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

Dependence upon primary commodity exports ? oil, diamonds, and the like ? substantially increases the risk of civil war.

If Western consumers force the big-brand oil companies to adopt international standards, then in turn the oil companies will pressure their governments ? the United States, Britain, and France ? to come to an arrangement with China. The West has to offer China greater inclusion in power in return for adherence to international standards. It has to be made in China?s interests for the bottom billion to develop rather than to fall apart.

It would help if there was some international minimum standard, analogous to the minimum standards set out by the European Union. I would start with rules about the media, which are the most effective form of scrutiny.

Our conclusion was that some aid does indeed leak into military spending, but surprisingly little ? our best estimate is about 11 percent. This is not negligible, but on the basis of this it would be grossly unfair to claim that aid is wasted. Nevertheless, in those bottom-billion societies that get a lot of aid, even 11 percent of it adds up to quite a lot of the military budget. We estimated that something around 40 percent of Africa?s military spending is inadvertently financed by aid.

Step three is to make all payments of revenue transparent. This has been the focus of the Extractive Industries Transparency Initiative.

The bottom billion has missed the economic boat?- and to make ?turnaround?, he provides three ways to escape out of poverty trap.

All the people living in the countries of the bottom billion have been in one or another of the traps that I have described in the preceding four chapters. Seventy-three percent of them have been through civil war, 29 percent of them are in countries dominated by the politics of natural resource revenues, 30 percent are landlocked, resource-scarce, and in a bad neighborhood, and 76 percent have been through a prolonged period of bad governance and poor economic policies.

Does an election produce an accountable and legitimate government? What an election produces is a winner and a loser. And the loser is unreconciled.

If you combine a number of poor, slow-growing individual economies, you have a poor, slow-growing regional economy. Trade is really generated by differences, and the big opportunity for low-income countries is to trade with rich countries, harnessing the advantage of their cheap labor. Within a group of poor countries there simply are not sufficient differences to generate much trade. Worse, the differences that do exist between poor countries will get reinforced rather than reduced. The model of the European Community is unfortunately deeply misleading.

Launching a turnaround takes courage. I cannot measure that and so it is not going to be included in my analysis, but behind the moments of change there are always a few people within these societies who have decided to try to make a difference.

Our published results indicate that high military spending in post-conflict situations is part of the problem, not part of the solution.

Strategy 4: Become a Haven for the Region. Many business services are regionally traded rather than globally traded ? for example, some financial services. Often these services depend upon a good policy environment. If one country in a region manages to set policies clearly superior to those of its neighbors, it will attract these services and export them around the region.

The bottom billion will have to wait a long time until development in Asia creates a wage gap with the bottom billion similar to the massive gap that prevailed between Asia and the rich world around 1980.

Among the companies that pay the bribes two sectors seem to stand out: resource extraction and construction.

Elections determine who is in power, but they do not determine how power is used.

If you want to understand why some countries of the former Soviet Union have done well while others are becoming failing states, a pretty good guide is geography. The further away from the EU and so the less credible the prospect of US membership, the worse they have done.

Let me be clear: we cannot rescue them. The societies of the bottom billion can only be rescued from within. In every society of the bottom billion there are people working for change, but usually they are defeated by the powerful internal forces stacked against them. We should be helping the heroes. So far, our efforts have been paltry: through inertia, ignorance, and incompetence, we have stood by and watched them lose.

Over the next two decades the true nature of the problem is going to become apparent, however, because the countries that are trapped in stagnation or decline are now pretty well the poorest. The average societies of the bottom billion now has an income only around one-fifth that of the typical person in the other developing countries, and the gap will just get worse with time.

Strategy 6: Encourage Remittances. A further constraint upon rural development is the subsidies that are paid to farmers in Europe, Japan, and the United States.

The Bottom Billion: Why the poorest countries are failing and what can be done about it.

An election campaign costs around four times as much there as it does in the United States, despite Russia?s income being only about a tenth of that in America. In relative terms this is forty times the U.S. level of spending. And look at Nigeria. Never mind the presidential campaign there ? just to get elected as a senator costs around half a million dollars. With spending like that, no wonder the politics is corrupt. To raise that sort of money candidates have to sell their houses, borrow, and beg, and then if they win they have just four years to recoup their investment.

Electorates tend to get the politicians they deserve.

In 1999 the OECD managed to organize the necessary coordination to escape this dilemma: an agreement among its member governments that they would all legislate to make bribery of a public official in a foreign country an offense.

Let me be clear: we cannot rescue them. These societies of the bottom billion can only be rescued from within.

Persuading everyone to behave decently to each other because the society is so fragile is a worthy goal, but it may be more straightforward just to make the societies less fragile, which means developing their economies.

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Collier, fully Sir Paul Collier
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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