Zamora, Frances Faye K.

2011 62843 BA SOC

July 24, 2013 POSC 180

Paul Collier on the Bottom Billion

Over the last 40 years, the less developed countries have been stagnant. For the people in the bottom billion, life is getting worse and worse. It is not optimism that the rich countries need to give them, but credible hope, because if this goes on for another 40 years, our children would suffer. Collier gave two forces that changed the world, the combination of compassion and enlightened self-interest. The world should get serious about giving this credible hope for the developing countries. But compassion alone is not enough to save a developing region, as when America helped develop Europe in the post-war. How did America drag Europe in economic development? Marshall Aid, a big aid program, was part of the solution, but was insufficient. America had to tear up their trade policy, opening markets to Europe and dragging it into the then-global economy and institutionalized trade liberalization. America also tore up their security policy, sending a hundred thousand troops in Europe, and tore up national sovereignty, found the United Nations, and other associations for mutual government support. These four are effective policies (aid, trade, security, and governance). Collier focused on one of these four on his talk, governance. He showed an idea to strengthen governance. The commodity boomed, which gave optimism to third world countries. Mass of new discoveries, oil, iron ores, and others were from the third world, but these have not taken them out of the bottom billion because the revenue flow dwarf aid. Collier has done a scientific approach, looking at the relationship between higher commodity prices of exports and the growth of commodity exporting countries. These countries are great in the short run, but have not done great in the long run. This is due to bad governance, where the ministers and companies make deals which are good for them, but not for their countries. Collier also mentioned the complexity of democracy, which actually is adverse and are worse than autocracies in terms of resource booms. There are two aspects of democracy, electoral competition and checks and balances, where the latter messes up the resource booms but can be saved by strong checks and balances. The countries in the bottom billion got instant democracy, where they had been conducting elections, but have got no strong checks and balances. It is important for the citizens to be informed of the flows of revenues in their countries. Countries can improve governance through having international standards. The governments should report to their citizens the revenues they have. People can know the true value of their resources through verified auctions. Necessary to change the world are these international standards. People cannot change the world, but they can help the people in the bottom billion struggling, but failing for change. The world needs international rules. These international rules are nonexistent, but are essential to the worlds development. The world can have these rules when it has critical and informed mass citizens.