Book review: ?The Bottom Billion? by Paul Collier

Friday, March 14, 2008

I’ve got a hip-high pile of books by my bedside, including several manuscripts written by good friends. But after Paul Collier’s talk at TED, his book moved to the top of the pile, and I spent a rainy Saturday diving into his new book, “The Bottom Billion”. It was time well spent.

Collier has dedicated the last thirty years of his life to the study of African economics, as director of the development research group of the World Bank and now as Director of the Center for the Study of African Economics. While he’s got a wealth of technical papers, “The Bottom Billion” is his first consumer book – at TED, Collier explained that he hoped to write an economics book that could be read on the beach. That might be a stretch, but it’s a good, quick and enlightening read, assuming you’re interested in the basic questions of development economics.

The most basic question addressed in development economics is “Why are some people poor?” There tend to be two highly political answers to this question: “Because capitalism is unfair” or “Because poor people don’t work hard enough.” Neither’s an especially satisfying response, and neither is well supported by data. The rise of China, India and Asia has had far more to do with embrace than rejection of the principles of capitalism, and those societies have collectively pulled hundreds of millions of people out of extreme poverty. On the other hand, hard work and embrace of free market principles isn’t likely to have much impact on a rural farmer in Chad.

Most development economists avoid arguments this simplistic, but they’re subject to their own polarization. Two of the most influential popular economic books offer the contradictory advice that rich countries need to give the developing world a whole lot more aid, and that development aid is, for the most part, a near-criminal waste of money that damages as much as it helps. Collier, to his credit, references both Sachs and Easterly in “The Bottom Billion”. A warning to my Sachs-phobic readers – he’s a fan of Sachs’s economics, though he’s far more critical of his advocacy for increased aid.

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Source: My Heart’s in Accra (link opens in a new window)