Wandering Thoughts

October 4, 2009

Paul Collier Debated

Filed under: Ramblings and Musings — terence @ 10:25 am

The Boston Review has an interesting essay debate on Paul Collier’s thinking and the potential for international intervention to help the World’s poorest countries. Definitely worth a read.

As I read through it I took some notes. When I get time I’d like to write them up into a post of their own, with my own thoughts. For now, they’re over the fold.

The Collier Thesis:

Paul Collier would have us distinguish between the parts of the developing world that are, indeed, developing and the parts that are not. Countries such as India and China, along with much of south East Asia are still poor but they are on the pathway to development. Their economies are growing rapidly and this won’t be reversed. Poverty is being reduced. On the other hand there are a group of about 60 countries, home to approximately a billion people, mostly (but not exclusively) in sub-Saharan Africa, which have shown little progress over recent decades. They are trapped. Condemned by a vicious cycle of poverty, poor-governance and conflict.

Elites in these countries are confronted by a perverse set of incentives which reward the extremes of bad governance, preventing the provision of essential public goods and impeding the functioning of markets.

The nations of the bottom billion are usually small (in an economic sense), resource rich, landlocked, former colonies, and conflict prone.

Size matters because it renders them unable to afford essential public goods. Being landlocked hinders trade. And in the absence of good governance, the irony of resource wealth is that it makes nations poor by rewarding rent seeking and corruption amongst elites. Most important, perhaps, is former colony status – these ‘nations’ are in fact collections of different peoples cobbled together by colonial map drawers. They lack a strong enough national identity to override internal divisions. This contrasts to European states, which formed “organically”, over time through and in response to warfare, which allowed the crafting of national identities and necessitated taxation, which in turn lead to demands for accountability.

Lack of national level identity means that politicians often find the easiest route to power being to appeal to a particular ethnic group and reward them with some of the trappings of rule. This contributes to atrocious governance and conflict and tensions.

Finally, often the biggest threat to despotic leaders in the bottom billion is their own armies, thus they are incentivised to keep them weak; however, this leaves such countries prone to civil war.

In the poorest country, ‘nominal’ democracy doesn’t help solve these problems, in fact it actually makes them more conflict prone as leaders use patronage politics to win votes from their own ethnic group, which enhances underlying divisions.

The solution? The developed world needs to intervene, the countries of the bottom billion won’t escape on their own. As intervention collier suggests: aid, (to governments conditional on democracy), but more importantly peace-keeping and, most controversially an over the horizon guarantee; that is a promise to would-be bottom billion leaders: if you govern democratically and with some ability we promise to protect you. To intervene on your behalf if a coup should occur. On the other hand, should you subvert the democratic process or govern poorly we will withdraw our protection. Providing a ‘green light’ for your army to topple you should it wish. This, Collier argues, will provide an incentive for good governance and nation building.

Stephen D. Krasner:

“Stephen D. Krasner, Graham H. Stuart Professor of International Relations at Stanford University, is Senior Fellow at the Freeman Spogli Institute and the Hoover Institution”

Essentially agrees with Collier, citing RAMSI as a successful intervention in this vein. Does point out that external intervention can be very difficult to undertake, but argues that sometimes it is the least worth option.

Highlights the Millennium Challenge Account as an example of incentivising good governance – it rewards better governance through more money.

William Easterly:

“William Easterly, Professor of Economics at New York University”

Charges that Paul Collier has fallen prey the human impulse to see patterns where there are none. The bottom billion isn’t a homogenous group of countries facing the same problems but rather a mishmash of countries, some which have always been poor, others that have recently declined. At the end of any two decades you will always have a ‘bottom billion’ but this doesn’t mean they will be so two decades from now.  In fact, if there’s one thing we know about grow episodes their volatile, across countries and across time.

Collier places great weight on his statistical studies but methodologically they are unsound. He is guilty of ‘data mining’ and running enough regressions until he gets one that tells the story he wants to tell. He’s also guilty of claiming causation where in fact all that exists is correlation.

