Catching up is about radically raising growth in the countries now at the bottom…This book sets out an [aid] agenda for the G8 that would be effective.
(The Bottom Billion, pages 12 and 13)

Sir Paul Collier, Commander of the British Empire (CBE) and Fellow of the British Academy (FBA) is a British development economist who is currently Professor of Economics and Public Policy in the Blavatnik School of Government in Oxford. He’s the author of nine books tackling big global issues like migration, refugees and the future of capitalism.

The Bottom Billion was his second book, written expressly to inform and advise politicians attending the 2007 G8 meeting in Germany, which is why the final chapter is titled ‘An agenda for action’ (pages 175 to 192).

Collier asserts that while a billion or so people live in developed countries, and 5 or so billion live in developing countries many of which have flourished in the 1980s and 90s, a hard core of impoverished people live in countries whose economies have stubbornly refused to grow, despite western aid, loans and advice. He reckons there are about 58 of these countries (p.7), home to 980 million people or, by the time we’re reading his book, over a billion (p.6). If everyone else is doing relatively OK then, if the G8’s ambition is to ‘abolish poverty’, it is to these 60 or so failing countries and ‘the bottom billion’ that attention needs to be focused.

To help do this Collier has developed the theory that these countries are being held back by a number of key development traps and these are what need to be addressed. Collier claims there are four of these:

1. The Conflict Trap

Contrary to received opinion, Collier thinks that civil wars do not correlate with rebel grievances, political repression, ethnic strife or colonial legacy. Instead he finds strong links to: low income, low growth and reliance on the export of primary commodities.

Civil wars last a long time: the average international war lasts six months, civil wars last at least ten times as long, and are likely to recur or break out again. This is because the longer a civil conflict drags on, the more deeply established the players become that profit from the conflict, making them harder and harder to end. Only about half the countries which resolve a civil war manage to go a decade without conflict breaking out again (p.27).

A typical civil war costs its country and its neighbours $64 billion. After civil wars conclude homicide rates generally increase as people inured to violence carry it out unilaterally.

It’s not just civil wars, coups are also correlated with low income and low growth (p.36).

2. The Natural Resources Trap

Countries that are rich in natural resources are paradoxically usually worse off than countries that are not, for a number of reasons:

• governments that rely on extractive resources (oil, gas, gold, diamonds, iron, copper) tend to become anti-democratic rentier states
• being home to abundant natural resources can lead to Dutch disease, where reliance on one resource leads to neglect of all other aspects of the economy, a failure to diversity and develop their economies which results, long term, in low or zero growth (p.39)
• because rentier governments make most of their income from (often corrupt) deals with western multinational corporations, they have little need for taxes from the general population, and so the taxation-with-representation model which underpins most western nations simply doesn’t apply; rich governments can afford to ignore their populations
• an accompaniment of responsible government is checks and balances; these tend to be absent in resource-rich, low growth countries
• in other words, resource-rich poor countries tend to evolve terrible governments of kleptocrats, Angola, Congo, Nigeria

3. Landlocked with Bad Neighbours

Around 30% of Africa’s population lives in landlocked, resources-scarce countries (p.57).

Countries with coastlines can trade with the world, while landlocked countries can only trade with their neighbours, and that depends on having decent transport infrastructure. Landlocked countries with poor infrastructure connections to their neighbours therefore have a limited market for their goods. And they may have bad i.e. predatory or unco-operative governments. What can a poor landlocked country do?

1. Increase neighbourhood growth spillovers
2. Improve neighbours’ economic policies
3. Improve coastal access
4. Become a haven for the region
5. Don’t be air-locked or e-locked
6. Encourage remittances
7. Create a transparent and investor-friendly environment for resource prospecting
8. Rural development – the single biggest problem is here is the subsidies the West and Japan pay their farmers
9. Try to attract aid

4. Bad Governance in a Small Country

The kind of terrible governance which has characterised so many African nations since independence can destroy an economy with alarming speed. Think of the ruination of Congo by Mobutu. It’s doubtful if economic growth anywhere can exceed 10%. But someone like Robert Mugabe can run his country into the ground in under a decade. The smaller the population, the less inertia there is to prevent ruinous plans.

