I read a lot, almost entirely in non-fiction, and this book is easily one of the "top ten" on the future and one of the top three on extreme poverty, in my own limited reading.
There is an enormous amount of actionable wisdom in this book, which is deceptively easy to read and digest. The author's bottom line is clear early on:
A. The fifty failing states at the bottom, most in Africa, others in Central Asia, are a cesspool of misery that is terribly dangerous to all others, exporting disease, crime, and conflict.
B. The responsibility for peace to enable prosperity cannot be expected from within--it must be provided as a common good from outside. In support of this point, toward the end of the book, the author posits a 15:1 return on investment from $250M a year in investment and aid, mostly technical assistance.
This book is a superb guide for regional authorities and international coalitions with respect to the value of non-military interventions.
The author provides compelling yet concise overviews of the four traps that affect the billion at the bottom:
A. The Conflict Trap
B. The Natural Resource Export Trap
C. Landlocked in a Bad Neighbors Trap
D. Poor and Corrupt Governance
The author describes the need for a "whole of government" approach, both among those seeking to deliver assistance, and those receiving it.
I have a note, a new insight at least to me, that AIDs proliferated so quickly across Africa because of the combination of mass rape followed by mass migration. There are many other gifted turns of phrase throughout.
A study on the cost of a Kalashnikov is most helpful. The author tells us that the legacy of any war is the proliferation of inexpensive small arms into the open market.
Across the book the author points out that the gravest threat to governance and stability within any fragile economy is a standing army.
Each of the traps is discussed in depth.
The middle of the book outlines nine-strategies for the land-locked who suffer from being limited to their neighbors as a marketplace, rather than the world as a whole.
1. Work with neighbors to create cross-border transport infrastructure
2. Work to improve neighbors' economies for mutual benefit
3. Work to improve access to coastal areas (the author points out that the sea is so essential, that landlocked countries should not* be* countries, they should be part of a larger country that borders the sea)
4. Become a haven of peace, providing financial and other services.
5. Don't be air-locked or electronically-locked (the first study of the Marine Corps that I led in 1988-1989 found that half of the countries of concern did not have suitable ports but all had ample C-130 capable airfields).
6. Encourage remittances
7. Create transparent investment-friendly environment for resource prospecting
8. Focus on rural development
9. Attract aid
Toward the end of the book I am struck by the author's pointed (and documented) exclusion of democracy and civil rights as necessary conditions for reform. Instead, large populations, secondary education, and a recent civil war (opening paths to change), are key.
$64 billion is the cost to the region of a civil war, with $7 billion being the minimal expected return on investment for preventing a civil war in the country itself.
Bad policies come with a sixty year hang-over.
Asia is the solid middle and makes trade a marginal and unlikely option for rescuing Africa UNLESS there are a combination of trade barriers against imports from Asia, and unreciprocal trade preferences from richer countries. In the context of globalization, only capital and people offer hope.
In the author's view, capital is not going to the bottom billion because:
A. Bottom of the barrel risk
B. Too small to learn about
C. Genuinely fragile
In terms of human resources, after discussing capital flight, the author concludes that the educated leave as quickly as they can. I am inspired by this discussion to conclude that we need a Manhattan project for Africa, in which a Prosperity Corps of Gray Eagles is incentivized to adopt one of the 50 failed states, and provided with a semblance of normal living and working conditions along with bonuses for staying in-country for ten years or more. As I reflect on how the USA has spent $30 billion for "diplomacy" in 2007, and over $975 billion for waging war, (such that the Comptroller General just resigned from a fifteen year appointment after telling Congress the USA is "insolvent") this begs public outrage and engagement.
As the book makes its way to the conclusion the author's prose grabs me:
"We should be helping the heroes" attempting reform
We are guilty in the West of "inertia, ignorance, and incompetence."
The "cesspool of misery....is both terrible....and dangerous."
Several other noteworthy highlights (no substitute for buying and reading the book in its entirety:
Aid does offer a 1% growth kick
Aid bureaucracy, despite horror stories, adds real value in contrast to funds that vanish into the corrupt local government
Misdirection of unrestricted funds leads to militarization and instability.
The author touches briefly on the enormous value that industry can offer when it is finally incentivized to do so. DeBeers and its certification process are cited with respect, perhaps saving diamonds from going the way of fur.
The author stresses that top-down transparency enables bottom-up public scrutiny and the two together help drive out corruption (something Lawrence Lessig has committed the remainder of his life to).
There is an excellent section on irresponsible NGOs, notably Christian Aid, feared by the government and not understood by the public.
I put the book down with a very strong feeling of hope.
