Are you troubled by the grinding poverty in the poorest countries? If so, this book will give you hope that something more can be done.
How can a global economy that routinely produces new billionaires leave a billion people behind in countries where the economic prospects are bleak despite enormous spending aimed at turning things around? Obviously, the remedy isn't working. You could have figured that out for yourself without reading this book.
Professor Paul Collier takes us beyond that disquieting simplification to measure what some of the reasons are that contribute to the stalled economies in those countries (which are mostly located in sub-Saharan Africa and central Asia) where a billion people live.
The primary factors that he can isolate include frequent armed conflicts (coups, civil wars, and wars with other countries), producing high value natural resources that can be easily exported, having no access to the oceans while being surrounded by neighboring countries having a lot of problems, and poorly performing government in a small country. Armed conflicts not only take a lot of lives and do a lot of damage; armed conflicts drive people into new areas creating enormous dislocations and increased disease. Armed conflicts interrupt the ability to run a farm, a business, or to have a normal life. High value exports encourage those in government to seek payoffs from the exports while the exports drive up the value of the currency making local businesses less competitive with imports. If you are surrounded by bad neighbors, you cannot do much exporting or importing so your economy is stuck where it is. A poorly performing government simply siphons off funds into corruption.
If a poor country overcomes these problems, it has new issue: There may not be a local size sufficient to compete with other low-cost labor markets in global exports.
Give a country too much aid of the wrong kind, and you make things worse. Excess infrastructure aid (a current favorite among developed countries) leads to corruption and more spending on the military (which increases the risk of armed conflicts). Military intervention is only cost effective if those who are the peace keepers are serious and the spending is low (unlike Iraq). Laws and charters can provide guidelines that can make the subsequent actions more appropriate. Appropriate trade policies can also help open markets for those from the poorest countries.
The book concludes with a call to action to shift development spending from the middle four billion to the bottom billion while increasing reliance on influences other than sending money for aid.
I appreciated having the chance to read this book and recommend it to those who want to know what can be done to help the poorest people. I would have learned more if Professor Collier had shared more details of his research, rather than just citations of his academic works. I was particularly interested in how strong these statistical patterns are. I was also curious about the multivariate effect of these factors in the past.
I have a lot of admiration for the hard work that goes into assembling data to do this kind of work and to then find ways to draw conclusions from the data that make sense. Bravo to Professor Collier and his colleagues!
At the same time, I would encourage serious readers to also look at the problem from the ground up . . . what educated people who live in these countries can do to make things better for the most impoverished. I am highly encouraged by the work that some of my students have done in identifying how small educational and capital inputs can generate enormous numbers of successful entrepreneurs who need employees. Many of these nations lack an educational infrastructure that can produce the skilled labor and business leadership needed for rapid economic growth. It looks to me like working on providing such advanced educational opportunities could be a great way to attack these persistent problems, as well.
This is one the best policy books that I have read and an example of what a good policy book should be all about. It deals with the subject that is often in public spotlight and yet it seems as intractable today as it was decades ago. This sad state of affairs may in at least part be attributed to some of the misunderstanding of what global poverty is all about, who is most affected by it, and what sort of traps those most affected find themselves incapable of escaping. As this book clearly argues, the so called "poverty trap" in and of itself is not a trap at all, since otherwise all World would still be as poor as a few centuries ago. Furthermore, vast segments of the "global poor" actually live in countries that are developing at a more or less steady pace and can expect to be lifted out of that poverty within a generation or two. The ones who seem stuck are the bottom billion of the world population, and this book deals with them. The research that this book is based on comes up with four basic traps that could permanently hinder the poorest countries in development. The traps, some of them counterintuitive, are:
1. The Conflict Trap
2. The Natural Resource Trap
3. Landlocked with Bad Neighbors
4. Bad Governance in a Small Country
Not every one of the poorest countries in the world is subject to all of these traps, but they are subject to at least one of them. Furthermore, Collier is not content to just describe the problem; he offers several courses of action that can deal with them. At least one of them, military interventions, has been largely discredited lately in the eyes of the public and policy wonks alike. However, if we are sincere and serious about helping the poorest in this world, we need to keep the military option open.
All in all, this is a wonderful book that is both data-driven and engaging. Even if you have not followed the issues surrounding global poverty in the past, this book may induce you to get engaged in thinking about it more actively and seriously.
on August 5, 2011
Professor Mitchell said 99% of what I was thinking when I read this book. I'll just add the following:
a) Collier writes without using economic jargon, and he relies as much as possible on hard data and as little as possible on ideology - real pluses in my view.
b) Once you've read Collier's book you may agree or disagree with his solutions, but you are guaranteed to know more about the issues, the arguments, and the pertinent data.
The pressure for the developed world to work toward real solutions to this crucial issue can only come from informed voters, so I would encourage any and all concerned readers to give this book a try.