The bottom billion

[cross-posted at LeaderTalk]

I just finished Dr. Paul Collier's award-winning book, The Bottom Billion. An economics professor at Oxford University, Collier notes that traditionally we have thought of the world's population as being made up of '€˜a rich world of one billion people facing a poor world of five billion people'€™ (p. 3).

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Instead, we need to recognize that the developing world should be divided into two groups, the middle four billion and the bottom billion. The countries in the middle group have economies that are growing, life expectancies that are rising, infant mortality rates that are dropping, and malnutrition rates that are declining. They still have a long way to go compared to the developed world, but they are making progress. India and China are both part of the middle four billion, despite once being poorer than many of the countries in the bottom billion.

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In contrast, the bottom billion people continue to live in '€˜the fourteenth century, [doomed by] civil war, plague, and ignorance'€™ (p. 3). Their economies are not growing and, '€˜given the power of compound growth rates, [the] differences between the bottom billion and the rest of the developing world will rapidly cumulate into two different worlds'€™ (p. 10). The bottom billion not only are '€˜falling behind … [they are] falling apart'€™ (p. 3).

Below is a graph of the growth rates of the bottom five billion over the past few decades [note that the actual growth rates were not this linear; Collier reported his figures by decades so I had to approximate]. Growth rates were as follows:

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When these growth rates are plotted cumulatively, the chart looks something like this:

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As you can see, the bottom billion are barely better off than they were 35 years ago. About 70 percent of the bottom billion lives in Africa. The bottom billion includes countries such as Somalia, Afghanistan, Haiti, Yemen, and North Korea.

I have greatly appreciated how this book has reoriented my thinking about global economic development challenges. Being a data guy, I have jumped into some of Collier'€™s numbers in order to help me envision what the challenges are that face the bottom billion. As we look toward the plight of our own disadvantaged student populations, we would be well-advised to look for data that help us reorient our thinking so that we may appropriately address our learning challenges. What data do you have that might shake up the thinking of your educators, students, and families?

[I learned a lot from this book. I give it 4 highlighters.]

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One Response to “The bottom billion”

  1. Scott,

    Thanks for writing about this great book by professor Collier. I have just started reading it myself after hearing an interview with Collier on EconTalk podcast last year. I teach IB economics, and used an excerpt from the hour long interview when Collier talks about “development traps”, or those characteristics shared by numerous countries in the bottom billion that can help explain why they are “trapped” in absolute poverty.

    As I read the book now, I constantly question whether the developed world is doing what’s best for those in the bottom billion. Collier also points out that MOST development aid from the rich world goes into the countries where the middle 4 billion live, in other words, the countries that are already developing. The simple and obvious reason for this is that the rich world wants to point its aid in a direction where real returns on their investments are likely and visible.

    Micro-finance programs in Bangladesh and India have been wildly successful, and these high profile programs like the Grameen bank receive deserved recognition. But India, Bangladesh, China, these countries are already developing, yet receive the most attention from the rich world… it’s those poorest that are left behind not just by the world of development aid but of trade liberalization as well.

    Opening the markets of the poorest countries will only bring them development if the richest countries stop subsidizing and otherwise protecting their own producers. Farm subsidies in the west bring cheap industrially grown food to Sub-sahara Africa, undercutting the prices charged by domestic farmers. Cheap food, good, right? Well not for poor world farmers who have no source of income anymore. Without income, there is no savings, without savings there is no capital available for local entrepreneurs to borrow and invest. Without domestic investment, these countries have no hope of achieving any sort of growth or development.

    The first step to escaping the development trap in the bottom billion countries is for the West to truly open their markets, and stop protecting domestic farmers and manufacturers. Only then can these poor countries, many whose only abundant resource is cheap labor and abundant farmland, can begin competing in the global marketplace.

    Thanks for posting this article… I think I’ll spend a little less time blogging and a little more time reading Collier’s book now. I’m taking a group of Econ student to Egypt next month to study development issues, this may be the right book to have them reading from in preparation for this learning experience!

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