Book SummaryThe Bottom Billion, by Paul Collier

1-Page Summary1-Page Book Summary of The Bottom Billion

About one billion people around the globe live in persistent poverty—in countries where the economy is constantly struggling and incomes are stagnant or shrinking. In The Bottom Billion, British economist Paul Collier argues that traditional economic theories and development aid programs have paid too little attention to these countries, instead focusing on emerging markets that don’t require help from the West to grow.

Collier, who has devoted his career to the study of underdeveloped economies, says only a select group of the poorest nations need outside help, because they are stuck in “poverty traps” that make economic growth especially hard. This group—which Collier refers to as the bottom billion—needs to be the focus of development efforts. They are stuck, and will stay stuck, unless we help them. By we, Collier means governments, aid agencies, international organizations, and private charities, which must work together to craft policies to help the poorest overcome these traps.

(Shortform note: Collier identifies 58 nations that fall into the category of “the bottom billion.” To avoid “naming and shaming,” he doesn’t provide a comprehensive list. However, he does refer to this group as “Africa+” because most of the countries that make up the bottom billion are in sub-Saharan Africa. Nations like Haiti, Afghanistan, and Yemen also fit into this category.)

Collier stresses that speed is paramount. The longer we wait to help, the harder it will become for the poorest nations to overcome their poverty traps. This is because as the bottom billion stagnates, everyone else continues to grow. This causes an ever greater divergence between the two groups and puts the poor nations at a competitive disadvantage in a globalized economy.

Collier argues that this divergence is already happening. Taken together, middle-income emerging countries (like China and India, for example) grew by an average of:

• 2.5% a year during the 1970s
• 4% a year during the 1980s-1990s
• 4.5% a year during the early 2000s

On the other hand, the poorest nations’ incomes:

• Rose by 0.5% a year in the 1970s
• Declined by 0.4% a year in the 1980s
• Declined by 0.5% a year in the 1990s

Therefore, this group of already poor nations was poorer in 2000 than it was in 1970.

Collier’s reason for helping the bottom billion is simple: 200 years after the Industrial Revolution, the West is developed, and it now has the ability to speed up the process for everyone else. Collier argues that doing so can lift millions of people out of poverty, and it can insure the West against spillover effects of the violence, disease, and dysfunction that poverty often causes.

Who Is Paul Collier?

Sir Paul Collier has spent his academic career focused on economic development, with a specialty in the study of civil war, foreign aid, and democracy in Africa. From 1998 to 2003, he was director of the World Bank’s Development Research department. In 2003, he and his colleagues published a World Bank report called Breaking the Conflict Trap, a...

The Bottom Billion Summary Part 1: Four Poverty Traps

Trap #1: The Conflict Trap

The first of Collier’s poverty traps is conflict. Specifically, Collier focuses on civil wars and coups d’etat, which affect (or have recently affected) about 70% of the bottom billion, causing dramatic harm. Aside from the human costs, this violence reduces economic growth, scares off potential investors, and causes people (and their money) to flee. To Collier, reducing the prevalence of conflict is essential to elevating the bottom billion out of poverty.

Causes of Conflict

Collier and his researchers designed a model to uncover the causes of conflict in developing nations. Among others, they measured variables like income, growth rates, income inequality, and ethnic composition to determine which factors increased the likelihood of conflict. In their analysis, they distinguished between civil wars and coups d'etat: For conflicts that lead to civil war, they discovered three main culprits: low income, slow growth, and natural resource dependence; for coups, Collier found that low income and stagnant growth are also the main predictors of government overthrow.

1. Low income: For a given nation, if current income...

The Bottom Billion Summary Part 2: Remedies for the Bottom Billion

Having explained the four factors that trap the bottom billion in poverty, Collier then discusses four remedies he believes the West and poor nations can apply to break those poverty traps: foreign aid, military intervention, laws and charters, and trade policies.

(Shortform note: Collier doesn’t emphasize political reforms as strongly as other scholars. He also believes in refocusing on economic growth, rather than on more “photogenic” social priorities like holding elections and increasing school enrollment.)

Remedy #1: Foreign Aid

The first remedy Collier examines is foreign aid, which he argues can be useful to spurring growth among bottom billion economies under the right circumstances. Among poor nations, Collier estimates that foreign aid adds about a percentage point to annual GDP. For many nations, receiving foreign aid in any amount prevents their living standards from getting worse. However, Collier believes that aid can go further when it’s used intentionally.

In Collier’s view, most traditional approaches to foreign aid focus on a “one size fits all” strategy of providing aid to all extremely poor nations. Collier believes this strategy fails to consider...

Shortform Exercise: How Has Your Thinking About Poor Countries Changed?

In The Bottom Billion, Paul Collier identifies four traps that lock the least developed nations into poverty (conflict, natural resources, being landlocked, and poor governance). He also enumerates four ways to help poor countries overcome these poverty traps.

What new insight into Collier’s identification of four poverty traps was most meaningful to you and why?