Roughly 80 percent of people in the developing world live in countries making moderate or significant economic progress. Yet the remaining 20 percent—mostly in sub-Saharan Africa—reside in countries with stagnant or declining economies. "We need to focus not on the developing world of 4 billion but on the ‘not-developing' world of 1 billion," he said. The book's first section—the diagnosis—identifies 58 "bottom billion" countries and outlines why they have failed to develop. He argues that these countries suffer from at least one of four problems:
- Natural resource scarcity;
- Landlocked location, with unproductive neighbors;
- Poor governance in a small country; and
- A history of conflict.
Collier's presentation focused on the landlocked and resource-scare states. While very few countries in the world share both features, a staggering 30 percent of Africa's population resides in landlocked and resource-scarce states. What conditions allow a landlocked country like Switzerland to develop while another landlocked country like Uganda languishes in poverty? According to Collier, the difference lies in the quality of your neighbors: "Uganda cannot be Switzerland because the countries around it are not Germany, France, and Italy. The key question becomes: What do your neighbors do?" Collier also pointed to Niger—a landlocked country with an economically productive neighbor, Nigeria. Without strategic resources of its own, Niger's success is dependent on Nigeria's continued growth. However, the reverse, he noted, is not true.
The second half of the book is dedicated to policy prescriptions. Of his four recommendations, Collier argues that the policy and development communities have relied too heavily on one: aid. While he does not subscribe to Easterly's belief that aid has actually harmed development, he also does not believe, like Sachs, that aid is a panacea. "There is no one magic solution," he said. "Aid is part of the solution, but isn't the entire solution." He believes the aid debate will resolve itself if development agencies stop acting like aid agencies and start acting like what they really are: Their goal is not simply to give money, but to spur development—a mission that he thinks has been lost in recent years.
Greater trade access, increased foreign investment, and more and better security and peacebuilding forces round out Collier's recommendations. He argues for greater access to high-income markets by lowering or removing tariff and quota barriers, which would help developing countries transition from low-value to high-value crops, or away from agriculture entirely. "What is needed is for them to get involved in labor-intensive industries like textiles," he said. The different policy responses can also be used in conjunction: Greater levels of investment could help a country move away from subsistence agriculture to more lucrative industries like manufacturing. To see these sorts of shifts, though, policies must be harnessed and coordinated. "If there are four policy solutions, we need to learn how to use all four," he said.
Drafted by Alison Williams.
- Professor of Economics and Public Policy and Director, Center for the Study of African Economies, Oxford University