The Bottom Billion

The Bottom Billion:Why the Poorest Countries Are Failing and What Can Be Done About It (2007), a non-fiction book by the British economist Paul Collier, examines the critical problems facing more than fifty of the world's poorest countries, offering solutions about how these problems might be fixed.

Collier argues that while most countries in the developing world face huge poverty-related problems, of the five billion people in the developed world, one billion of those people live in countries where conditions are not improving at all. As such, international aid money should be focused on these billion people, who are stuck in what he terms development traps. He then goes on to define a number of these so-called "development traps."

For example, there is "The Conflict Trap." Countries affected by the conflict trap are usually in the midst of a brutal civil war. Not only do civil wars create horrific consequences in terms of violence and suffering, Collier says there is a huge economic cost to civil wars. He estimates, on average, a civil war costs a country a whopping $64 billion. The biggest problem with this trap is the self-perpetuating nature of it. The longer a country stays in conflict, the few people at the top who profit from the conflict become more entrenched. As such, those who possess the most control over a country's fate are now incentivized to create and perpetuate conflict.



Another example is "The Natural Resource Trap." The author cites a paradox in which the more a country is rich in natural resources, the less prosperous the country is. This is true for a number of reasons, he writes. For instance, a glut of resources leads naturally to conflict, which creates the conflict traps. In addition, the country's leaders will simply enrich themselves on natural resources as opposed to taxing citizens and then offering services in return. This creates a lack of financial accountability for the country's leaders, which further exacerbates the practice of stealing all the resources for themselves. Then the phenomenon known as "Dutch disease" occurs when a natural resource is so profitable in a country that the country's currency is overvalued, making it very different for other industries in that country to compete in any meaningful way.

Another trap is the "Landlocked with Bad Neighbors." Landlocked countries, the author writes, do not have access to a coast and, therefore, can only trade with neighboring countries. However, if those countries lack either the resources or infrastructure to allow for meaningful trade, they strand adjacent landlocked countries from reaping the benefits of a growing global economy. This phenomenon also creates a contagion effect in which poverty spreads from one country to the next across literal borders.

The final trap the author discusses is "Bad Governance in a Small Country." Bad governance is never a good thing, but it is especially damning for small countries. While the cost of living is low in these countries, the smaller populations scare international investors away. Global investors would much prefer investing in countries like India and China where there is no shortage of people to make their products or provide their services.



The last part of the book is focused on potential solutions to these problems. For one, aid agencies should focus largely on the fifty or so countries most stuck in these development traps. Collier also writes that when military interventions take place, they should always be done to create or preserve democratic governments. They should never, however, be used to encourage coups because coups, like Civil Wars, exacerbate a country's conflict trap. The international community should also create charters that require countries that have been historically badly governed to follow specific patterns and practices of good governance. Finally, while free trade should be the goal, preferential export rates should be given to the bottom billion people identified by Collier.

The Bottom Billion is both a fascinating set of policy solutions and a sobering look at how a staggering number of the world's citizens live from day to day.