Paul Collier has created a true masterpiece in the Bottom Billion. This book plays a critical role as the bridge between the 'headless heart' that Jeffrey Sachs sometimes seems to be and the pessimism of Easterly. Collier espouses real solutions to real problems, which he outlines with fluidity and emotion. He clearly has an immense heart, and yet fills his book with hard facts and difficult, yet viable solutions. One of the most critical books of the year dealing with development, if not the decade.
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The Bottom Billion is a useful but flawed book. The people and countries on which Mr. Collier focuses his analysis certainly deserve the attention. One of humanity's great challenges is how to raise their living standards. I started this book with high hopes, and found the discussion of the four "traps" and of the disappointing results of globalization worthwhile.
But the author's tone is often combative and sneering, he greatly oversimplifies the results of the social science research studies reported in the book, and ignores the extensive analysis criticizing the methods and performance of the International Monetary Fund and World Bank over the past several decades. It's nice of him to mention that Joe Stiglitz hired him at the World Bank; it would have been more appropriate to acknowledge Stiglitz' powerful critique of the IMF's performance. And his support for the militarization of foreign aid is nothing short of astounding. Yes, on occasion a military solution might be needed to stabilize a failed state...but this is simply too costly to be a general solution to the problems of these countries.
I must also mention Collier's support for the Multilateral Agreement on Investment, or MAI. Should countries (states), even poor ones, be able to regulate the activities and investments of multinational corporations? The MAI, which was proposed by a group from the OECD in 1995, was withdrawn in 1998 when it became clear that the agreement would have limited the ability of signatory countries to control the activities of foreign corporations. Collier predictably bashes the NGO's that opposed the MAI.
And it's a small thing, but Collier repeatedly uses Iraq as an example. But Iraq was a middle-income country--at least before we invaded it--so using it as an exemplar of the approaches he suggests is simply sloppy social science.
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All societies were once poor, says the Oxford economist Paul Collier, but now most countries are either wealthy or at least lifting themselves out of poverty. In his view, about a billion people in the developed world are wealthy, and about four billion people live in countries that are, in fact, experiencing significant economic growth (cf. China and India). His book focuses on the one billion people badly stuck at the very bottom who live in countries that are not only horribly poor but not growing. These sixty countries are not merely "falling behind, they are falling apart." About 70% of these countries are in Africa, and, unlike the middle four billion people, they are poorer today than they were in 1970. "Picture this," writes Collier, "as a billion people stuck in a train that is slowly rolling backward downhill."
How and why has this happened? Collier and his colleagues identify "four distinct traps" that plague the bottom billion. They experience a disproportionate amount of conflict in civil wars and coups ("development in reverse"). They're caught in a natural resources paradox where what looks like a blessing (the presence of a significant natural resource) turns out to be a curse, because the natural resource tends to slow economic growth, inhibit diversification, and encourage autocracy. To some extent geography dictates economics; the bottom billion live in countries that are landlocked with bad neighbors, which means that transport corridors and nearby markets are bad or non-existent. Finally, and Collier is unsparing on this point, these countries experience horrible governance, massive corruption and breath-taking incompetence. In an interlude chapter he explains how and why globalization hasn't helped these countries like it has the middle four billion people-- trade problems, the lack of private capital flowing into the countries, and the flow of human and private financial capital out of the country.
Collier is a realist but not a pessimist. He views these problems as "serious but fixable." These countries must rescue themselves, but they can't and won't do it without help from the outside. There are powerful forces that resist change. In the last half of the book Collier explains how four policy instruments can make a difference. Aid to these countries is highly politicized, bureaucratized, and badly abused; it has severe problems and limitations, but it's still necessary. Second, Collier explains how military intervention can restore order, maintain peace, and prevent coups. In a chapter on laws and charters he argues for wealthy countries to change their own laws in ways to favor the bottom billion, and for international norms. The fourth instrument is better trade policy.
Collier wants to move beyond the left, exemplified in Jeffrey Sachs' book The End of Poverty that argues that more aid is the answer, and the right, exemplified in The White Man's Burden by William Easterly that suggests that more aid is the problem. We need a new sort of thinking that grapples with what he calls "three central proposition." First, we now face a development problem that is different than what we've had over the last forty years--not the one billion rich and the five billion poor, but the one billion people stuck at the very bottom. Second, this is not a contest between rich nations romanticizing poverty out of white guilt, but rather a titantic struggle within the bottom billion countries between genuine heroes who are working for change and powerful forces determined to preserve the status quo. Third, "we do not need to be bystanders. Our support for change can be decisive." In sum, Collier argues that we need to "narrow the target and broaden the instruments."
