The Bottom Billion: Why the Poorest Countries are Failing and What can be done about it Author: Paul Collier (Book Review by : Charles Abugre)

Publisher: Oxford University Press

ISBN:  978-0-19-531145-7

Book Review by Charles Abugre

The former head of development research at the World Bank and current Professor of Economics at Oxford University, sets out a broad agenda for the G8 to tackle the problems of the (unidentified) countries at the bottom of the development heap.

Using statistics to cut through persisting preconceptions, he analyses their problems as a series of “traps”-conflict, natural resources, landlocked, and bad governance-before setting out an agenda to solve them including aid, military intervention, legal reforms and trade.

There is much to be commended in the book-especially its accessible style and its quest to take a fresh and facts-based approach to old controversies. Unfortunately this does not always result in the unbiased analysis and objective solutions that the author (and the readers) are seeking. The importance of inequality, of geopolitics and of history in determining both problems and solutions, for example, is given little analytical space and the resulting policy advice is therefore skewed.

This is most evident in the chapter on trade-one of the most hotly contested topics in development circles.

During his time at the World Bank, the institution’s trade research was criticized as failing to take a balanced view of the evidence, and favouring research that suited its own policy agenda. In the Bottom Billion, this selectivity and bias is evident.

The trade chapter opens with a three page attack on Christian Aid and its campaign on trade justice as part of the Make Poverty History coalition. Nowhere is it acknowledged that many of the policies he prescribes are similar if not identical to those of the charity-reforming farm subsidies, ending mercantilist approaches to trade negotiations with poor countries and better market access for their exports.

Instead he criticizes Christian Aid, for being misled by Marxist advisors, on the basis of advertising slogans and an (inaccurate and) unflattering look at the credentials of its researchers and advisors. He does not go into the substance of the original debate that he and his colleagues, had with Christian Aid and its advisors, within the letters pages of the Financial Times.

In the research in question, Christian Aid estimated GDP losses for Africa in the 1980s and 1990s due to aggregate demand effects arising from trade deficits, resulting from trade liberalization of that period. The result that imports grew faster than exports, with a reduction in net demand for domestically produced goods and services, and national income is consistent with historical observations and other studies carried out by UNCTAD and the Carnegie Foundation, among others.

It is a result that is not palatable for those, like Collier, who favour liberalization as the only trade policy choice for developing countries, and who decry the use of selective, outward looking protectionism.

In Collier’s book, therefore, we find the usual warnings against rent-seeking protectionists, but no examination of its success stories, that range from the Japanese car industry to the dairy sector in India.

The politics of trade policy is also ignored. He does not explore the role of rich countries and his former employer, the World Bank, in imposing economic reforms on poor countries and in creating the problems they now face, in harnessing trade for development. This tradition of externally designed and driven solutions is one of the key changes that needs to happen before the prospects of the bottom billion can improve.

Contents

Preface

Part 1 What’s the Issue?

1. Falling Behind and Falling Apart: The Bottom Billion

Part 2 The Traps

2. The Conflict Trap

3. The Natural Resource Trap

4. Landlocked with Bad Neighbors

5. Bad Governance in a Small Country

Part 3 An Interlude: Globalization to the Rescue?

6. On Missing the Boat: The Marginalization of the Bottom Billion in the World Economy

Part 4 The Instruments

7. Aid to the Rescue?

8. Military Intervention

9. Laws and Charters

10. Trade Policy for Reversing Marginalization

About the Reviewer

Charles Abugre is the head of Global Advocacy and Policy, Christian Aid, London, UK.