This chapter is highly technical with Collier explaining and defining criteria he uses to create technical reports on, among other things, what he calls ‘failing states’ (p.68) then defining what ‘turnaround’ would mean and what ‘sustained’ would mean (at least five years’ improvement; p.70). All these chapters read like summaries of pretty technical academic papers because that’s often exactly what they are.

Their study showed that a country was more likely to achieve a sustained turnaround: 1) the larger its population 2) the better educated its population 3) if it had recently emerged from a civil war.

Disappointingly whether it was or wasn’t a democracy seemed immaterial.

Solutions

Let me clear: we cannot rescue them. The societies of the bottom billion can only be rescued from within. (p.96)

Each of these countries contains honest, educated people working for reform and improvement. Collier calls them ‘heroes’. We need to help these heroes by clearing away the obstacles to their work. At our end this will require:

1. aid ministries in Western countries to be given much more importance and money
2. aid policies to be better co-ordinated across all government departments
3. Western governments to work more closely together to produce a co-ordinated Western approach to making poverty history

But then he moves on to four specific areas of improvement, many of which easy to state but will require entrenched institutions such as aid agencies and government departments, to change established practices and assumptions. Each of them gets a chapter explaining in detail:

Aid To The Rescue

He marshals pretty sceptical arguments and data about aid, lots of stories of aid’s ineffectiveness, corruption, theft, the uselessness of aid agencies and so on. He says things are improving, which is what they always say. Above 16% of GDP aid stops being effective. There are numerous different types of foreign aid. He considers in particular aid as incentive, aid as skills and aid as reinforcement.

Aid agencies should be concentrated in the most difficult environments and accept more risk p.116 the sequence

Military Intervention

Despite the terrible reputation Western military intervention has acquired because of Iraq, Collier still believes it has a role to play in improving the lot of the Bottom Billion, in fact three roles: restoration of order, maintaining postconflict peace and preventing coups (p.124).

On the whole appropriate military interventions, such as the quick, cheap, effective British one in Sierra Leone, should be encouraged, especially to guarantee democratic governments against coups (so we should back military intervention in Niger).

If only the European Union was prepared to use the Rapid Reaction Force it has set up with such a fanfare it might be possible to ‘make coups history’ by intervening quickly and decisively to reverse them, certainly easier than ‘making poverty history’ (p.131).

External forces are needed to keep the peace in postconflict situations because high government spending on the military is associated with greater risk of war breaking out again. External forces will have to come in and keep the peace for at least 10 years (p.133).

Laws and Charters

International charters are needed to encourage good governance and provide examples. Collier proposes five:

1. A charter for natural resource revenues: a very persuasive call for international charters to set standards of transparency, especially in the extractive industries
2. A charter for democracy: ‘Elections determine who is in power, but they do not determine how power is used’ (p.147). Actual elections are the showbiz side of democracy but much more important is the introduction of democratic checks and balances into corrupt countries. This takes time, planning and support.
3. A charter for budget transparency: the story of Emmanuel Tumusiime-Mutebile and alerting the local media (p.150)
4. A charter for postconflict situations
5. A charter for investment

Trade Policy: Western trade policy needs to encourage free trade and give preferential access to exports from Bottom Billion countries

Academic disputes

The uninitiated might think that academics are paid to find answers to problems and establish the truth. But the academic world, now more than ever, puts academics under tremendous pressure to compete, to publish scads of papers and books, to continually come up with something new, in order to justify their tenure and their research grants. And the best way to do this is not to come up with solutions but to continually problematise issues, finding new things to disagree about.

