Elegantly brilliant, incisive clarity, quite extraordinary

books:


	• The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It Paul Collier Oxford University Press, 2007 - 224 pages average customer review:based on 42 reviews view larger image
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highly recommended

Elegantly brilliant, incisive clarity, quite extraordinary

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.

The other three books that have inspired me in this specific area are:
The Fortune at the Bottom of the Pyramid
Creating a World Without Poverty: Social Business and the Future of Capitalism
The End of Poverty: Economic Possibilities for Our Time

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.

Other books I recommend, in addition to the three above:
A More Secure World: Our Shared Responsibility--Report of the Secretary-General's High-level Panel on Threats, Challenges and Change
Deliver Us from Evil: Peacekeepers, Warlords and a World of Endless Conflict
Confessions of an Economic Hit Man
The Shock Doctrine: The Rise of Disaster Capitalism
The Unconquerable World: Power, Nonviolence, and the Will of the People
The leadership of civilization building: Administrative and civilization theory, symbolic dialogue, and citizen skills for the 21st century
Plan B 3.0: Mobilizing to Save Civilization, Third Edition

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Picking through the preconceptions

When it comes to problems afflicting the third world, there are a lot of popular misconceptions and misunderstandings as to what is necessary. In this fantastic book, Paul Collier runs through the myths and the realities of the situation.

Some of the most popular misconceptions regarding the third world is regarding the use of aid. Although Collier acknowledges that aid has it's uses, it is most certainly not a miracle cure all. As well as making local goods less competitive it will also increase the likelyhood of a coup d'état in an underdeveloped nation as rebel groups see aid money as a potential reward for overthrowing the government.

The argument for fair trade is also skillfully and intelligently undermined (althought this may not make pleasant reading for some of those involved in this campaign). Collier's studies have determined that despite the superficial benefits, fair trade only encourages third world economies to continue producing nothing but the same product all the time. This robs these economies of the diversity of exports that is so crucial to their growth.

Collier points out that there is no greater trap for bottomo billion countries than the conflict trap. Indeed about 50% of the wars that start in bottom billion countries are relapses into old wars. Here Collier offers a well thought out break from conventional wisdom. Usually all post-war aid is dumped into a country in the two or three years immediately following the conflict. However these years are typically the most disorganised and are most prone to wasted expenditure. The wasted expenditure and resultant poverty can often plunge the country back into war. Collier convincingly argues two solutions, one popular, one unpopular. The extension of aid to ten years after a conflict will be a popular idea and clearly a relatively effective one. However his suggestion of military intervention is likely to be less popular. We must not let Iraq blind us in this respect. The U.N. has done and continues to do effective work in this sphere and perhaps this will help the bottom billion citizens on the road to development.

Ultimately it was very difficult for Paul Collier to anatomise all the problems of the bottom billion in an individual book and it is equally difficult to anatomise his book in this review. All that I must really say is that it is a fantastic and well thouoght out read and enthralling for anyone with an interest in economics and politics.

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fate of a billion

The problem which this book confronts is that a number of countries around the world are "falling behind and falling apart," exposing a billion or so people to life on the margins of misery and despair. The author identifies four traps behind the failure of these countries: conflicts, landlockedness, the natural resource curse, and bad governance. A large chunk of the book describes the traps and the conventional istruments like aid, military intervention, law and order, and trade policies, which policy-makers have used to reverse the marginalization of the countries concerned.

Paul Collier, given his background and all that, is the right person for the job; only solutions to traps are tougher to come by than the identification of the traps. However, it is nice to see admittance (recognition) that good policy ultimately calls for the focused study of individual countries. In that respect the wiggling room is quite narrow indeed, not all countries are in exactly the same set of traps. Moreover, half of the traps are what Collier himself has called destinies, somewhere else in his other writings. Not all the destinies are easily changeable; how do we change a country being landlocked, for instance? Regional integration is one possible solution, but it also appears that as economies converge, conflicts between them intensify.

This is a very good book; it will most likely influence policy for better or worse. Five-stars!

Amavilah, Author
Modeling Determinants of Income in Embedded Economies
ISBN: 1600210465

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Politicizing the Poor

It's hard not to be delighted by this marvelous book. The author does an excellent job sorting through the complexities of economic data to explain why the rising tide of the world's economy is leaving roughly one billion of the world's population, most of them in Africa, mired in what seems to be perpetual misery and poverty. Some of his conclusions are obvious, that being landlocked in a region with poor transportation hurts. Some of it is less obvious, that having a valuable mineral to be extracted may prevent a country from developing other and perhaps more stable sources of export income. We would think that one source of income, say oil or gold, could be used to jump start an economy in other areas.

