Poverty in The Bottom Billion by Paul Collier

Table of Contents

Introduction
Development and Growth
The Four Traps
Suggestions for Poverty Alleviation
Conclusion
Reference

Introduction

Paul Colliers The Bottom Billion is an in-depth study of the worlds poorest countries financial plight. The book provides a detailed analysis of the incidence and the remedies to the issue. Collier was a professor of economics at Oxford University and served as an economist at the World Bank. The book provides empirical support to the problems faced by poor African countries and offers pragmatic solutions to solve these difficulties. Colliers approach shows that the rich, predominantly white countries have a myopic view of the African countries issues, and therefore, the solutions to alleviate these countries from poverty are flawed. For instance, Collier points out that the aids that the developed countries send to the African countries seldom reach the masses. Colliers central thesis is that foreign aid should be directed to the countries that have very low growth and are unable to handle their poverty problems. For instance, countries like India and China have robust growth, and therefore, Collier points out, are capable of taking care of their poor. However, many less developed countries of Central Asia and Africa that form the bottom billion do not have the resources to provide sufficient support.

Moreover, these developing countries are caught in four different poverty traps that worsen their situation. This book presents a unique understanding of global poverty, which has been declining for decades. However, poverty is concentrated in a few less developed countries. Collier points out how the incidence of poverty is intensified in these countries and what can be done to alleviate the problem.

Development and Growth

Collier believes that poverty in the bottom billion countries is weak economic growth and inadequate prescription to deal with it. The book argues that weak growth is the critical problem of development. The question that arises is if growth is a sufficient condition for the alleviation of poverty. The apparent answer is no. Higher growth may ensure development, but it does not automatically reduce poverty. Higher growth has to be supplemented with other social and economic measures to create different human development outcomes. In other words, public policy and governance play a vital role in the alleviation of poverty. Thus, the conditions for poverty alleviation change with place and time. Consequently, higher growth must be supported by public policy to enhance the intensity and quality of development. Collier supports this argument as he points out that growth is not a cure-all, but public policy can increase or decrease its effect on development (Collier, 2007, p. 190). However, he is quick to point out that growth may not be a sufficient condition for development, but it is necessary: Growth is not a cure-all, but lack of growth is a kill-all. (2007, p. 190).

This is why Collier asserts that countries with high growth rates, like India and China, are in a position to handle their poverty issues. These countries have utilized their large population to create labor-intensive industries. However, less developed countries in the bottom billion will not be able to ape these developing countries success story. Consequently, Collier believes that global financial aid should be focused on these countries (located primarily in central Asia and Africa). Thus, Collier reiterates Africas focus, like many other economists who feel that the developed countries must concentrate their developmental aids on African countries belonging to the bottom billion.

The Four Traps

Collier first highlights the traps that hinder mitigation of poverty in the bottom billion countries. According to Collier, the world is divided into three kinds of economies the affluent, the developing, and the desperately developing countries who form the bottom billion. The book is divided into five parts and four chapters. Collier shows how the poorest countries of the world are caught in a poverty trap. In explaining this, Collier points out that there are four kinds of traps found in the bottom billion countries (1) states that are trapped in civil wars, (2) greed and misusage of abundant natural resources, (3) landlocked countries that prevent global trade, and (4) bad governance. Collier believes that it is exceedingly difficult for the marginalized poor economies to escape from these traps. Collier believes that these four traps are responsible for the stagnation in the bottom billion countries.

There is little doubt that the four traps delineated by Collier are the leading causes of poverty stagnation in the bottom billion countries. However, the reasons cited by Collier in his analysis are not entirely flawless. For instance, Collier says that rebels who brew up a civil war are motivated by predation and not grievances. What can motivate a band of rebels to fight against the established government? Is it just the desire to loot and plunder? Can poverty lead them to give their lives willingly? One can loot to satiate hunger, but the zeal to fight must be for a cause.

Further, fight over resources, especially oil, has become a significant cause of civil war. However, the book ignores other plausible reasons for unrest in countries such as climate change and scarcity of drinking water. Climate change will affect the most impoverished countries the most, and the developed countries must join forces to ensure that the geographical challenges to poverty alleviation are enforced.

Suggestions for Poverty Alleviation

Collier prescribes the following methods for escaping these poverty traps (1) foreign aid, (2) military intervention, (3) international laws and treaties, and (4) global trade.

