The Bottom Billion

The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It

by Paul Collier, Oxford University Press, June 2007, 288p, $28.00

Reviewed by Edward Hadas

A version of this review appeared in the Times Literary Supplement, 24/8/07.

When Max Weber wrote The Protestant Ethic and the Spirit of Capitalism in 1905, industrial prosperity was scarcely found outside of Northern Europe and the United States. Weber identified a common factor in these rich nations which he called the “Protestant ethic” – a historically unprecedented social endorsement of hard work and thrift for the sake of material gain. Weber’s theological explanation was unpersuasive, but it addressed the historical reality – prosperity was largely limited to predominantly Protestant countries.

Paul Collier’s The Bottom Billion shows just how much the world has changed since Weber’s day, in both the actual economy and in the explanatory style of social scientists. The economic changes have been dramatic. The book’s title refers to the biggest reversal: the once exceptional work ethic has become the near-global rule.

A century ago, what needed explanation was the 15% of the world’s 1.5 billion people who enjoyed prosperity. Production has since increased enough to allow for more than a four-fold increase in the world’s population. The exception is still 15%, but they are now the one billion poor people, out of a total of 6.7 billion. The deprived live in what Collier, Professor of Economics at Oxford and Director of the Centre for the Study of African Economics, misleadingly calls “fourteenth century” conditions.

Collier discusses the distinction between very poor and merely poor countries only briefly, but the differentiation is probably this book’s most significant contribution. In the less poor countries, the basic goods of industrial prosperity – clean water, decent housing, electricity, universal education – are spreading quickly. Collier’s reliance on national borders to mark off the very poor excludes hundreds of millions of very poor people in countries such as China and India, but their number should steadily diminish, if recent trends continue.

It is quite different in the 58 countries of the bottom billion. Collier coyly refrains from naming them, but they are mostly in sub-Saharan Africa. The problem is not that they are stuck in the Middle Ages. Quite modern weapons are used in their too numerous wars. There are airports and mobile phone networks, and usually politicians who have mastered the modern skills of money laundering. What is missing is clearly not all of modernity, but some aspect, basically the attitude identified by Weber: the work ethic.

Economic progress has allowed Weber’s question to be reversed, but analytic progress has been much slower. Collier might disagree. Although the book is written for laymen, it is based on the latest and best techniques of quantitative political science. It is studded with references to statistical tests, peer-reviewed research and data quality.

The method is more rigorous, but the results do not look much different from the sort of intuitive summary that made Weber’s analysis so appealing. Collier focuses on four “traps” that keep prosperity away: conflicts, natural resource wealth, bad geography and bad governance. The traps are more concrete than the nebulous Weberian ethic, but they are not necessarily more profound explanations.

Some of the statistics can be questioned, but Collier’s main weakness is the great curse of all statistical analysis, the difficulty of telling cause from effect. For example, conflicts may help create poverty, as Collier argues, but the causality may work in some other direction. Poverty may spur conflict, the two may be mutually reinforcing, or there could be some other factor – the lack of the work ethic, perhaps – that causes both bitter conflicts and the persistent poverty in the bottom billion countries.

It is much the same with the other three traps. Oil and mineral wealth have clearly created severe problems in many countries, but not in Norway or the UK. Those European countries have the “culture” to deal with windfalls in a disciplined way. The disadvantages of being landlocked are real enough, especially when the relevant coastal countries are also in the bottom billion, but the problems should be surmountable, as long as the interior countries have enough of that certain something which drives economic development. Bad governance is surely part of the poverty problem, but it seems more an effect than a cause of an anti-industrial attitude.

Collier seems persuaded that his modern method has helped him think more clearly. That may be so, but geography has been a feature of cultural analysis since Montesquieu and any visitor to Africa can provide tales of corruption and strife holding back prosperity. Collier provides quite a few of his own.

The scientific air gradually fades away in the second half of the book, as Collier turns from explanation to practical suggestions. The more polemical tone makes for better reading, as he attacks the “villains” who run corrupt countries and the foolishness and hypocrisy of many would-be friends of the poor. It also allows for some fairly sloppy analysis, as in the largely unsubstantiated claim that globalisation makes growth harder for the very poor.

The methodological complaints do not invalidate Collier’s own suggestions. On the contrary, they are worthy of serious consideration, even if they have not been proven analytically.

The most controversial recommendation is probably for foreign military intervention after civil wars and regional conflicts. Collier argues that only outsiders can be sufficiently fair and firm to discourage disgruntled groups from starting up again. The troops should be willing to take casualties and should plan to stay for years. Collier’s case is good, but he is recommending much more intervention than most rich country governments are up for and more integrity than most poor country interveners can manage. Still, Collier is right to point out that the bottom billion countries have problems that cannot be fixed solely by painless changes from the top countries.

He does suggest some changes of that sort – more appropriate aid, fewer restrictions on trade and, more unusually but quite plausibly, laws and charters that would set an achievable standard for troubled countries. The argument for the last is that clear standards would support the “heroes” inside the countries in their battle with the villains. It is not clear whether Collier’s prime goal is to get a few countries of the desperate-poverty list or to help all the very poor countries be a little less chaotic, but either way, such charters are worth a try.

Of course, the most important changes have to come within the poor countries themselves, from the spread of the work ethic which values integrity and investment more than rapaciousness and display. Better laws may lead to better attitudes, but it seems more likely that the prime direction of causality is in the other direction, from the society to its rules. Collier provides good advice on which barriers to development should be attacked first, but he has no magic formula for persuading the last holdouts to give in to the modern way of doing business.

The arguments of The Bottom Billion are not solid enough to make the book the last word on development economics, or even necessarily the best current word on the very poor countries. Still, it is a good and helpful book. Collier uses his basic insight – that the very poor are in a very different situation from the rest of the world – to challenge to the conventional wisdom of both left and right.