I do feel, however, that as an economist, he may not fully appreciate the other human factors in national success or failure, particularly non-economic ones when people are driven by obsessions with power and irrational hatreds. Two examples come to mind.

One happened recently to me when I saw someone I work with, an exceptionally kind, soft-spoken and decent man who's from East Africa, carrying a copy of Time magazine that featured Putin as "Man of the Year." When I told him that I saw that as dreadful, that Putin was a thug, he surprised me by disagreeing. Putin, he said, was a "strong man," obviously equating that to being a good leader. Pondering his reasoning, I realized that if the people in a nation lack self-control, if there's no culturally or religiously developed moral standards that keep ethnic or tribal hatreds from spiraling out of control, then a strong man who crushes everyone beneath his boots may seem a welcome relief. But a solution like that never gets rid of the problem. To rule, such a strong man often practices 'divide and conquer,' feeding anger and hatred, in an effort to feel in control. But once trapped in that cycle of hatred requiring dictatorial rule which then feeds hatred, a nation may never escape.

Nor is that pathology confined to impoverished countries. You can find it even in relatively affluent communities in this country. Pastors of virtually all-black churches have reason to fear that their considerable power in the black community will be threatened as their members find fewer and fewer differences between themselves and their white neighbors and co-workers and begin to join churches that are less multi-racial than simply places where race has become irrelevant--as in now is between Caucasians and Asians in Seattle where I live. You've seen the result of that recently in the news. Black pastors, like the Rev. Wright, whose church Obama attends, have to feed racial hatreds, branding all whites as evil and untrustworty and promoting conspiracies as weird as those of anti-Semitism, to retain their role as the "strong man" in the black community. Their power creates and feeds off hatred.

Second, because the author is so well-intentioned himself, when he discusses in Chapter 8 the role of outside military invention in countries torn by war or ethnic violence, he doesn't seem to realize that, particularly in the U.S., foreign policies have domestic implications. For several decades a major slice of the American left has demonstrated an unwillingness to support any sort of agenda that portrays a foe of the left, usually anti-communists, the Republicans, the religious and political conservatives, in a favorable light. That attitude first began with opposition to the Vietnam War. The flight of some two-million Vietnamese from South Vietnam after the US pulled out and the genocide of Pol Pot made no change in the attitude of the anti-war left because that attitude was never motivated by any concern for the Vietnamese people. Combine that deep indifference to human suffering with a willingness to engage in vicious lying and a press that seems incapable of seeing what is happening, and you have a terrible mess.

I saw that attitude myself as a grad student at the University of Washington in the early 1980s. The left on campus was simply incapable of seeing Reagan as anything but the personification of evil. And, as with Rev. Wright, with a major political group seeing everything in light of its own power and willing to slander anyone who gets in the way of that power, it's almost impossible to talk, as the author does so well, about developing sensible policies. The very success of those policies in the hands of a Republican will drive them into irrational rage. To give but one example, in the US the left hates Bush so much, that they obviously don't care what happens to the Iraqi people, all they want to see happen is for Bush to fail. In such a context, the author's hopes for well-executed military inventions in troubled countries are doomed to failure, particularly in the hands of Presidents who are less persistent in the face of criticism than Bush has been over Iraqi.

Much the same can be said about Bush's efforts to provide Africa with economic assistance. Over the short term, those programs may have benefited from their low profile. Attention directed at any success they might have would have triggered nasty attacks by a left in this country that is growing increasing unhinged. But not drawing attention to those success has a downside, it leaves those programs in danger when the Presidency passes to someone else in 2009.

In short, much of the good sense in this book is threatened by the irrationalities and hatreds of domestic politics both here and in Europe.

--Michael W. Perry, editor of Chesterton on War and Peace: Battling the Ideas and Movements that Led to Nazism and World War II

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A middle path?

Every year, the Council on Foreign Relations picks two books for discussion among its members across the nation. This past autumn, Paul Collier's "The Bottom Billion" was selected. I'm glad it was; otherwise, I would never have picked this book up and would have missed out on a compelling, if not necessarily inspiring, read.

To begin with, Collier's work needs to be placed in proper context. The international development community is currently engaged in a rather fierce debate, which was one of the many things that I learned while reading "The Bottom Billion." On the left, there is celebrity economist Jeffery Sachs of Columbia University and his recent book, "The End of Poverty: Economic Possibilities for Our Time," which paints an optimistic picture of just how much and how relatively quickly international aid can work to ameliorate poverty around the globe. On the right sits NYU economist William Easterly and his anti-Sachs book "The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good." In his book, Easterly lampoons the West's misguided efforts to alleviate suffering around the world from their cozy offices on H Street and Morningside Heights. Collier quite consciously puts his arguments forward as a middle path between Sachs' Pollyanna vision on the constructive impact of international aid and Easterly's depressing view of the Third World as a hopeless basket case.

