Development Outreach

In The Bottom Billion, I argued that a group of around sixty, small, low-income countries with a combined population of around a billion people had missed out on global economic development and so had diverged from the rest of mankind. Helping these countries to catch up has become the central challenge of development. Aid is one way in which we can help, but aid alone will be insufficient: a good model for how the rich world can effectively help the countries of the bottom billion is how the United States helped to rebuild Europe after the Second World War. It combined a large aid program, the Marshall Plan, with trade policy, security policy and governance. To help Europe, the U.S. government completely reversed its pre-war protectionist trade policy, opening its markets to European goods and committing itself to openness through the General Agreement on Tariffs and Trade (which has now evolved into the WTO). Similarly, it completely reversed its pre-war security policy of isolationism, stationing over 100,000 U.S. troops in Europe for over 40 years. Finally, it completely reversed its approach to the governance of other countries: before the Second World War, it had refused even to join the League of Nations, whereas post-war it co-founded the United Nations, the Organization for Economic Cooperation and Development and the International Monetary Fund, all institutions for mutual support of good governance.

Post-war Europe was a fragile mess of impoverished and politically weak countries that needed this integrated approach to assistance. The countries of the bottom billion need a similar approach now: their problems are even more acute than those of Europe 60 years ago. In particular, there are two fundamental public goods which they are structurally ill-equipped to supply internally: security and accountability. Without these public goods development is far more difficult: insecurity discourages investment, and a lack of accountability breeds corruption and policies that serve narrow elite interests instead of the society as a whole.

Security and accountability: Internally in short supply

The provision of security is the classic example of a public good. Yet security is often hard to provide in the countries of the bottom billion. The structural characteristics of these societies, poverty, stagnation, the presence of valuable natural resources, and ethnic diversity, all make rebellion easier. Further, security is characterized by strong economies of scale: with small populations and tiny economies governments cannot reap these scale economies and so cannot afford effective security. Indeed, governments face a dilemma: a large and well-equipped military might help to discourage rebellion, but it might also increase the risk of a coup d’état. Many more governments are toppled by coups than by rebellions. Hence, governments often prefer to keep the army weak, an example being the late President Mobutu of Zaire, who maintained a policy of undermining and dividing his country’s military. He made himself safe against coups but was instead toppled by a rebellion.

The provision of accountability is more difficult than security because, unlike other public goods, it cannot be provided simply by the government. Accountability depends not just upon the institutions built by government, but upon active and effective scrutiny by citizens. The standard “technology” by which citizens can hold government accountable is elections, and they have indeed become much more common in the bottom billion countries. However, elections only achieve accountability if they are properly conducted. It has proved disturbingly easy for incumbents to win elections by resort to illicit tactics: bribery, intimidation and ballot fraud. New research finds that where governments face well-conducted elections they indeed deliver improved economic policies as measured by the World Bank’s “Country Policy and Institutional Assessment.” Ordinary voters appear to want the sort of policies that the World Bank has tried to encourage. But this benign effect of elections only holds when the elections are well-conducted: illicit tactics let government off the hook.

While illicit tactics are bad for economic policy, they are very good for incumbent rulers. Where they are used, the chances of electoral victory increase so much that the expected duration of a ruler in office is tripled. So, where illicit tactics are feasible, incumbent politicians are likely to resort to them. Statistically, the characteristics that tend to make illicit tactics feasible are a low-income, a small population, and large resource rents. Unfortunately, these are the structural features of the bottom billion.

This analysis suggests explanations for why governments of India, not one of the bottom billion countries, have been better able to provide security and accountability to citizens than have governments of Africa. India’s population is many times larger than the typical African country, enabling it to reap scale economies, and India does not have large resource rents.

Security and accountability: Internationally supplied

If security and accountability are critical public goods for development, and if the countries of the bottom billion are structurally unable to supply them internally, then some form of international supply is necessary. One approach is for the countries in a neighborhood to pool sovereignty so as to form larger entities that are better able to reap scale economies. The pioneers in the neighbourhood pooling of sovereignty have been the United States, Australia, and Europe. California, New South Wales, and Germany, each have far larger economies than the typical society of the bottom billion, but their governments have chosen to retain far less sovereignty. Unfortunately, although the societies of the bottom billion need the benefits of pooled sovereignty far more than these rich societies, their governments have clung to power. Indeed, since governments are often not very accountable to citizens, what is being treasured is better described not as national sovereignty but as presidential sovereignty.

Given the very limited neighborhood pooling of sovereignty, the only alternative is to have a phase of international assistance in providing security and accountability. Recall that in respect of security this is what the U.S. did for Europe for over 40 years. International provision may raise the spectre of a return to colonialism, but such fears would be misplaced. Manifestly, there is no appetite among the former colonial powers for a return to empire: they are democracies and their citizens would not countenance it. Indeed, international provision need not rely upon the former colonial powers. For example, in Haiti, a classic country of the bottom billion, for the past five years security has been ably maintained by 9,000 Brazilian peacekeeping troops serving under the authority of the United Nations, and with the support of the government. Decades of global economic growth have switched many countries such as Brazil from being recipients of international assistance to being participants in providing it.

Peacekeeping and over-the-horizon guarantees are effective ways of providing security. In post-conflict situations which, historically, have faced high risks of reversion to conflict, peacekeeping succeeds in bringing risks down. Indeed, despite its high financial cost, peacekeeping is good value for money, given the enormously higher cost of conflict. Currently, international resources spent on peacekeeping are not counted as development assistance, and there is no coherent budgetary framework in which its value is compared and evaluated against aid. Developing ways of making such decisions is an example of how better to coordinate the range of policies—aid, trade, security and governance—that will need to be deployed.

Elusive accountability

International strengthening of accountability to citizens is probably more difficult than security. At a minimum, the international community can develop voluntary standards and codes which governments can then choose to follow. An example is the Extractive Industries Transparency Initiative which many governments are now accepting as a reasonable benchmark. There is also a good case for conditionality, not in respect of economic policies but of governance. Policy conditionality detracts from the accountability of government to citizens because it tries to deprive government of responsibility for some economic decisions. In contrast, governance conditionality seeks to insist only that government is accountable to its own citizens.

The most radical suggestion in Wars, Guns and Votes is to use the provision of security as an incentive for accountability. Governments that came to power through elections recognized as free and fair would be protected from the threat of a coup by international military force where this was feasible. It is hard to see how the suppression of a coup and the restoration of a rightful government could be misconstrued as colonialism. When President Bill Clinton used the threat of American troops to put down a coup in Haiti, and Prime Minister Tony Blair used British troops to restore the legitimate president of Sierra Leone, their interventions were welcomed. But, of course, if a government stole an election this protective cover would be withdrawn. With four African governments having been overthrown by coups within the past year such protection would surely be an attractive incentive for keeping elections clean.

Paul Collier is Professor of Economics and Director of the Centre of African Economies at Oxford University. He is also Professorial Fellow of St. Antony's College, Oxford. His book, The Bottom Billion, Why the Poorest Countries Are Failing and What Can be Done About It won the Lionel Gelber, Arthur Ross, and Corine Prizes for 2008. Wars, Guns and Votes: Democracy in Dangerous Places was published in March 2009 by HarperCollins in the USA, and by Bodley Head in the UK.