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

The objective of development has to be elevated above the level of the development ministry. Because four different branches of government need to be coordinated, the only level of government likely to be effective is the top. The head of government has to accept development as the bottom billion as a personal priority. Obviously I do not mean tat this should be the main priority, for that is unrealistic.

This book is an attempt to shift thinking; it is written to be read, and so I have kept clear of footnotes and the rest of the usual grim apparatus of professional scholarship. I have tried to write something that you can enjoy reading. But don?t let that lead you to conclude that what I have to say is just a load of froth. Underpinning the book are a mass of technical papers published in professional journals and subjected to blind refereeing.

We need an alliance between the NGOs and the OECD, which is the bureaucracy for intergovernmental coordination.

The obvious agency to do this would be the World Bank or the IMF, as either of these has the expertise and does not stand to gain from falsification.

This chapter is written for people who cannot imagine that it is better for half a million Rwandans to have died than for eighteen Americans to be sacrificed.

What can be done to increase growth spillovers from neighbors? Cross-border trade is primarily a matter of transport infrastructure and trade.

The payoff came out at around $15 billion, and the cost of maximal technical assistance sustained for four years is only around $1 billion. So donors were in fact missing a really good opportunity for aid: spend $1 for an expected return of $15. And don?t forget that the only benefits counted in that $100 billion are to the neighborhood; the additional security that spills over to the wider world is a bonus.

To be clear, I do not want these authorities everywhere in the bottom billion. I want them to be an option in the worst settings, where the realistic prospect is that otherwise we are going to wait a long time for significant change.

What else makes a country prone to civil war? Well, slow growth, or worse, stagnation or decline. As an approximation, a typical low-income country faces a chance of civil war of about 14 percent in any five-year period. Each percentage point added to the growth rate knocks off a percentage point from this risk.

The politically correct answer to the need for technical assistance is to support ?capacity building? instead: that means train the locals rather than fly in the experts. There is a lot of sense in capacity building, but there is also a chicken-and-egg problem. Until the country has an international standard, and if there are no prospects, then they use their credentials as a passport out of the country.

To be effective, an external presence requires troops with a mandate to fight to preserve the peace, as well as contributing governments willing to accept casualties. In return for this external security guarantee, the post-conflict government should be required to radically downsize its own army. It has to learn to rule by consent rather than oppression.

When I settled into discussions with the government, I asked them a question that I always ask when advising a government, because it forces people to get concrete and also serves as a measure of ambition: which country did they wish to be like in twenty years? time?

The problem of the bottom billion is serious, but it is fixable. It is much less daunting than the dramatic problems that were overcome in the twentieth century: disease, fascism, and communism.

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.

Aid, however, is not the only answer to the problems of the bottom billion. In recent years it has probably been overemphasized, partly because it is the easiest thing for the Western world to do and partly because it fits so comfortably into a moral universe organized around the principles of sin and expiation. That overemphasis, which comes from the left, has produced a predictable backlash from the right. Aid does have serious problems, and more especially serious limitations. Alone it will not be sufficient to turn the societies of the bottom billion around. But it is part of the solution rather than part of the problem. The challenge is to complement it with other actions.

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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