Within the development community, it has become fashionable to ascribe failure to achieve economic growth to a certain set of "traps," and Collier, an Oxford economist who has devoted his professional career to studying African economies, puts forth four specific traps of his own: 1) civil war; 2) natural resources; 3) landlocked with bad neighbors; and 4) poor governance. It is important to note that Collier specifically rejects any notion of "African exceptionalism" (i.e. Africa is a mess for a set of reasons unique to Africa) and stresses that the aforementioned traps apply to countries outside of Africa, specifically those in Central Asia and some isolated cases in the Caribbean, South America and South East Asia. That said, let's not kid anyone: this is a book about Africa and determining how the developed world can most effectively rescue nearly 800 million Africans from the horror of living on the precipice of starvation. Thus the term "bottom billion." Collier notes that the development community focuses on the six billion people living in the developing world, which includes such economic development stars as India, China, and Brazil, whereas they should be squarely focused on the bottom billion who reside in such backwaters as Central African Republic or Burkina Faso. Indeed, although Collier never claims this in his work, it seems to me that the author's arguments suggest that the bottom billion should be further triaged. Some countries, like CAR and Burkina Faso, which fall into the most pathetic of Collier's traps - landlocked with bad neighbors - are essentially beyond saving. Just as corpsman on the battlefield have the unenviable job of putting certain casualty cases off to the side so they can work on those that can actually be saved, it seems to me that the thrust of Collier's work is that the development community should focus on the top half of the bottom billion; countries that suffer mainly from poor governance and/or suffer from the Dutch Disease caused by dependence on oil or diamonds in their economy, and which have the greatest opportunity to achieve sustainable economic growth with the proper type and level of outside assistance.

More than anything else, I was depressed by Collier's take on globalization and what it means for sub-Saharan Africa. In short, he argues that the bottom billion missed the boat on globalization and the opportunity to establish competitive positions in low cost manufacturing. Instead, the continent remains mired in natural resource dependency or commodity mineral/or agricultural production. Collier sees factories that produce widgets for the West as the ideal path to sustainable, stable growth. And now that East Asia has effectively captured that market, there is no incentive for western manufacturers to move operations to Africa where the wage differential is minimal and the political risk is extreme. In one of Collier's many memorable phrases: "Economic growth is not a cure all, but lack of growth is a kill all." Without large scale, low cost manufacturing, Collier seems to suggest that the most vulnerable African economies will continue to cling to 1 per cent GDP growth, which tends to be fueled mainly by aid initiatives and results in its own form of Dutch Disease.

This leads to the final, notably depressing aspect of Collier's arguments: those in the development "biz" and "buzz" are fundamentally part of the problem. Collier spent some time in a senior leadership position at the World Bank, so he presumable knows what he is talking about. He writes that development professionals are rewarded for allocating funds and not taking risks. Meanwhile, the Bonos and Angelina Jolies of the world pour energy and attention to well-meaning but completely ineffective efforts like building schools for girls where there is no hope to gain employment after graduation. Meanwhile, in Collier's view, idealistic non-governmental organizations often serve as "useful idiots" for the knuckle-dragging anti-globalization movement, which views Collier's greatest, long-term development hope, low cost manufacturing, as purely exploitative to developing economies (the large British NGO "Christian Aid" comes in for a particularly withering assault by Collier on this topic). While World Bank and IMF officials engage in bureaucratic turf battles and distribute aid in the most parochial manner, rock stars shine a spotlight on photo-ops with little long term economic benefit, and NGOs contribute to the stereo-type of capitalism as something diabolic, the African leaders themselves sit back and actively thwart any attempts to instill meaningful reform so as to preserve their powerbase, which is inevitably build on graft and corruption. There are no heroes in "The Bottom Billion," that is for sure.

So what can be done about? Collier lays out a litany of international charters and norms that should be established, which all sound reasonable and plausible to implement, but hardly give one much hope for significant change any time soon. Perhaps that is the point of this book. The situation is really deplorable in sub-Saharan African - in fact, staggeringly so. The vast majority of the international development players and indigenous leaders are a fundamental part of the problem. The best hope for real improvement was lost when East Asia decisively captured the low cost manufacturing opportunity that was presented with globalization. In the end, Collier doesn't offer a middle path between Sachs and Easterly. Rather, he makes Easterly's point more humanely and persuasively, while holding out a few threads of hope on which one might close their eyes, make a wish, and pull.

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reviews: 1, 2, page 3, 4, 5, 6, 7, 8, 9

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