Interview with Paul Collier
FrontLines - May 2009
Oxford University Professor Paul Collier, author of The Bottom Billion and a leading scholar on
international development, spoke with FrontLines Editorial Director Ben Barber on March 2.
Q: What are the four traps that
you say—in your book, The
Bottom Billion—keep the
poorest 1 billion people from
developing?
COLLIER: There’s no one
explanation for why these
countries, about 60 of them
with about a billion people,
why they’ve not prospered
like the majority of the people
in the developing world. But I
think there are four syndromes
or traps that account for most
of it.
One is, some countries are
just landlocked without valuable
natural resources. And
therefore your opportunities
shrink, especially if you’re
surrounded by a bad neighborhood
of other countries.
Africa is split into so many
different countries, so a lot of
them are landlocked; same with
Central Asia. Those are the epicenters
of that particular trap.
The second trap is having
valuable natural resources [such
as oil], but instead of it being an
opportunity for transformation,
they become something that’s
contested, the politics turns sour
and they become a curse.
A third trap is large-scale violent
conflict—typically these
civil wars go on for more than
10 times as long as international
wars and have a heightened risk
of going back into another one.
These civil wars are development
in reverse—they destroy
the economy and leave an
appalling legacy.
The final trap is starting from
bad governance, having a society
that’s small, probably ethnically
divided. Bigger societies
and more homogeneous societies
seem better at reforming out of
bad governance rather faster….
When you’re big, you institutionalize
power relationships,
and when you’re small, there’s
alliances.
Q: How can these traps be
sprung?
COLLIER: You have to widen
the set of instruments for dealing
with the problems. Obviously,
aid is one. When America 60
years ago decided that it was
imperative to redevelop Europe,
America used the whole waterfront
of policies: a big aid program—
Marshall aid—and a total
reversal of American trade
policy.
Before the Second World
War, America had been highly
protectionist. After the Second
World War, it opens its markets
to Europe and commits itself to
that through setting up the
General Agreement on Tariffs
and Trade. So aid is part of it;
trade is part of it.
What else? America totally
reverses its security policy.
Before the Second World War, it
was isolationist. After the
Second World War, there’s over
100,000 America troops in
Western Europe for over 40
years. So security is part of it.
These countries are often structurally
insecure.
And then the final dimension
is involvement in other countries’
governments. And again,
total reversal: Before the Second
World War, America has this
extreme policy of non-interference.
It won’t even join the
League of Nations. And after the
Second World War, it sets up the
United Nations; it sets up the
Organization for Economic
Cooperation and Development—
OECD. It sets up the IMF
[International Monetary Fund].
It encourages Europe to form the
European Community.
These things work in combination—
aid, trade, security,
governance…. And, of course,
they’ll be different from the
cocktail that was needed to
restore Europe.
Q: Can culture be a trap?
COLLIER: I’m skeptical of
claims that culture is a trap….
cultures change as a result of
economic change. In the
streets of Seoul, people used
to basically shuffle along
slowly. And now, the sidewalks
are so like the sidewalks
of New York—people bustle
and stride. And of course
what’s happened there is the
value of time has gone up, and
so people have speeded up.
We haven’t got much clue
how to change a culture in the
hopes that that will change the
economy, but we have got quite,
pretty decent clues about how
to change the economy in the
hopes that it’ll change a culture.
Q: If USAID hopes to assist
the bottom billion, what policies
should change?
COLLIER: Where the
capacity of the state to deliver
is very limited, I suggest
independent-service authorities,
which is that the retail
delivery of services is contracted
out to whatever works,
as many channels as possible:
NGOs, churches, private sector,
local communities, whatever
works.
In between the ministry
that does the planning and the
retail delivery on the ground
will be the independent-service
authority, a quasi-public
agency which contracts with
retail providers and monitors
their performance…. It’s
much more realistic than trying
to rebuild the state. And
it’s something that can be
scaled up fast.
I’ve just been working in
Haiti, and at the moment, 90
percent of basic services are
provided outside the state.
But it means that no public
monies, no aid money is
going to [the state]. With
independent-service authority,
the government would have a
role; it could co-brand the
service, so it would be visibly
doing something.
We’ve tried for 40 years to
build something that looked
like Europe in the 1950s, and
it hasn’t worked. Maybe we
should get the message that a
different design is appropriate in
these environments.
