The Bottom Billion: a review

Why are poor countries poor and what can be done about it? One of the many delights of Paul Collier's The Bottom Billion is that he brings a marvellously high ratio of evidence to prejudice to these questions.
He describes superbly how the poorest countries are stuck in four poverty traps:
The conflict trap. Poverty raises the risk of civil war, which in turn destroys the economy.
The natural resources trap. Resources - oil, diamonds - crowd out other economic activity.
Being landlocked with bad neighbours.
Bad government.
His solutions for these traps don't toe any party line. For one thing, he says, "we cannot rescue them. The societies of the bottom billion can only be rescued from within."
He doubts that globalization and free trade can help much. It allows a brain drain and capital flight out of these countries, and they need protection from cheap Asian exports.
But he's also sceptical of unconditional aid; it's so politicized as to be dysfunctional, he says - though he also rejects the glib view that aid just ends up in Swiss bank accounts.
So, what are his answers? He has some ideas for reforming aid and trade policy - read them yourself. For me, though, some of his big, interesting, proposals are for governments to sign up to charters for democracy, budget transparency and investment.
I had thought these were just wishy-washy. But Collier points out that eastern European governments in the 1990s improved their governance and economic performance by committing to meet the standards necessary for joining the EU. He gives some evidence - necessarily incomplete - that similar commitment devices might help the poorest countries, partly by giving potential investors and aid donors greater security.
Another proposal is more controversial - the use of western military intervention to prevent civil wars.
I found this the weakest part of the book. A big claim requires big evidence, but Collier doesn't provide enough. Granted, there's one data point - Sierra Leone - which shows how cheap western military intervention can succeed. But Collier fails to show how this can be a model for elsewhere. Under what conditions can intervention work? What can western forces do to build safer societies and so avoid having to occupy countries for years?
A further issue I have is that the book is largely a description of his own research, with little review of the field of development economics: Easterly and Sachs warrant just one paragraph. This can lend the book a Freakonomics-type tone; readers who were irritated by that might be similarly irked by Collier.
However, these are quibbles. By economists' standards, Collier writes beautifully, with a mordant wit, which might be a necessary sanity-preserving device for anyone studying African economies.
Everyone with an interest in the poorest of the world should read this book. And if you don't have an interest in the poor, why the hell don't you?

Comments

[Peter Briffa]

Because they'll always be with us.

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"Another proposal is more controversial - the use of western military intervention to prevent civil wars."

Take up the white man's burden?

Even assuming this really is a good idea we would have to find a way of doing it a lot cheaper than at present - Sierra Leone is quite small compared to eg. Africa. Or Iraq.

Perhaps we can outsource our army to India, like many other service industries?

[Paulie]

Sounds like a bit affirmation the we Eustonites will enjoy very much.

I'll read it in the hope that it will answer quite an important question - 'Democracy - to broaden or deepen? - And is this really an either/or question?'