Hence why in History each new historian has to establish their reputation by rubbishing everyone who came before them and claiming to have found the real reason why X happened, or for the first time the true story can be told, or, in one of the clichés of our time, to be giving voices to the previously unheard, overlooked, suppressed etc.

Hence why in Literary Studies, every single work of literature from the last two and a half thousand years has to be reread and reinterpreted in light of the newish frameworks of feminism and race, post-colonial studies and, the newest kid on the block, queer studies.

Which is why second-wave feminism of the 1960s (white, horribly middle-class) had to be refuted by the 1990s generation of third-wave feminists, who claimed to be reclaiming feminism for non-white and working class people. Who were themselves supplanted around 2009 by fourth-wave feminists, who make much more agile use of digital technology i.e. social media, while insisting all previous feminism didn’t take into account modern ideas of gender fluidity.

• The four waves of feminism

And so it goes on, wave after wave of thinkers claiming that their new interpretation is the right one, the revelation, the radical new discovery – until the next wave comes along and proves it wasn’t inclusive or diverse enough. Same in the language arts, the performing arts, the visual arts: in all the humanities academia is a kind of machine for generating ever-new waves of ideology and discourse.

Academic disputes in the aid sector

Anyway, when we come to Development Economics, to the world of development aid and foreign aid and aid policy, exactly the same thing applies. This is that, instead of there being broad agreement about what needs to be done, there is, instead, a surprising amount of disagreement about what should be done.

Why? Because academics are paid to disagree; they make their names and careers by rebutting, disputing and overthrowing previously accepted nostrums, the old ideas which have so signally failed, proposing new solutions based on new evidence, new studies etc etc.

And this lack of disagreement is, of course, notoriously endemic in the field of economics which, unlike art criticism or literary theory, directly affects the fate of nations and the wellbeing or otherwise of hundreds of millions of people who suffer the consequences of economists’ bickering and misrule.

The American economist J.K. Galbraith was a fund of witty criticisms of his own field of study. ‘If you laid all the economists in the world in a straight line, head to toe, they still wouldn’t reach a conclusion’ was one of his gags, although his best one might be: ‘The only purpose of economic forecasting is to make astrology look respectable.’

Which is why, arguably, the most interesting part of Collier’s book is not the ostensible Key Points, outlined above, which could be conveyed in five or six PowerPoint slides. It’s the sidelights and sideswipes, in which Collier defends his position against his opponents in a range of debates I didn’t even know existed.

These shed light on the tangled undergrowth of development economic thinking and begin to explain why leaders of Western countries do not give it the prominence Collier, naturally enough, wants his field to have. Why would they, when the so-called experts can barely agree among themselves?

Academic disputes about ‘growth’

Take the simple idea of growth. What could be more uncontroversial than the idea that the world’s poorest nations need to grow their way out of poverty by developing their economies. And yet in a couple of pages, before his book has really got started (pages 11 and 12), Collier sketches out the profound disagreements development economist have about this.

He tells us that many non-governmental organisations (NGOs) are deeply unhappy with the entire concept of ‘growth’, presumably (although he isn’t explicit about this) because they associate it with unbridled capitalism, the Washington Consensus, the creation of a third world middle class and the ongoing abandonment of the poor.

This, he explains, is why nowadays organisations put adjectives before the word ‘growth’, things like ‘sustainable pro-poor growth’ to distinguish their kind of growth from naughty nasty capitalist growth (p.11).

Collier has no time for this. He enjoys telling us that while he was directing the World Bank’s Research Department (swank) the most controversial paper they published was titled ‘Growth Is Good For The Poor’. To you and me that might appear a pretty uncontroversial statement but NGOs’ hated it and the president of the World Bank rang up to express his concern.

What emerges is that Collier sees himself sitting in the middle of a spectrum of beliefs. To the left of him are often quite left-wing development charities which are ‘suspicious’ (p.11) of talk about growth because of its red-blooded, Thatcherite connotations. The ‘sustainable pro-poor’ guys. In the world of economic theory, the leading figure of this wing is American economist Jeffrey Sachs, a strong proponent of large-scale aid to the developing world.

