The "bottom billion" - Paul Collier

Summary

In this thought-provoking talk, the speaker addresses the plight of the 'bottom billion'—a group of people trapped in stagnant economies for decades. He emphasizes the need for a dual approach of compassion and enlightened self-interest to foster genuine hope and development. Drawing parallels to post-war Europe, he advocates for strong governance and international standards to manage the resource wealth generated by recent commodity booms. Ultimately, the speaker calls for informed citizenry to push for substantial change and empower reformers in struggling societies, encouraging the audience to become ambassadors for this cause.

Takeaways

• 😀 The bottom billion people are trapped in stagnant economies, diverging from global progress for 40 years.
• 😀 The essential challenge is to provide credible hope and foster development through compassion and enlightened self-interest.
• 😀 Historical lessons from post-war Europe demonstrate that serious efforts, including aid and trade policy changes, can drive significant development.
• 😀 Commodity booms currently provide unprecedented revenue opportunities for many countries in the bottom billion.
• 😀 While initial growth from commodity booms can be positive, poor governance often leads to long-term economic decline, known as the resource curse.
• 😀 Effective governance is crucial; countries like Norway and Canada successfully leverage resource booms due to strong governance structures.
• 😀 The spread of democracy has not necessarily improved resource management in the bottom billion; strong checks and balances are needed.
• 😀 International standards for governance, similar to the Extractive Industries Transparency Initiative, could enhance accountability in resource-rich countries.
• 😀 Establishing clear international guidelines for resource management could empower citizens and support reformers in struggling nations.
• 😀 Building a critical mass of informed citizens in wealthier nations is essential for driving political accountability and advocating for meaningful development.

Q & A

What is the primary thesis of the talk regarding the bottom billion?

The thesis suggests that a billion people have been trapped in stagnant economies for 40 years, diverging from global progress, and the key challenge is to provide credible hope to these individuals.

What two forces are proposed to change the world for good?

The two forces are compassion and enlightened self-interest, which together can help address the issues faced by the bottom billion.

Why is historical context important in discussing development efforts?

Historical context is important because it shows past efforts, like the U.S. response to post-war Europe, which involved substantial aid and changes in trade and security policies, providing a framework for understanding what could be done for the bottom billion.

What role did the commodity booms play in the development of the bottom billion?

Commodity booms have generated unprecedented revenue flows into many countries in the bottom billion, offering a significant opportunity for transformational development.

What is the resource curse, and how does it affect commodity-exporting countries?

The resource curse refers to the phenomenon where countries rich in natural resources, despite short-term economic growth from booms, often end up worse off in the long run due to poor governance and mismanagement of resource revenues.

What threshold of governance is mentioned, and how does it impact resource-rich countries?

The threshold level of governance mentioned is that of Portugal in the mid-1980s. Countries below this threshold tend to experience negative long-term growth despite initial booms, while those above it can sustain growth.

How does democracy relate to the governance challenges faced by the bottom billion?

While democracy can improve governance, the talk highlights that the lack of strong checks and balances in democracies can lead to worse outcomes during resource booms, particularly in the bottom billion.

What solution is proposed to improve governance in resource-rich countries?

The proposal is to establish international standards for governance related to resource management, which would help reformers in these countries by promoting transparency and accountability.

What is the Extractive Industries Transparency Initiative (EITI)?

The EITI is an existing framework that encourages governments to report their revenues from resource extraction to their citizens, promoting transparency and fostering public engagement.

What is the significance of building an informed citizenry in addressing governance issues?

Building an informed citizenry is crucial as it empowers citizens to hold their governments accountable and ensures that politicians cannot rely on superficial gestures rather than meaningful change.