers dragged through the streets of a 'God-forsaken' Third World country.

CONCLUSION
Colier has a message for both sides of the political spectrum. To the left: there is nothing romantic about the poor African native, who lives in abject misery, is 'happy' with his lot and in touch with nature. Aid and growth can and should be compatible if it is to be effective. To the right: Don't overplay the efficacy of growth. It alone cannot life the bottom billion out of poverty. Economic growth must be combined with some painful change of policies, such as at the WTO, to be effective. I hope that the right people are listening to this message.

This is a thought-provoking book: the problems of the poorest countries are deeply and cogently analysed and explained, and appropriate policies proposed. It has the added virtue of being written in simple and refreshingly straight-forward language. There is much that is absolutely original here.

The one comment I have is that Collier bases some of his policy prescriptions on the assumption that the only way to develop is through export, which seems to suggest export-led growth and large projects. There is nothing about micro projects and the need to work with the poor to alleviate poverty through the provision of appropriate/intermediate technology.

I e-mailed him about this and received a rapid and courteous reply saying that he did not have space in the book to cover everything and that he agreed that exporting only makes sense as a growth strategy for some countries and that he has no fault to find with the micro approach.

He also suggested I might write this review; so I did.

PS I also thoroughly recommend the lecture on his website.

Are you troubled by the grinding poverty in the poorest countries? If so, this book will give you hope that something more can be done.

How can a global economy that routinely produces new billionaires leave a billion people behind in countries where the economic prospects are bleak despite enormous spending aimed at turning things around? Obviously, the remedy isn't working. You could have figured that out for yourself without reading this book.

Professor Paul Collier takes us beyond that disquieting simplification to measure what some of the reasons are that contribute to the stalled economies in those countries (which are mostly located in sub-Saharan Africa and central Asia) where a billion people live.

The primary factors that he can isolate include frequent armed conflicts (coups, civil wars, and wars with other countries), producing high value natural resources that can be easily exported, having no access to the oceans while being surrounded by neighboring countries having a lot of problems, and poorly performing government in a small country. Armed conflicts not only take a lot of lives and do a lot of damage; armed conflicts drive people into new areas creating enormous dislocations and increased disease. Armed conflicts interrupt the ability to run a farm, a business, or to have a normal life. High value exports encourage those in government to seek payoffs from the exports while the exports drive up the value of the currency making local businesses less competitive with imports. If you are surrounded by bad neighbors, you cannot do much exporting or importing so your economy is stuck where it is. A poorly performing government simply siphons off funds into corruption.

If a poor country overcomes these problems, it has new issue: There may not be a local size sufficient to compete with other low-cost labor markets in global exports.

Give a country too much aid of the wrong kind, and you make things worse. Excess infrastructure aid (a current favorite among developed countries) leads to corruption and more spending on the military (which increases the risk of armed conflicts). Military intervention is only cost effective if those who are the peace keepers are serious and the spending is low (unlike Iraq). Laws and charters can provide guidelines that can make the subsequent actions more appropriate. Appropriate trade policies can also help open markets for those from the poorest countries.

The book concludes with a call to action to shift development spending from the middle four billion to the bottom billion while increasing reliance on influences other than sending money for aid.

I appreciated having the chance to read this book and recommend it to those who want to know what can be done to help the poorest people. I would have learned more if Professor Collier had shared more details of his research, rather than just citations of his academic works. I was particularly interested in how strong these statistical patterns are. I was also curious about the multivariate effect of these factors in the past.

I have a lot of admiration for the hard work that goes into assembling data to do this kind of work and to then find ways to draw conclusions from the data that make sense. Bravo to Professor Collier and his colleagues!

At the same time, I would encourage serious readers to also look at the problem from the ground up . . . what educated people who live in these countries can do to make things better for the most impoverished. I am highly encouraged by the work that some of my students have done in identifying how small educational and capital inputs can generate enormous numbers of successful entrepreneurs who need employees. Many of these nations lack an educational infrastructure that can produce the skilled labor and business leadership needed for rapid economic growth. It looks to me like working on providing such advanced educational opportunities could be a great way to attack these persistent problems, as well.