Paul Collier, fully Sir Paul Collier

Collier, fully Sir Paul Collier

Professor of Economics and Public Policy at the Blavatnik School of Government, Director for the Centre for the Study of African Economies at the University of Oxford, Director of the Development Research Group of the World Bank

Author Quotes

Together with David Dollar, my colleague at the World Bank, I came up with the idea that aid should be allocated so as to lift as many people out of poverty as possible.

When I want to use a geographic label for them I describe them as ?Africa +,? with the + being places such as Haiti, Bolivia, the Central Asian countries, Laos, Cambodia, Yemen, Burma, and North Korea. They are either still in one of the traps or escaped too late.

The quiet life that bottom-billion firms have enjoyed has been paid for by ordinary people, who have faced prices inflated above world levels by protection. That is what protection means. The quiet life has shown up in the rate of productivity growth. In bottom-billion manufacturing the rate has been around zero, in contrast to the global trend of rapid progress.

Trade policy is the area of economics least well understood by the NGO world.

When we get the data appropriately averaged, what do we find? Those developing countries that are not part of the bottom billion ? the middle four billion ? have experienced rapid and accelerating growth in per capita income. Let?s take it decade by decade. During the 1970s they grew at 2.5 percent a year, hopeful but not remarkable. During the 1980s and 1990s their growth rate accelerated to 4 percent a year. During the first few years of the twenty-first century it accelerated again to over 4.5 percent. These growth rates may not sound sensational, but they are without precedent in history. They imply that children in these countries will grow up to have lives dramatically different from those of their parents. Even where people are still poor, these societies can be suffused with hope; time is on their side.

The shift away from infrastructure was also because there was growing pressure to spend aid on the photogenic social priorities ? health and education ? and on the increasingly sacred environmental goals (both of which got networks all to themselves at the World Bank).

Tumusiime-Mutebile [Ugandan finance secretary] decided to try a completely different approach: scrutiny from the bottom up. Each time the Ministry of Finance released money it informed the local media, and it also sent a poster to each school setting out what it should be getting. Tumusiime-Mutebile is a practical man who wanted to know if things were working, so three years later he repeated the tracking survey. Now, instead of only 20 percent getting through to the schools, 90 percent was getting through. In state-of-the-art statistical research that analyzed the experiment in detail, Reinikka and her colleague Jakob Svensson were able to demonstrate that the media had been decisive ? in this case reports in newspapers. So scrutiny turned 20 percent into 90 percent ? more effective than doubling aid and doubling it again.

Without an informed electorate, politicians will continue to use the bottom billion merely for photo opportunities, rather than promoting real transformation.

The statistical evidence generally suggests that aid is subject to what is called ?diminishing returns.

Unfortunately, it is not just about giving these countries our money. If it were, it would be relatively easy because there are not that many of them. With some important exceptions, aid does not work so well in these environments, at least as it has been provided in the past. Change in the societies at the very bottom must come predominantly from within; we cannot impose it on them.

Without radically higher private investment the reforming countries will not be able to reach middle-income status but will linger in limbo and risk falling back into one of the traps. By posing the problem as that of a grasping rich world imposing its rules on a weak poor world, the NGOs conjured up a satisfyingly simple moral struggle in which they could campaign. But it was a fantasy world that, sad to say, did a disservice to the very people the NGOs are passionately trying to help. It was the headless heart in action.

The important thing to remember, though, it that we?ve already discovered what happens when we stick our heads as deep in the sand as they will go: we get Rwanda. So we should intervene, but not necessarily everywhere. Sierra Leone rather than Iraq is the likely future of intervention opportunities in the bottom-billion countries. Look at the contrasts between the two situations. In Sierra Leone our forces were invited in by the government and hugely welcomed by the local population. In Sierra Leone we could not be accused of going in for the oil, as there wasn?t any. In Sierra Leone we did not have to worry about ?fixing what we broke,? for there was not much to break, and we ousted the RUF with minimal damage. In Sierra Leone we needed less than a thousand proper soldiers to achieve decisive military change. The differences seem obvious.

The suspicion of growth has inadvertently undermined genuinely strategic thinking.

Unfortunately, you simply can?t trust the rebel discourse of concern for social justice: what else do you expect them to say?

You are a citizen, and citizenship carries responsibilities.

The key obstacle to reforming aid is public opinion. The constituency for aid is suspicious of growth, and the constituency for growth is suspicious of aid.

The transport costs for a landlocked country depended upon how much its coastal neighbor had spent on transport infrastructure? Why is Uganda poor when Switzerland is rich? It is indeed partly that Switzerland?s access to the sea depends upon German and Italian infrastructure, whereas Uganda?s access to the sea depends upon Kenyan infrastructure. Which do you imagine is better? If you are landlocked with poor transport links to the coast that are beyond your control, it is very difficult to integrate into global markets for any product that requires a lot of transport, so forget manufacturing ? which to date has been the most reliable driver of rapid development.

Urbanization challenges provide an overview of what has been done so far by governments and their development partners. The work done so far is simply not enough. It is sad that many African cities still thrive on activities characterized on low productivity from the informal sector - thus, many urban dwellers are poorer than countryside dwellers.

The key obstacle to reforming aid is public opinion.. Public opinion drives them into the I care photo opportunities that dominate aid.

There are some indefensible aspects of OECD trade policy. The least defensible, from the perspective of both OECD citizens and people in developing countries, is probably the protection of agriculture. We waste our own money subsidizing the production of crops that then close off opportunities for people who have few alternatives.

Voting line by line on USAID?s budget, Congress has diverted spending so as to benefit particular American exporters, unrelated to African needs.

The lack of capital inflows is only half the story of why global capital markets are not working for the bottom billion. The other half is that their own capital flows out of them. Much of this is illegal, and so it is hidden. It is called capital flight.

There is a different way of getting to the answers, and it is statistical. This stands in contrast to the crude images that often provide us with what we think we know about the world. For rebellion, as an example, the image is often that of Che Guevara, ubiquitous in my generation as a poster on student walls. The poster did our thinking for us. Our notions about the problems of the poorest countries are saturated with such images: not just of noble rebels but of starving children, heartless businesses, crooked politicians. You are held prisoner by these images. While you are held prisoner, so are our politicians, because they do what you want. I am going to take you beyond images. Sometimes I am going to smash them. And my image smasher is statistical evidence.

We cannot make poverty history unless the countries of the bottom billion start to grow, and they will not grow by turning them into Cuba. Cuba is a stagnant, low-income, egalitarian country with good social services. If the bottom billion emulated Cuba, would this solve their problems? I think that the vast majority of the people living in the bottom billion ? and indeed in Cuba ? would see it as continued failure.

A charter for post-conflict situations could also usefully draw on the successful experiences of truth and reconciliation commissions.

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Professor of Economics and Public Policy at the Blavatnik School of Government, Director for the Centre for the Study of African Economies at the University of Oxford, Director of the Development Research Group of the World Bank