Easterly, fulminates against Collier’s arguments for peace keeps (a euphemism for people who nevertheless kill people) and argues that Colliers arguments are imperialism reheated. And that they provide an excuse for international intervention – something that has all too blood a history to be any type of a solution. As an alternative Easterly argues for evolution from below and incremental change, rather than big ideas.

Easterly’s points are often unfair (Collier does try and tackle endogenaity in his regressions; and what he’s doing doesn’t really seem like data mining to me). Moreover, peacekeepers may sometimes kill people, but that’s not the purpose of their work. And evidence does suggest that what they do, however messy and imperfect, does – to a degree – work.

Easterly, is more interesting when he charges that the bottom billion is coincidence not category (were Collier’s book a couple of decades older he could have easily included India – diverse, terribly governed, dirt poor, home to several civil wars– in his list.) His point about the unintended consequences of grand interventions is also a good one.

Larry Diamond:

“Larry Diamond is Senior Fellow at the Hoover Institution and the Freeman Spogli Institute for International Studies at Stanford University.”

Takes Collier to task on his categorisation of the bottom billion. India is large and heterogeneous, and has managed this. While Botswana and Mauritius should have been bottom billion countries but have actually done well.

In terms of solutions Diamond, supports the Millennium Challenge account – financially incentivising good governance. While arguing that the ‘green light’ should never, ever be given to the military, who are too destructive to be relied on, in any way, as a pro-democracy force. Instead we should be discouraging the military’s involvement in politics, through sanctions international actions and the international court.

Edward Miguel:

“Edward Miguel, Associate Professor of Economics at the University of California, Berkeley, is author of Africa’s Turn? and coauthor with Raymond Fisman of Economic Gangsters.”

Argues along a similar line to Easterly – Africa has grown recently. Since 2000 up until the GFC the continent has had respectable growth, including Sub-Saharan Africa. We shouldn’t assume that being in today’s bottom billion is inevitability or even that it necessitates major intervention.

Miguel also argues that the trouble with promising intervention is that interventions to date have often been very poor – the problem in Rwanda wasn’t absence of intervention but terrible intervention (witness the culpability of the French). Also Miguel argues harder still than intervention is nation building.

Mike McGovern:

“Mike McGovern is Assistant Professor of Anthropology at Yale University.”

Contests Collier’s taxonomy of the bottom billion arguing that there are too many exceptions to Collier’s defining characteristics. (Singapore and Belgium ‘work’ for example).

He also argues that while intervention can be warranted success depends on context and defies grand proposals for global promises: what works in Liberia and Sierra Leone won’t work in the DRC.

Finally, he argues that Collier falls into a common trap: comparing the realities of Africa, with the non-existent idea of Europe and America. (Where all the problems of the bottom billion can be seen to some extent, without apparently being crippling).

Nancy Birdsall:

“Nancy Birdsall is President of the Center for Global Development.”

Agrees with much of the diagnosis but is much less keen on Collier’s prescribed cure. She agrees with him on sovereignty and intervention – sovereignty is of the people, not of their rulers. And if rulers are terrible, then there’s no good ethical reason to allow them to hide behind borders. But argues for less grand, although not necessarily convincing interventions: rewarding leaders who step down, conditional aid, non-national leaders, regional infrastructure building, strengthening police forces, and good old fashioned peace keeping.

Collier’s Rejoinder:

Argues with Miguel that while Africa has grown recently there’s no guarantee that this will be sustained, some indicators of performance have improved but others have got worse. Let’s wait and see.

Against William Easterly he defends his statistical methodology and defends collective action and intervention – it can work!

To McGovern argues that actually there is good evidence across countries to highlight the problems of the bottom billion (such as ethno-linguistic fragmentation).

To the proponents of less grand intervention rather than defend his particular position he effectively retreats to a position that he is simply trying provoke informed debate about interventions, where they can work and how they should be undertaken.

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