To the right of Collier are the aid sceptics, right-wingers who think well-meaning foreign intervention often makes things worse. Countries have to sort themselves out and find their own way. The American economist William Easterly is, apparently, the leading figure on this wing, as the title of his book ‘The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good’ (2006), makes abundantly clear.

Easterly’s arguments are repeated and updated by someone like Dambisa Moyo and her 2010 book ‘Dead Aid: Why aid is not working and how there is another way for Africa’. Moyo is black and a woman so scores double on the diversity-counter and has been showered with praise by the worried white establishment (in 2022 she was awarded a life peerage, becoming Baroness Moyo of Knightsbridge). But, at the end of the day, she is yet one more American-educated development economist to enter the endless battlefield of development economics.

Anyway, amid all this argumentation, Collier is at pains to position himself in a nominal ‘centre’: definitely rejecting left-wing beliefs (he is scathing about anyone who offers Cuba as a model for other developing countries to follow) but at the same time rejecting the All Aid Is Bad school (p.191).

Early on he offers a common sense summary of what he’s aiming for, a goal he hopes everyone can rally round:

To my mind, development is about giving hope to ordinary people that their children will live in a society that has caught up with the rest of the world. (p.12)

Reading this book made me realise that feel-good sentiments like that are so common in this area, and drop so glibly from the lips of politicians, precisely because they don’t really say anything. Because as soon as you start to be more specific, the squabbling starts.

Supporting girls and women

This atmosphere of continual argument and debate in development economics explains why the debate has moved away from ‘growth’ (wrongly, in Colliers view) towards more ‘safe’ subjects. This, for example, explains why all the squabbling parties can be brought back together around uncontroversial rallying cries such as ‘helping girls and women in the developing world’.

Who could possibly disagree? Who would dare to disagree? It’s a worthy cause, of course, as Collier emphasises (p.11) but also one which papers over the yawning cracks which divide development economists. Framing the debate in terms of helping ‘vulnerable women’ and ‘supporting girls’ etc is all very admirable:

• Women’s health at risk from UK aid cuts, Foreign Office warned
• UK aid budget cuts are ‘death sentence’ for world’s most vulnerable children

But continues to evade the much harder discussion about the best way to provide foreign aid, or, as per Easterly and Moyo, whether the West should give aid at all.

Academic in tone

The Bottom Billion is very academic in tone, in the bad sense. Chapter 1 is about ‘conflict’, which you might have thought would be a big juicy topic. Instead Collier focuses in on the minutiae of a research paper he did with one of his graduate students, Anke Hoeffler.

He explains that they decided to take a very narrow approach and see if they could measure whether the outbreak of civil wars was related to income and GDP. They were quickly presented with the problem of how to define a civil war so, he explains, they adopted the definition of ‘civil war’ developed by scholars at the University of Michigan, which is an expert in this field.

Then, of course, there are problems with getting reliable data about GDP, average income and so on from the poorest countries which are, by definition, often in a state of chaos.

And then he complains that some fellow academics objected to this entire data-driven analysis. These critics come from the left, from ‘the politicised end of the academic world’ (p.19), who Collier has taken the time to criticise half a dozen times by just page 19.

Not all theorists of civil war have based their work on empirical data. Some social scientists, particularly the most politically engaged, know what they want to see in civil war and duly see it. (p.20)

See what I mean by ‘academic’?

1) Instead of treating the subject in a broad and insightful way, he is instead effectively summarising one very specific paper he co-authored.

2) He tells you as much about fellow academics who objected to his approach as he does about the results.

3) And his summary is littered with snarky jibes against Western Marxists, left-wing NGOs, the politically correct media and so on, sarcastic asides which I quickly came to dislike.

(For example, Collier attributes the over-emphasis on the urgency of the West giving aid entirely to ‘the left’ and its narrative of atoning for the sins of colonialism, in what he considers a blinkered, moralistic view which actively hampers the kind of aid and support we can and ought to give, p.123.)

