Africa and “The Bottom Billion”

Paul Collier’s new book on African development aid, “The Bottom Billion,” demands some attention. Why? Consider Collier’s autobiography:

I research the causes and consequences of civil war; the effects of aid; and the problems of democracy in low-income and natural-resource-rich societies. In addition to the usual academic outputs, my work has had substantial policy impact. In the past year I have been the senior adviser to Blair’s Commission on Africa; have addressed the General Assembly of the UN; given a seminar at 10 Downing St.; and been invited to meet with Condoleezza Rice on her recent UK visit.

Secondly, and I could be wrong, it is a rare book that earns praise from both The Guardian, The Financial Times and The Daily Telegraph. The FT’s Martin Wolf, who knows his economics, wrote a fascinating review.

Collier argues that trade, for all its potential benefits, will not help the bottom billion. These countries are uncompetitive exporters of labour-intensive goods and services, given the low costs and established positions of Asian producers. They cannot compete with China or Vietnam. Similarly private capital does not flow to these countries, except to exploit their natural resources. The problem is the reverse: huge capital flight. Collier estimates that almost 40 per cent of Africa’s private wealth was held abroad in 1990.

Collier is also sceptical of the ability of aid to make much of a difference, at least on its own. He believes aid can help – and has helped – the bottom billion. But it has been a holding operation, rather than the start of sustained growth. He is particularly sceptical of the view that unconditional budget support will work. We have, after all, already had an experiment with the consequences of unconditional finance: oil revenues.

Niall Ferguson reviewed Collier’s book for The Daily Telegraph and The Los Angeles Times, which examined outgoing British Prime Minister Tony Blair’s approach to the continent. Here’s a non-Blair excerpt:

Many well-meaning people – led by that most Evangelical of economists, Jeffrey Sachs – continue to have faith in aid as a policy, arguing that it simply needs to be better targeted, for example on the provision of free malaria nets. But economists who know Africa better than Sachs are sceptical.

Oxford’s Paul Collier, author of The Bottom Billion, persuasively argues that Africa’s biggest problems (apart from incurable ones such as its location) are political. Corrupt tyrannies and civil wars between them account for a huge proportion of Africa’s economic under-performance since the end of colonial rule.

Here’s The Guardian’s take, which says:

As an economist, Collier’s call to arms is founded on hard-headed cost-benefit analysis, not post-colonial guilt or emotional hand-wringing. He calculates, for example, that the cost of a badly governed ‘failing state’ to itself and its neighbours in lost economic growth is a staggering $100bn. On that basis, spending a few million on parachuting in skilled administrators to support the government, bankrolling infrastructure projects or even sending in troops to put down an incipient coup looks like a bargain.

Finally, the last word deservedly belongs to Michela Wrong. Writing in The New Statesman, she praises Collier while criticizing Dr. Jeffrey Sachs.

Sachs believes that Africa’s salvation is ours to bestow. It’s that simple. We have the know-how; all we need is a huge hike in western aid. History-lite, politics-free, unashamedly populist, his vision of the world is utterly appealing. It just doesn’t happen to bear any relation to the world I live in. I guess that’s why I find him so tiresome. …

This year, before donning a plastic wristband and heading for the agreed march route, why not buy a copy of The Bottom Billion, just published by Professor Paul Collier? It’s such an accessible read, you could get through a chunk of it while on the march. If you’re really interested in world poverty, you won’t be able to put it down. It’ll make you realise that fretting over which G8 signatories will hit the 0.7 per cent of GDP mark is the modern equivalent of obsessing over the sex of angels.

For my own part, I recently penned a related commentary exclusive, “Bono and Friends are Wrong on African Development Aid,” for World Politics Review.

Blake Lambert has covered Africa for the Economist, Canadian Broadcasting Corporation Radio, and the Christian Science Monitor. He is a WPR contributing editor.

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