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

An oil field in a developed country is auctioned off in a transparent process. This should be a basic requirement of an international charter on resource extraction.

Even to distinguish between technical assistance and money to governments was difficult because the donor agencies just have not been bothered to record their activities properly.

In 2005 the rules were changed so that extra money now lasts for seven years, a much more reasonable time frame.

Many of the banners at political demonstrations are in English, demonstrating that we are part of the intended audience for these protests. Hence, our message matters, but to date the message has been concerned nearly exclusively with elections. Checks and balances are continuous and complex ? they are not events ? and so they have been much less newsworthy. The mature democracies now need to use our evident influence to encourage the less visible aspects of democracy.

Politicians would only move beyond gestures once there was a critical mass of informed citizens.

Suppose a country starts its independence with the three economic characteristics that globally make a country prone to civil war: low income, slow growth, and dependence upon primary commodity exports. It is playing Russian roulette. That is not just an idle metaphor: the risk that a country in the bottom billion falls into civil war in any five-year period is nearly one in six, the same risk facing a player of Russian roulette.

The consequences for Somalia were miserable: more than twelve years later it still has no functioning national government. By 1995 around 300,000 people had died, and beyond that there are no estimates of the deaths from continuing conflict and the failure of health systems. But the biggest killer consequent upon the withdrawal was not what happened in Somalia but the lesson that was learned: never intervene.

A focus on results can very easily encourage people to avoid failures at all costs. And if this happens aid will increasingly be directed to the safe option of countries where performance is already satisfactory. To its credit the British government has understood this problem and provided the World Bank with the money to launch a fund that can be used to support the turnarounds. Will other governments put money into this fund? To my mind that is one of the critical steps for aid in the next couple of years. If you want your children to grow up in a world with fewer failing states, one of the practical things you can do about it is to urge your government to back this sort of aid finance.

And so a miserable but possible scenario is that countries in the bottom billion oscillate between the traps and limbo, perhaps switching in the process from one trap to another..

Forty percent of all post-conflict situations, historically, have reverted back to conflict within a decade.

In order to break into global markets for manufactures it is necessary to get over a threshold of cost-competitiveness. If only a country can get over the threshold, it enjoys virtually infinite possibilities of expansion: if the first firm is profitable, so are its imitators. This expansion creates jobs, especially for youth. Admittedly, the jobs are far from wonderful, but they are an improvement on the drudgery and boredom of a small farm, or of hanging around on a street corner trying to sell cigarettes. As jobs become plentiful they provide a degree of economic security not just for the people who get them but for the families behind the workers. And gradually, as jobs expand, the labor markets tightens and wages start to rise.

More aid means less need for exports and so exporters earn less. The mechanism that generates this effect is the exchange rate: aid appreciates the exchanges rate, making a dollar earned by an exporter worth less in terms of local currency. Exporters get squeezed as a result, and some go out of business.

Politics is full of idiosyncrasies, and from time to time reform-minded ministers and presidents come to power. But it is very difficult for them to implement change because they inherit a civil service that is an obstacle rather than an instrument. It is hostile to change because individual civil servants profit from the tangled mess of regulations and expenditures over which they preside. Aid has a potential role of providing the skills that the civil service lacks when they are most needed.

Surprisingly frequently, a hypothesized root cause turns out to be predictable if you already know the hobbyhorse of the speaker.

The cost-benefit analysis of aid for security looks very different in post-conflict situations. In these situations the security benefits alone are more than enough to justify a large aid program. Recall that these are the times of highest risk ? around half of all civil wars are post-conflict situations gone wrong. Aid happens to be particularly effective in raising the growth rate in these situations. This is hardly surprising ? this is how aid got started. The World Bank was originally called the International Bank for Reconstruction and Development, and in fact the ?and Development? bit was literally an add-on. Aid was invented to rebuild Europe after the Second World War. It worked. In more recent times the mistake with aid to post-conflict situations has been that it has been too little and too soon. Yes, too soon. The peace settlements hit the media and the politicians hit their checkbooks. Aid floods in during the first couple of years, then rapidly dries up. Yet the typical post-conflict country starts with truly terrible governance, institutions, and policies. It takes some time to improve them to a level at which aid can be of much use. So big aid needs to be sustained during the first decade post-conflict, not just the first couple of years. To their credit, the donors are learning.

A head of government should not be leading an aid campaign; rather, he or she should be forcing policy coordination across the government.

Another dysfunctional aspect of rich-country trade policy is tariff escalation: the tariffs on processed materials are higher than on the unprocessed materials. This makes it harder for the countries of the bottom billion to diversify their exports by processing their raw materials before exporting them. It hurts us and impedes the development of countries that are already facing enough impediments.

Generally, I do not much care for rich-country wallowing in guilt over development. I find it contrived, and it diverts attention from a practical agenda. Citizens of the rich world are not to blame for most of the problems of the bottom billion; poverty is simply the default option when economies malfunction. However, I am now going to pin some blame on citizens of the rich world, who must take responsibility for their own ignorance about trade policy and for its consequences.

In post-conflict situations we don?t just need ?Doctors Without Borders?, we need ?Bricklayers Without Borders?.

Most conduct is guided by norms rather than by laws. Norms are voluntary and are effective because they are enforced by peer pressure.

Poverty is not intrinsically a trap; otherwise we would all still be poor.

Te idea next surfaced in a process known as the African Peer Review Mechanism, whereby African countries volunteer for self-evaluation, modeled on the OECD. It is also useful within countries, as local governments can be compared against each other and ranked. Public agencies hate such rankings because they generate very effective pressure, both from the humiliation within a peer group and from the anger of users.

The critical changes in trade policy... are politically difficult not because they threaten interests (they don't) but because they do not fit into any of the current slogans and so don't make it onto the agenda.

A large improvement is not enough; it must be sustained. We decided to define ?sustained? as being at least five years. Had we chosen a very long period of sustained improvement, we would have excluded situations such as in Indonesia. The improvement in Indonesia began in 1967 and was broadly sustained until the collapse associated with the Asian financial crisis of 1998.

Astonishingly, he found that people with a sense of grievance were no more likely to take part in violent protest than those who were not aggrieved. So what characteristics did make people more likely to engage in political violence? Well, the three big ones were being young, being uneducated, and being without dependents. Try as one might, it is difficult to reconcile these characteristics of recruitment with an image of a vanguard of fighters for social justice.

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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