Economic statistics

As an economist Collier prides himself on eschewing historical, political or sociological explanations for poverty or war. The trouble is that, as he explains how he and his post-grad assistants beavered away to define the data and stats they needed to generate their conclusions, the more artificial and contingent they appear. By the time he gets to the conclusions he’s so proud of, I found them unconvincing and also weirdly irrelevant.

For example, after a lot of number crunching, he tells us that poor countries are more likely to see civil wars which we could have worked out for ourselves. But then that a typical low-income country faces a 14% risk of civil war in any given five-year period. Each percentage of economic growth knocks a percentage off the risk, so a country with a growth rate of 3% has a risk of civil war of 14% – 3% = 11%.

This is just the first of many mentions of projects his graduate students are working on or that he collaborated on with his peers. An awful lot of the book consists of summaries of research undertaken by Collier or his research students or colleagues (Lisa Chauvet, Anke Hoeffler, Stefan Dercon, Steve O’Connell, Catherine Pattillo, Jan Gunning, David Dollar, Tony Venables) and there is an appendix at the end devoted to just these research papers, titled ‘Research on which this book is based’.

Underpinning the book are a mass of technical papers published in professional journals. (Preface, p.xii)

Collier’s unique selling point is that, once he has defined his problem, he works with students and colleagues to find ways to try to apply measurable data to them. He shares his working out with us because that’s how a good academic operates. It allows others to critique his methodology or results with precision.

In addition, Collier explicitly states in his Preface that he goes into such detail about who he worked with and how they developed the concepts and definitions for their research because the book has an aim over and above framing issues and recommendations for development aid: it is to give us lay readers a sense of what it’s like to do development economics, a sense of the buzz you get from framing questions then figuring out ways to answer them:

Although this is not a book about research, I hope that along the way you will get some of the flavour of how modern research is done, and a sense of the thrill that comes from cracking intractable questions. (Preface, p.xiii)

But as well as often being pretty boring, it gives an unfortunate impression of being very, well, narrow. Instead of ranging across the whole field it reads more like the annual summary of research done by a particular department at a particular university. It feels oddly parochial.

Reasons not to be cheerful

For a guy who’s trying to come up with practical solutions, Collier shares a lot of very gloomy conclusions to his research.

– Assuming even an optimistic rate of economic growth, he estimates that ruined countries like the Congo will take something like fifty years to get back to the standard of living they enjoyed at independence in 1960.

– Resource-poor landlocked countries are going to be reliant on aid for a very, very long time. He is so pessimistic about their prospects that twice he says they should never really have been created as separate countries. Mali, Niger, Chad, Central African Republic – these countries are going to be dirt poor forever (p.107).

– Capital flight. He and his team researched long and hard to uncover the headline fact that in 1998, after decades of military rule, some $100 billion had been smuggled out of Africa by its elite and was held abroad, money which should, of course, have been used to invest in infrastructure, agriculture and so on, but had simply been stolen by its rulers. Instead of investing in their own countries, rich Africans invest their money abroad.

– Paralleling capital flight is human capital flight. Educated people leave poor countries because they have better life chances abroad. And the better your qualifications the more likely you can enter a Western country. And once one of you is in, you can bring other family members. Thus human flight disproportionately impacts the educated classes, which obviously keeps poor nations stuck in the poverty trap.

The countries of the bottom billion are already desperately short of qualified people and the situation is likely to get worse. (p.94)

– A really big reason for gloom is that his research shows that the main way to grow your economy is to attract inward commercial investment. The way to do that is to be a large country with political stability and a reasonably well educated workforce. These are the reasons why first China then India dragged themselves out of poverty in the 1990s and 2000s.

China in particular grew at an incredible rate partly because of what economists call ‘economies of agglomeration’ (p.82) meaning that you build up a well-enough educated workforce that can move easily between different firms or factories in the same sector. There are tens of thousands of foreign firms in China and tens of millions of workers educated and experienced enough to move between them.

