The Bottom Billion

TLDR: The bottom billion is defined by Collier and his colleagues as approximately one billion people living in the developing world as discussed by the authors, and the authors of The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It, are not mere opinions but rather empirically based conclusions that stem from his exhaustive list of peer-reviewed research.

Abstract: T he traditional view of global poverty assumes that there are one billion people living in rich countries with the remaining five billion residing in the developing world. And yet as the world becomes more globalized, many of the bottom five billion are beginning to climb the economic ladder and are escaping the generational cycle of poverty. Various countries, such as China and India, have seen unprecedented levels of economic growth coupled with rapidly declining poverty rates. But as these countries continue to grow, it becomes increasingly apparent that others are falling behind. Paul Collier, former research director for the World Bank and current director of the Center for the Study of African Economies at Oxford University, has spent his life working to alleviate global poverty. With more than thirty years of development experience, Collier is indeed in tune with the needs of the poor. More importantly, the arguments in his book, The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It, are not mere opinions but rather empirically based conclusions that stem from his exhaustive list of peer-reviewed research. In the first section, Collier declares that the real challenge of poverty elimination is that a group of countries are caught in a development trap and are consequently falling behind and falling apart. According to his definition, approximately one billion people—the bottom billion—are living in these countries. A closer analysis reveals that the economic growth of the bottom billion has actually declined since the 1970s. He believes that the reason they have not grown is because they have fallen into one or more of the following four traps: (1) conflict, (2) natural resources, (3) geography, and (4) poor governance. Although all societies have conflict, Collier’s first identified development trap is internal violence. Collier and his colleagues have identified three causes that lead to civil war: low initial levels of income, slow growth or stagnation, and dependence on natural resource commodities. The first two causes, low income and slow growth, lead to poverty and hopelessness. Consequently, many young men may join a rebel movement, preferring life as a solider with a small chance of riches to a life of despair with little or no opportunities to succeed. On average, a typical civil war in a developing country will last seven years. With the cost of war averaging US$64 billion annually, it becomes clear why patterns of war and violence can impede the economic growth of a country. Empirical research also shows that countries with high proportions of natural resource revenues tend to grow slower than other countries that have diversified exports. This “resource curse,” also known as Dutch disease, occurs when resource exports cause a country’s currency to rise in value against other currencies, thus making the country’s other export activities uncompetitive. Collier also proposes that resource revenues distort