The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It (Hardcover) by Paul Collier

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09/27/07

Afrofuturist rated it:

bookshelves: globalization

Read in September, 2007

A raging moderate's take on how the G8 should tackle global poverty. The thesis, as suggested by the title, lies in a new name for what we used to call "the Third World": rather than divide the globe into developed and developing nations, he suggests, we need to see three divisions: a developed billion, a developing four billion, and a stagnant bottom billion. The middle group is entering capitalist modernity and profiting, while the bottom billion is stuck in a series of 'traps' that ...more A raging moderate's take on how the G8 should tackle global poverty. The thesis, as suggested by the title, lies in a new name for what we used to call "the Third World": rather than divide the globe into developed and developing nations, he suggests, we need to see three divisions: a developed billion, a developing four billion, and a stagnant bottom billion. The middle group is entering capitalist modernity and profiting, while the bottom billion is stuck in a series of 'traps' that include civil war, being land-locked, being dependent on natural resource extraction (especially oil), and bad governance.

The difference between the Bottom Billion and the Third World seems to be that the former starts and ends on the African continent. So is 'the bottom billion' just a euphemism for Africa? He insists it is not, but admits that almost all the countries in the bottom billion (he deliberately chooses not to list them) are in Africa. And almost all his examples come from Africa, and so even he ends up settling on 'Africa+' -- Africa plus a couple other countries in central Asia -- as another name for the bottom billion. His intention is to get policy makers from fixating in a racist fashion on the intractable problems of Africans. Ever the economist, he insists that Africa's problems are the consequence of the economic and political 'traps' he discusses, and not a result of being African. Here, we are clearly in that annoying social science realm where 'culture' is only ever a name for a debilitating condition that prevents one from behaving as rational choice theory predicts. The idea that we might consider African culture as relevant in a positive way, when it occurs to him at all, is dismissed as the ravings of Marxists.

The author tries to strike a balance between 'the left' who believes African poverty is the fault of the West (legacy of colonialism, predatory capitalism, etc.) and 'the right' who believe that it is the fault of the moral hazard of providing aid (which lines the pockets of dictators and distorts market incentives). He is not stupid enough to fall for either side, but both seem straw figures set primarily to make his arguments look good. The best parts of the book were his suspicion of simplistic, mono-causal explanations, and the case he makes for buttressing our vivid images of what Africa must be like (starving people, child soldiers, Idi Amin) with mutivariate analyses and rational discourse. Citizens in the West, his audience, need to educate themselves in areas like trade policy so that they can actually hold their governments accountable. Fair trade coffee is not enough.

This is not a deep or stunning book, nor is it one that ever questions the right of capitalism and markets to dominate the lifeworld. It is pro-growth to the point of dismissing entirely any consideration for the living conditions in the globalizing "middle tier": those lucky enough to be working in maquiladoras in Mexico, I guess, rather than fleeing the Lord's Resistance Army in Uganda. Factory work, he suggests at one point, sounding for all the world like a 19th century Manchester industrialist, is far more interesting and rewarding than the boredom of living on a farm or selling cigarettes on the street. The only problem the bottom billion seem to have is failing to get in on the game India and China are now playing.

My other problem is with his division of the world into nations instead of rich and poor. Post-Katrina, policy makers really ought to know better than to preserve this old rich nations-poor nations formula, which wilfully omits consideration of the structures of wealth and poverty within and across nations. I don't think the nation should drop out entirely, but discussions that center around bringing 'them' up to 'our' level are always disatisfying to me. Ironically, they draw on precisley the kind of vivid images that he argues we ought to replace with more sophisticated analyses. Economist, heal thyself!(less)

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05/17/09

Stefani rated it:

I think Collier's major challenge here is to change the mindset of many of the investors and/or aid organizations that think the best approach to developing nations is to simply throw large sums of money at them, hoping for the best. What he suggests, with ample research to support his thesis, is that the money often times is mismanaged or embezzled by the corrupt government. A perfect example of this would be Chad; several million dollars in aid were given to Chad specifically for health care...more I think Collier's major challenge here is to change the mindset of many of the investors and/or aid organizations that think the best approach to developing nations is to simply throw large sums of money at them, hoping for the best. What he suggests, with ample research to support his thesis, is that the money often times is mismanaged or embezzled by the corrupt government. A perfect example of this would be Chad; several million dollars in aid were given to Chad specifically for health care. When Collier and his colleagues checked the data several years later, 90% of the money had been utilized for non-health oriented projects.

Collier has identified several traps that bottom billion countries fall into that ultimately lead to their stagnation and inability to grow economically. Two of the major traps are as follows:

(1) Natural resources - having natural resources can actually effect the economy negatively. If there is too much reliance on natural resources as an export, other exports will fail. For example, Nigeria relied on oil as an export heavily in the 80's, and let production lapse on their two other important exports, peanuts and cocoa. In 1986, world prices for oil crashed, and so Nigeria's reliance on oil caused their economy to suffer. Additionally, profits from a natural resource such as oil tend to mainly benefit the government, with only some trickle-down. to ordinary citizens. When exports are more diversified, for example peanuts or cocoa as well as oil, those profits can directly benefit the farmers that are involved with selling these products and improve quality of life for citizens.

(2) Conflict - 73% of countries in the bottom billion have recently been through a civil war or are still in one. Rebellion is easier in a low-income country and young, unemployed men are the best recruits for soldiers in a war, regardless of the reasons for going to war. Additionally, reliance on a primary commodity, such as oil, can increase the chances of going to war, for control of the profits related to this resource. Rebuilding an economy that takes such a hit after a war (or a series of wars), is increasingly difficult. Investors are less likely to want to invest in a war-torn and dangerous country.

Collier suggests that aid, either from NGO's or private investors, should be managed effectively by the donor. It should be given in increments, based on how well it is managed or there should be accountability for how the funds are managed within a certain time frame. If a major media outlet, such as a TV station or newspaper, can report these findings, the government will be forced to be accountable for how the funds were used. Collier also suggests international laws or mandates that would provide guidelines to countries as to how funds should be utilized, so that individual donors could not be blamed for mismanagement.

I think Collier comes up with some seemingly good solutions to very challenging issues that plague the developing world. His biggest challenge will be convincing aid organizations that these changes would be beneficial enough to implement them.

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07/25/08

Padraic Ryan rated it:

bookshelves: economics, world

Read in October, 2008

recommended to Padraic by: TED

Clear, specific, and based on tons of empirical data - everything that the development discourse is missing. Gives a very coherent plan for making the world's poorest less poor.

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11/02/07

Alex rated it:

Read in October, 2007

Best of the 'how to save the poor' genre so far.

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03/05/09

Briynne rated it:

Read in April, 2009

I thought this was brilliant. That being said, I read a shining review of it from The Economist and probably would have thought it was brilliant even if it was twaddle, such is my reverence.

I was really impressed by how sensible it was. I honestly believe that it's one of the cardinal sins of our time that we take development advice from people like Bono rather than this man. Collier refers to this phenomenon as "hearts without heads" and I thought that was a succinct ...more I thought this was brilliant. That being said, I read a shining review of it from The Economist and probably would have thought it was brilliant even if it was twaddle, such is my reverence.

I was really impressed by how sensible it was. I honestly believe that it's one of the cardinal sins of our time that we take development advice from people like Bono rather than this man. Collier refers to this phenomenon as "hearts without heads" and I thought that was a succinct and very gracious way of describing the way aid agencies have to rely on oversimplified, headline-grabbing issues to get the money they want. Talking about infrastructure spending doesn't really tug on the heartstrings the way pictures of little kids living on trash heaps does. So, aid money disproportionately goes to social band-aids rather than root problems.