Compare the economies of agglomeration in China with the bottom billion countries where a) there are few if any foreign firms and so b) an entire generation of workers with no experience of what is required to work in a foreign-owned factory or warehouse e.g. be clean, turn up on time day after day, literate enough to do the work, prepared to put in the hours.

So who wants to be the first Western investor to risk investing millions in a country with no educated workforce, no transport infrastructure, and corrupt rulers who are likely to overthrow each other in a chaos-creating coup at the drop of a hat? See the recent upset among the rulers of Sudan. Nobody.

Critiques

William Easterly’s criticism

William Easterly is another development economist but this time from the right-wing of the political spectrum and a deep-dyed aid sceptic. This explains why his most famous book is titled ‘The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good’ (2006) and explains why Easterly makes numerous criticisms of Collier. He starts by claiming that Collier’s strategy of attributing the poverty of the poorest countries to just four causes or ‘traps’ is completely inadequate. The world is much more complicated than that.

Easterly says Collier doesn’t take into account a number of other pretty obvious factors – such as the colonial legacy i.e. the template of the elite rule of land, resources and government which post-independence local rulers simply copied; or the disruptive impact of tribalism. He adds many others and develops his critique of Collier from there.

Lies, damned lies and statistics

All Collier’s conclusions derive from data and statistical analysis and the trouble with data and statistics is, notoriously, that you can make them mean anything you want to. Even an utterly honest, unbiased attempt to use data faces a host of problems which Collier, to give him his due, owns up to and describes in detail. These include:

• sourcing the data in the first place: it rarely presents itself clean and complete as you wish, but has to be hunted down, sought in different organisations, or formats, or with different taxonomies, or purposes so that you have to manipulate it, ‘clean’ it, repurpose it
• or it’s just not available and has to be guessed or ‘extrapolated’ from similar datasets elsewhere
• Collier repeatedly explains how they had to choose how to define concepts such as ‘success’, ‘turnaround’, even ‘civil war’ and ‘growth’; the more he does so, the more contingent and – not quite arbitrary, but – flaky many of his central premises come to seem

Collier, to his great credit, shows all his working out, but the more he explains, the more rickety and bodged together his working appears. I’m sure he and all his collaborators did the best possible job but his candour about the challenges they faced getting hold of and then working with the data on which his entire approach relies, slowly undermines your trust in many of his findings. And since the entire edifice is based on these findings, well…

Fifteen years later

History doesn’t stop, Time marches on. Has poverty been abolished? Have we made poverty history? Have we lifted the bottom billion out of poverty? No, no and no.

Also, ‘Events, dear boy’. Since this book was published in 2008 we’ve had the financial crash of 2008 leading to a decade of austerity, the huge political disruption caused by Brexit, the COVID lockdowns, and now the war in Ukraine. All good excuses for focusing our energies elsewhere.

I don’t know whether Collier’s recommendations were adopted by the G8 or the British government or the UN, but I doubt it and I doubt they ever will be. Look at the umpteen reports about climate change, overflowing with recommendations. Some policies are being implemented in Western and developing nations, but is it enough? No. The sample of reviews of the book I’ve read all say it was ‘very influential’ and it may well have changed a lot of thinking and speeches and papers and research and so on in the vast papermill and huge bureaucracy of the aid industry.

But were any of his policies actually implemented? It would be lovely if Collier wrote another book (or article) assessing the book 15 years on: telling us which policies, if any, were adopted, and by whom, and what difference they made, if any. Come on, Paul.

TED talk

Sir Paul gave a TED talk summarising his book:

Credit

The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It by Paul Collier was published as an Oxford University Press paperback in 2008.

Related link

• Wikipedia article
• Full text of The Bottom Billion
• Short summary of The Bottom Billion on the Revise Sociology website
• Institute of Development Studies assessment of The Bottom Billion

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