Collier points out that foreign aid can have a positive effect on the development of less developed countries. However, poverty cannot be alleviated with supporting policy to ensure reform. Collier seems hugely optimistic about the positive effect of foreign aid on poverty alleviation. Nevertheless, most economists do not share such optimism. They are less confident about the impact foreign aid has on poverty alleviation and believe that such aids are ineffective without favorable policies. Collier points out that foreign aid is an essential requirement for the bottom billion countries when it comes to alleviating poverty as these countries have a stagnated growth that gets trapped in the vicious circle of civil war. Collier believes technical assistance in post-war ridden countries helps to stabilize the country. However, this argument does not provide a clear solution, as it is unclear how the aid will help the bottom billion. As Collier himself points out, this solution is tricky that only a small percentage of the assistance given to an African nation was utilized for developmental activities. However, Collier argues that aid will reduce this problem, as it will attract private investment, which will trickle down to the bottom billion.

Military intervention is an essential means to stabilize the war-ridden states that are poor. Such nations have autocratic dictators and are usually torn by civil war. The lack of democracy and lack of security international military intervention is believed to change war. When political stability is reestablished in the countries, it can move back to the path of growth. Colliers assessment of military intervention is right as it can end security problems. However, the question that becomes apparent is how such interventions can resolve the issue? External military involvement can prevent such situations, but such measures viability to resolve an already critical issue is uncertain. Thus, Colliers assertion that intervention military intervention can alleviate the violent war-like situation in the less developed countries seems unrealistic. He does not consider the significant influence of the sovereignty in the regions and the effect the regional bodies have on the countrys political condition.

Collier believes that international laws and charters hinder the developmental process in bottom billion countries. He posits that the Northern and Southern practices hamper the ordinary course of development. He believes that the laws made by Northern states do not apply to these less developed countries. Collier points out that corruption money repatriated from the bottom billion countries is deposited in first-world countries banks. This poses a severe problem for the development of developing countries. Collier believes that international laws have to be made relevant to these countries. Collier explains his point with the help of the example of the Eastern European countries. He points out that these countries wanted to join the European Union after gaining freedom from the soviet bloc. However, these countries failed to gain entry as the EU regulations required the economies to become market democracies. However, this rule was relevant for the Eastern European countries as it was written for the Western European countries. Thus, Collier demonstrates the ineffectiveness of international laws. This argument seems appropriate as developed countries make most of the charters and laws with little appreciation of the regional and cultural variations. Therefore, the enforcement of these laws becomes very difficult. Thus, the laws must be fine-tuned to suit the requirement of the less developed countries.

Globalization and trade are other measures that Collier believes can alleviate poverty in the bottom billion countries. International export will expand the market for the products manufactured in these countries and increase employment and boost growth. However, Collier contradicts himself in this chapter, for at the very beginning of the book, he asserts that the bottom billion countries have been marginalized from the global economy. Hence, the developmental model of China or India cannot be applied to these countries. Undoubtedly, trade can be immensely practical for coastal states, but Collier forgets that most of the bottom billion countries are landlocked, which causes severe impediments to trade. Though the argument that the bottom billion countries must liberalize their economies to reap the benefit of trade is correct but international protection to the infant industry and special deals from World Trade Organization (WTO) are not adequately justified. This paves the course of a shallow integration that negates the path for deep integration. Therefore, the economies fail to integrate with the world economy and become more inward-looking if their trade flourishes with the help of aid. Thus, the effort should be to make a self-sustaining and competitive market that can compete in the open market.

Conclusion

Bottom Billion provides a certain potent understanding of the increasing incidence of poverty in the less developed countries and how it can be alleviated. Collier presents a clear understanding of the traps that are the leading cause of poverty and discontinuities. The analysis presented in the book helps the policymakers to understand the time and phasing of the policies formed. For instance, when the policy should be implemented, how much of the policy should be introduced, and how long. Further, the book is easy to understand as it has a smooth flow and explains certain developmental concepts such as narrow aid, debt, and trade effortlessly.

Further, the book presents the fact that different countries require a different model of poverty alleviation program. No two countries can have the same policy as the implementation and acceptance of the policy depends on the countrys cultural and socio-political condition. Last of all, the book is easy to read and understand. However, the book has certain drawbacks. It does not look at the effect of climate change on economic growth and poverty in the bottom billion countries.

Further, it provides no reference to a large number of poor living in India and China. Thus, it is unclear if the poverty alleviation suggestions offered in the book will be sufficient to alleviate poverty in these countries. Though this book provides an in-depth analysis of the causes of poverty in bottom billion states, it does not give a clear understanding of how poverty in developing countries like China and India can be eased.