Collier, however, goes beyond photo-op development and I found his arguments convincing and well presented. His main thesis surrounds four "development traps" that the countries containing the poorest billion people have been caught in (some in more than one). He talks about the traps of conflict, natural resources (the sadly ironic "Dutch Disease" of a big influx of one-product revenue actually making a country worse off), being landlocked with bad neighbors, and bad governance.

I thought that the chapter he dedicated to the possibilities for military intervention was particularly good. I'm not, nor ever have been, strictly opposed to the use of cost-effective military force in international affairs - I think it has a place, regardless of our somewhat spotty track-record of applying it. Collier rightly, in my opinion, praises the interventions in Sierra Leone and Kuwait. Even more rightly he slams the US for the Mogadishu debacle, not for the 18 dead soldiers, but for not having the sense to realize that casualties are a natural side-effect of using military force. Our squeamishness notoriously cost about half a million Rwandans their lives shortly thereafter when the Western world refused to get in the middle of things after having "learned their lesson" in Somalia. He presents a very practical middle ground between bleeding-heart doves and block-headed hawks that really struck the right note with me.

I highly, highly recommend this book to anyone who is interested in the state of the world, economics, or international politics. It's highly educational and very well done. Plus, Collier heaps credit where it is due to research partners, which makes me think he might be a good person as well. I have the beginnings of an academic crush :)

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01/28/09

Heather rated it:

Read in May, 2009

As most of the countries of the world are quickly developing and progressing the gap between the rich and the poor and development and less-developed is increasing in many areas, specificially in the "bottom billion." The poorest billion people on the earth continue to be poor while the rest of the world passes them by. These are the countries we really need to be focusing on to make lasting and important improvements. But helping them get out of the traps that have made them poor i...more

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09/12/08

martha rated it:

bookshelves: 2008, nonfiction

Read in September, 2008

An interesting analysis of the reasons for the most severe global poverty, and ways to overcome it. Paul Collier's thesis is that we're rapidly moving a way from a world with 1 billion people living in developed countries and 5 billion in undeveloped countries, to one where 4 billion people are rapidly developing while the poorest 1 billion are utterly stuck. I liked how he broke down the reasons into specific traps -- landlocked, natural resources, etc, and the anecdotes he told about various...more

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09/07/08

Jason rated it:

Collier loves his research. He also loves the research of people who have studied under him. Finally, he loves the research of people he works with.

While I have no doubt that his research has produced some fruitful insights into poverty, I don't think his book is the amazing must-read development book of the year - or even a book really worth reading. Here's the nutshell version, that will save you some money:

The bottom billion people out there (part of a number of count...more

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05/07/08

Andrew rated it:

Read in July, 2008

recommends it for: globalization and aid enthusiasts

Some say that Collier's writing style is very straightforward and simple, but I spent a lot of time getting through the mere 192 pages of this book. Following his logic (I've taken some Econ classes) and evidence is a bit tedious at times. I found myself skimming at times before forcing myself to reread some parts. He provides a lot of examples, tells lots of stories, and presents lot of research (I think mostly his own work, which makes me suspicious of cherry-picking).

Collier desc...more Some say that Collier's writing style is very straightforward and simple, but I spent a lot of time getting through the mere 192 pages of this book. Following his logic (I've taken some Econ classes) and evidence is a bit tedious at times. I found myself skimming at times before forcing myself to reread some parts. He provides a lot of examples, tells lots of stories, and presents lot of research (I think mostly his own work, which makes me suspicious of cherry-picking).

Collier describes how aid currently helps all developing nations (the bottom 5 of 6 billion people in the world). But, he advocates taking about the top 1 million in the developed work, a middle 4 million on track to becoming prosperous, and the bottom billion who have seen little to no growth over the past forty years. This is a paradigm that I have never heard.

