'Development in reverse'

"'Development in reverse'" Continued...

Issue: "Effective Compassion," Sept. 1, 2007

WORLD: You note that "the leaders of many of the poorest countries in the world are themselves among the global super-rich." Why is bad governance so persistent in the countries of the bottom billion?

COLLIER: Because ordinary people are disempowered, both literally if either they do not have votes or elections are corrupt, or because they lack the education and information with which to hold governments to account. Elections are not the same thing as democracy. Democracy depends upon checks and balances that constrain how governments use power. These checks and balances are missing in the "instant democracies" that are now common in the bottom billion. Governments simply hold crooked elections and carry on with business as usual. But oppositions are often as bad as governments. Just because a government is bad, people tend to assume that rebels and political opponents are heroes. Sometimes they are, but commonly they are forged in the same corrupt process as the guys in power.

WORLD: You point out that during the 1980s very poor "countries that stopped shooting themselves in the foot were able to break into new export markets," but it was hard then and is much harder now. Why?

COLLIER: It was hard then because the U.S. and Europe had huge clusters of manufacturing firms-industrial conurbations-that brought costs down dramatically and so enabled them to compete despite high wages. The wage gap with Asia had to widen enormously before new entrants were competitive. Now the bottom billion have missed the boat because Asia has got established. It still has fairly low wages, but it has all the benefits of large clusters of manufactured exports. The result: Africa can't compete against Asia in manufactures. It needs help and it isn't getting it.

WORLD: So the situation is more complicated than it appears from the claims of rock bands and officials that increased aid is the ticket out. You note that "aid alone is really unlikely to be able to address the problems of the bottom billion, and it has become so highly politicized that its design is often pretty dysfunctional." You discuss Chad as an example of aid that was harmful. What's happened there and in some other countries that received aid, and why do armies and coup leaders tend to be the big beneficiaries?

COLLIER: I don't want to knock aid. It's part of the solution, not usually part of the problem. But I don't think that aid alone can fix the problem. It needs to be complemented by all the policies we have neglected. In Chad money clearly leaks into military spending, and the attempt to ring-fence it through the Chad-Cameroon pipeline deal in which civil society in Chad was given some limited rights of scrutiny promptly induced the government to change the rules enabling it to divert the money into the military. It is not necessarily even the fault of the president. For example, the Chad army has 60 generals for a tiny country: 60 because it's a way of co-opting the powerful people who make trouble. Once these people smell oil money, they are going to threaten to destabilize the country until they get their hands on it and they have the power to do so because coups and rebellions are easy in these situations. So, governments buy off the military to preserve themselves.

WORLD: Some celebrated the G8 summit at Gleneagles in July 2005 and its announcement of a doubling of aid, focused on infrastructure. You say such aid is likely to "amplify what is already a serious problem of misgovernance." Why?

COLLIER: The bottom billion need infrastructure, but unfortunately infrastructure projects are the most corrupt sector in the entire economy. Read, for example, the 2004 Annual Report of Transparency International which focused on the sector. Essentially, each project is unique and so very hard to monitor, and competitive bidding is easily gamed by changes in specifications after contracts have been awarded. A corrupt official agrees with a construction company in advance that the company will win the bidding with a low price but then the details of the contract will be renegotiated to give both the company and the official more money.

WORLD: You write that the large and trusted British charity Christian Aid opposed free trade and was "peddling the crudest images of Marxism," in alliance with governments of the bottom billions that "typically adopt high trade barriers . . . because they are one of the key sources of corruption." Are other Christian organizations bamboozled, and what kinds of deeper changes should they be looking for?


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