The other thing is budget support.
There’s been a really big
divergence between America
and Europe and I think it’s time
for a synthesis. Europe was right
that if you can empower the
government, and the government
gets it right, that’s the best
model. And America’s been right
that Europe has just shut its eyes
to the realities of how its money
has been spent.
So what I would like to suggest
is that donors create independent
verification systems to determine
whether a budget system is fit to
the budget’s form… whether it’s
got the same sort of integrity as
our own budget systems.
Q: That’s what you’d ask?
COLLIER: If money leaks, it’s
not just that it’s wasted. It’s captured
by people who then use
that money to finance patronage
networks. And so you’re building
exactly the problem from
which fragile states suffer. They
are empowering the crooks, so
the people who lose out on that
are those brave people struggling
for change.
Q: What do you think are
USAID’s distinct advantages
and what are its weaknesses?
COLLIER: Well, I’ll give you
one huge advantage at the
moment, which is Obama: a
massive, massive advantage.
You should not underestimate it,
really. Africans are not just
intrigued by Obama, as most
Europeans are. The big difference
is that Africans are proud
of him. And that pride, if you
think about it, is the basis for a
lot of legitimacy in American
access. If Obama stood against
Mugabe in a fair election, he’d
win. So America’s got a new, a
new perceived legitimacy in
Africa, way beyond anything
that Europe’s got. And you’re
always going to be taken
seriously. You’re America,
you’re big.
Q: How should we use that to
achieve some progress here?
COLLIER: Well, I think partly
you should be bold. You’ve got
quite a lot of freedom for
maneuver. You can make a difference.
I think if I were you, if I
was America, I would start with
Haiti.
I [went] there in March with
[President] Bill Clinton, [U.S.
Ambassador to the United
Nations] Susan Rice and [U.N.
Secretary General] Ban
Ki-Moon. We started this report
for Ban Ki-Moon back in
December on what a growth
strategy would look like. And
Haiti has opportunities. The hard
things have been done in Haiti.
There’s 7,000 Brazilian peacekeepers
providing security and
America has provided a very,
very favorable 10-year trade
deal, Hope II.
What’s left is the simple
things, like providing decent
infrastructure to enable industry,
especially the garments industry,
that could use Hope II to be
competitive. I think Haiti—
amongst the fragile states or
whatever you call them—Haiti
is about the best-positioned to
break out, because it’s not in a
bad neighborhood, there are big
geographic advantages in being
so close to the American market,
a huge diaspora in America.
I think it would be very good
for everybody’s morale if a state
like Haiti was gradually put on
the road to success. America
would have shown that it could
be central to the turnaround of
what had been regarded as a basket
case. And it’s in your
backyard.
Q: How will the current global
financial meltdown affect the
bottom billion and efforts to
improve their lot?
COLLIER: What a big setback.
The pertinent issue is have we
put this to some good? You
know, it’s an ill wind that blows
no good, so this is an ill wind.
Can we find some good in it?
And I think one good is the ending
of the global commodity
boom, which is the biggest single
negative for the countries of
the bottom billion.
They’re getting less money
for their exports. But that
showed countries how they were
unsustainable with a development
model just based upon
extractive industries. And so it’s
an important lesson that these
things are intrinsically temporary,
and the moment has to be
harnessed by saving revenues
and using them for
investment.
The other possible silver
lining is about China, which is
not at all part of the bottom
billion but is a competitor to
the bottom billion in lowwage
manufacturing.
China’s whole development
model of the last few
years has been export, export,
export to here, to America.
And now exports are collapsing.
So China is faced with the
choice of either letting industry
collapse or re-orient
demand towards the home
market. If it has any sense at
all, it will be the latter.
Q: As opposed to what?
What else can it do?
COLLIER: Well, it could shut
its industry down. I’m assuming
it’s got some sense. It
won’t shut its industry down, it
will just build the domestic
market for those products.
Q: How can the food crisis be
resolved?
COLLIER: I am against this
ban on GMOs [genetically
modified organisms]. I say
that you need a mutual deescalation
of folly, in which
Europe would give up this
ridiculous ban on GMOs and
America gives up its huge
subsidies of biofuels. And if
those two were done, then
world food supply would be
so much higher that we
wouldn’t have a food crisis.
★
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