Collier goes on to describe 4 traps for which he provides plenty of evidence: conflict, natural resource, landlocked, and poor governance. Then, he describes 4 instruments to generate growth in the bottom billion: aid, military intervention, laws, and trade. He describes how we use lots of aid (mostly not effectively), but neglects the other three. Collier describes a military intervention (like Britain in Sierra Leonne in 2004) that can help the bottom billion without being US in Iraq. He blabs on and on about laws for which I zoned out because he sounded too idealistic for what these broad laws could accomplish. Then, he finished with talking about how effective trade policies can end the poverty trap (see below).

Cool I learned about:
- Dutch disease, where foreign aid can hamper the competitiveness of a country's exports.
- Why natural resource wealth/resource rents are not usually compatible with democracies (ie. Middle East, Venezuela).
- For aid to work properly, it must be given in a bolus amount and then significantly scaled back to prevent Dutch disease. Yet, Collier also says that donor countries should be ready to commit to providing for at least 10 years.

One of the interesting points brought up in this book was about the role of globalization. Though he seems to support the WTO and free trade so that countries in the bottom billion can converge (the way Ireland and Poland have done in the EU), he supports an additional step: unilateral free trade. In this mechanism, bottom billion exports are not tariffed in rich nations without the requirement for reciprocation.

In all, this was certainly a solid middle-ground between The End of Poverty and White Man's Burden (both of which I've read). Compared to the other two books, Collier is much less dogmatic. He does not describe ending poverty as a simply easy task (see Sachs) or simply impossible (see Easterly); in fact, after reading this book, I'm a bit depressed with all the complexities that he presents (though not his intention, I'm sure). (less)

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01/22/08

Hanaan rated it:

After only intending to read the dustjacket I ended up getting through the whole thing in about an hour and a half. Its an incredibly quick read if you are familiar with the debates, mostly because of Collier's very direct and I think very nice writing style. He doesn't say anything new or controversial (he draws a lot on his more famous papers), but he sums up his very sensible conclusions after having spent at least the last 30 years at the very top echelons of the development world. As former...more

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12/20/07

Rob Rich added it

A thorough and sobering theory of economic development issues in a much discussed segment of countries. Collier has down a lot of quantitative work on several related issues and clearly is aiming for a certain sort of authority based in his percieved objectivity. He does escape out of some left-right dichotomies in discussing the actual development and security policies of the hard currency economies and the potential for those policies. I also appreciated his discussions of the importance of ...more

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10/28/07

Max Stone rated it:

Read in December, 2007

Overall a good book serving a unfilled niche. Generally books on the topic of how various actions (in particular aid) affect developing nations are either screeds about how developed countries need to give 10 times as much aid (Jeff Sachs, e.g. in his book End of Poverty), or polemics about how most or all aid is useless or even destructive (Easterly). There has been a remarkable lack of books (at least that I have seen) taking a middle road on these topics, as this book attempts to do. As su...more Overall a good book serving a unfilled niche. Generally books on the topic of how various actions (in particular aid) affect developing nations are either screeds about how developed countries need to give 10 times as much aid (Jeff Sachs, e.g. in his book End of Poverty), or polemics about how most or all aid is useless or even destructive (Easterly). There has been a remarkable lack of books (at least that I have seen) taking a middle road on these topics, as this book attempts to do. As such it already has the instant at least semi-credibility of a non-polemic. (fwiw, I tend to be naturally more in Sachs camp, although not entirely, and have always struggled to know what to believe given that his writing is pretty much all to convince the reader of a particular point of view).

In addition, its arguments pro and con various things tend to seem reasonable and in many cases were things I hadn't considered before, e.g.
(a) how general budget aid is in many ways similar to natural resource wealth and hence has certain negatives (e.g. dutch disease), and
(b) how providing foreign expertise (whether medical, economic, or otherwise) might be a good form of aid (doesn't suffer from dutch disease; in certain circumstances is the most needed thing) even though it has horrible PR (e.g. Sachs might say it is not real aid since it is paying the relatively expensive salaries of foreign aid tearms).