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The man who brought us the phrase "Diamonds are a guerilla's best friend." has now delivered the best book on development. Paul Collier is a researchers' researcher, but often writes like he's preparing ad copy. He distills mountains of data and years of analysis into less than 200 pages of easily (and enjoyably) read lessons and results of what the causes of poverty really are and what can realistically be done to overcome them. The strength of the book is that it reveals what the data say, without bending to preconceived notions or ideologies. Collier is direct and holds no punches, whether it be against Zimbabwe's Robert Mugabe, USAID, or NGOs. He's not looking to support politically-correct positions or vested interests, he simply goes after the truth, as revealed by empirical evidence, to answer the difficult questions about what are the causes of poverty, and how to go about best helping the people and societies that most need it.
The book will challenge you. Think that military intervention has no role in supporting the bottom billion? Think again. Although difficult in today's Iraq war environment, Professor Collier does an admirable job of trying to convince the reader that under certain circumstances military intervention is very helpful.
Collier identifies four traps that most of the 50 failing states fall into, often repeatedly. He shows why most standard development prescriptions don't work, and why. He asks difficult, direct questions (e.g. Does aid finance military spending?), finds and analyzes data to answer them (sorry, I don't want to spoil it). Most of the answers do not follow conventional thought.
But the best is saved for last: Professor Collier has a number of explicit suggestions, again, mostly unconventional, for an agenda for action to help the societies of the bottom billion. If you work in development, are interested in what the empirical data and research say about difficult development questions, or are just curious about the debates on development, especially in Africa, read this book. You will learn much and will be challenged.
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Humanity has never been so prosperous in recorded history, as we are in the beginning of the twenty-first century. However the bottom billion, the poorest of the poor continue to lead miserable lives just across our homes. This population accounts for a sixth of the world's population and is concentrated mostly in countries of Africa and Central Asia. Paul Collier's statistical analysis of huge databases painfully collected from various sources point out to four primary factors that contribute to "failing states": Conflict, Natural resources (and Dutch disease), Landlocked and Poor Governance. The book does not give too many details of the research methodology and statistical tools, but only presents a crisp summary of the outcome. This aspect is good for readers who would like to avoid heavy academic material and focus only on the issues in simple terms. In essence this approach makes difficult topics very simple to comprehend.
Paul Collier's structure of the book, firstly an overview of the bottom billion issues, then a chapter each for the four traps and a chapter each for four bold solutions (Aid, Military Intervention, Laws and Charters and Trade Policy) makes it highly readable.
To compare this book with "Culture and Prosperity" by John Kay, I found some common factors that are responsible for poverty. However, Collier's work is not just about what causes poverty, but in the current context of globalization, looking at utilizing the strengths of other prosperous countries and global institutions, to find a quick and permanent solution to banish poverty and misery from all parts of the world. This made me compare the book with "The End of Poverty" by Jeffrey Sachs. Collier's approach is broader than Sachs's and includes some bold measures like Military Intervention and takes a multi disciplinary approach. The deep passion and the urgency for solutions to end global poverty, is identical in both the books.
Some findings in the book are striking and interesting. For example, on the impact of globalization, Collier explains how globalization has further aggravated the problems of the bottom billion in terms of flight of skills and capital from these countries. Similarly, he advocates favorable trade policies from developed countries to protect the bottom billion countries from competition from China and India, since these Asian giants have already made rapid strides in economic growth in the last three decades during which the bottom billion have missed the boat. The boat would never come back in the near future and hence the need for some innovative measures.
On the whole, I would unhesitatingly give this book a five star rating. It is important that this book gets published in multiple languages to spread the great ideas, especially in those countries that matter most- the bottom and the top and to initiate global action to eradicate poverty from the face of this beautiful planet.
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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.
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For development professionals and those who care deeply about making aid work more effectively, this is an absolute must read. It confirms the need for agencies to focus on the long - run and to recognize and intervene quickly to take advantage of changing political landscapes. For those of us who have seen aid fail some many times, it provides us with a sound reminder that good program design is only part of the solution. We also need to change the mindsets of our own policy makers within the World Bank and the other large donors who are the decision makers on where aid flows. This book is extremely well - written and well supported with data. It is no doubt the best book I've read in the development aid genre.
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Overall, this is a very good book, and 21 earlier reviews on Amazon.com successfully summarize its good points. There are some really major problems, though.
One is that the situation of the bottom billion is even worse than Collier says, and worsening even faster. He does not take into account the rapid environmental collapse that has ruined farmers, fishermen, loggers, and subsistence producers in general. (One reviewer thinks that sector is still healthy; no, it isn't.) Rapid population increase, overfishing, rampant unregulated logging by rich-nation firms, oil extraction, soil erosion, water pollution, and so on have led to catastrophic decline for the rural majority in these countries. Collier's only comment is a dismissive one about "sacred" environmental issues (p. 108; "sacred" is a BAD word for economists, which tells you something about the breed).