One problem I had with the book is that he is constantly, and I really mean *constantly*, referencing his own research (including unpublished, i.e. not yet peer reviewed, stuff). In the end there is not a bibliography in the standard sense but rather a list of his own research pieces which are relevant (i.e. literally nothing that doesn't include him as an author). That would be ok (although still not great) in a book about his research on the topic, but if the purpose is to provide an objective view of what is known on the topic to the lay reader (and I think that is the purpose), it seems bad, in that it is impossible to believe that all good research on the topic was done by him.

But overall a good book. And not too long, which I think is important (at least I would much rather read 200-300 pages on the topic than 1000 pages, at least from a single author).

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08/12/07

Justin rated it:

Read in March, 2008

There are a group of countries that will be the havens of terrorists and theives because their economies are in disregard and travesty. The political right fails to acknowledge the importance of lifting these countries up, the political left is unwilling to do much more than provide aid money.

Traps like civil unrest and primary resource dependence are leading these countries to a point where they will always have a populace in poverty.

The world must use new innovative me...more

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02/14/09

Mel rated it:

bookshelves: re-think-your-world

Read in November, 2008

A practical and realistic assessment of the structures and forces at play in the emergence and persistence of global inequality. Highly influenced by observable trends and realities (but at times removed from the reality of passion, greed, grievance, and the individual experience) Collier paves the middle ground in development theory between Sachs' dogmatic optimism and Easterly's apprehensive realism.

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01/14/09

Ericka rated it:

Poor scholarship
Lacks critique of objections to his proposed solutions
Lacks evidence--debunks failed policies based on his word with no supporting evidence
Fails to address health and education issues
Obvious bias towards capitalism and free market economies being the solution to world problems
Lacks citations of any data rather uses a "based on previous research" approach which nullifies any empirical claims of this particular book

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04/21/09

Joseph rated it:

A very enlightening read though a fairly technical book. (I felt like I was reading a textbook at times) The author explores the plight of many third world countries around the world, how they are trapped in slow economic growth situations and why. The book does a good job presenting the situations as complex with no easy solutions and discussing realistic approaches to the situation.

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06/24/08

Nina rated it:

Read in July, 2008

recommended to Nina by: Oliver Rothschild
recommends it for: anyone interested in a world with more equality.

A quick, easy-to-read primer on what the developed can do to help bottom tier developing countries escape the four pitfalls (constant conflict, having natural resources that support corrupt regimes, being landlocked with bad neighbors, and simply having entrenched corrupt governance). Collier's solutions? Implement heavy well-directed aid in post-conflict situations for a good decade, use military intervention in post-conflict situations to provide security, develop international charters to pro...more

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02/17/09

Walt rated it:

bookshelves: politics--current-events

Read in March, 2009

I learned a lot from this book; but I still missed a lot. The author is clearly writing for a better-educated audience who has passing familiarity with the international world of business and finance.

I remain unconvinced that the end to poverty in the poorest countries in the world comes from promoting exports. The author's devotion to capitalism is a little off-putting. Just because capital flows in different directions does not mean that quality of life improves. Of course, I...more

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10/08/07

Cory rated it:

Read in September, 2007

As everyone has said, this was a nice, high-level book on development that sits somewhere between Easterly's pessimistic "White Man's Burden", and Sachs' perhaps naive "End of Poverty". The author does a nice job (sometimes almost to a fault) of shielding the reader from the hard economical data so that he can make his point clearly. I particularly liked how he chose to focus on the bottom billion people in extreme poverty, instead of the 5 billion in normal poverty that Sa...more

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03/30/09

Frank rated it:

bookshelves: recent

Read in December, 2008

This is a fascinating subject, but the writing is a bit dry. I'm about 2/3 through it, but it has been set aside in favor of some more exciting books received at Christmas. I would strongly recommend this book to anyone interested in international development.

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