I fear this is partly because the First World is at fault in much of this, and, though Collier does pillory the First World on occasion (notably its oil corporations and trade subsidies--he's very good on these), he generally has little to say about its shenanigans. Giant international logging, construction, fishing, mining, commodity, and above all armaments firms have done plenty to keep the bottom billion down, as Collier knows perfectly well. Above all, Collier is naturally kind to his former home, the World Bank, which kept loaning money to the Marcos dictatorship, the Mobutu Sese Seko government, and others of that nature, long after everyone knew what those governments were doing with it. The WB has also kept building large dams, though their own analysts have pointed out (in reports--and some to me personally, in more pungent language) that these dams are disastrous for local poor and rarely or never have favorable cost-benefit ratios. Collier is also high on "structural adjustments," without a word about those that led governments to close down schools and health care while continuing to feed bloated military establishments.
His dismissal of fair trade is a pretty good sample. He says it is a "charitable transfer." It is not, if it's done right. It's going around monopolistic (technically, oligopsonistic) commodity firms to get fair prices directly to producers. He then says all it does is keep the beneficiaries producing their products. Well, sure; it's supposed to. Coffee, his example, is something I happen to know a lot about. The small producers that grow good coffee rarely have an alternative, and can get really good prices for their stuff from fair trade. The ones who get fair-trade recognition generally produce the best. If they can go round, or even through, the five or six giant buyer/roaster firms and get reasonable prices, they SHOULD stay in coffee, unless they can find something better to do. Cheating people out of their livelihood and then making them pick up a nothing job is the alternative.
Here and elsewhere, Collier tends to use a dismissive style, often arguing by insult rather than by data. He frequently deploys the term "politically correct," a particularly mindless slur; it has no informational content at all, and prefaces many an unsupported point in this book. Recall, also, the slur use of "sacred." Lots more like that in here.
Collier has an excellent list of recommendations, and I agree with most of them, but if they are to work, we of the First World have to rein in not only our subsidies of our own (as he says), but also our adventuring and our giant firms above the law (not just oil, either). We also have to work on fair trade issues. The world talks of "free trade," but what we have now is subsidized giant firms, backed up and supported by military might (from Guatemala in 1954 to Iraq in 2003), bullying the bottom billion and everyone else.
Collier's ideas would help, even if this remained true--but none of his reforms are likely to be adopted in such a world.
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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 and advisor to the British government's Commission on Africa, he is one of the world's leading experts on African economies, and he has penned a comprehensive book on ways to lift the billion or so people living in failed or failing states into the 21st century.
Collier points out why this is important to us not just to the billion people who are living and dying in 14th Century conditions. With globalization and the flattening of the world the twenty first century world of material comfort, global travel, and economic interdependence will become increasingly vulnerable to these failed or failing states of chaos. As the bottom billion diverges from in increasingly sophisticated world economy, integration will become harder, not easier.
This book focuses on the 4 traps that keep the bottom countries from moving upward. These traps are: the conflict trap, the natural resources trap, the trap of being land locked with bad neighbors, and the trap of bad governance in a small country. Collier believes the best way to beat these traps is through economic growth. Collier provides a couple of recommendations for helping the poor: "narrow the target and broaden the instruments." Narrowing the target means focusing on the one billion of the world's people (70% of whom are in Africa) that are going nowhere fast. Broadening the instruments means shifting focus from aid to an arsenal of policy instruments such as better delivery of aid, occasional military intervention, international charters, and smarter trade policy.
Collier uses statistical analysis to prove many of his points, some of which are surprising in their outcomes. His list of experts who assisted him in this endeavor contributes immensely to the overall analysis and findings and gives the reader the impression that there is valid credibility in his work and findings. The best part of the book concerns Colliers thoughts on Globalization. Collier believes Globalization's effects on economies comes from three distinct process: trade in goods, flows of capital, and lastly the migration of people. Collier develops these themes and sheds some interesting light on the problems of the underdeveloped nations of the world.
Although Collier does not use foot notes, he does provide a list of research that contributed to this book. Collier also points out which research projects have undergone the scrutiny of his peers, and which research has not and leaves it up to the reader to decide on the validity.
The Bottom Billion is a very readable book, 192 pages, and provides the reader with some expert analysis and recommendations for assisting the failing nations of the world. I highly recommend this book to anyone who wants a comprehensive look at why states fail and how to assist them in their efforts to grow.
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