05/01/2014

According to Collier the world consists of 5 billion habitants well-off or rapidly getting
there, and 1 billion falling futher behind.
Since 1980 world poverty is falling for the first time in history. Most people are escaping
poverty but a few countries, cauight in four distinct traps, are falling behind.
The third world has shrunk and the real challenge is the countries at the bottom.
Aid is a development business by the big aid agencies, who don't find it safe and
productive to live and work in the most difficult countries.
Seventy percent of these one billion are in Africa.
With hard work and intelligence a society can climb out of poverty.
The Four big traps are:
1) Conflict
2) Natural resources
3) Being landlocked
4) bad Gov't.
The problem is Africa
-The + includes Haiti, Bolivia, the Central Asian countries, Laos, Cambodia, Yemen,
Burma, and N. Korea.
These countries are small. Life expectancy is 50 years.

China and India

Conflict Trap
- 73% of people in the bottom billion countries are in a civil war or have recently been
through one.
- Civil war reduces low income and low income increases civil war risk.
- The economy is wea the state is weak and rebellion is easier.
- Conflict provides territory outside government control for illegal activities to operate.
-- Three economic characteristics make a country prone to civil war: low income,
slow growth, and dependence upon primary commodity.
Natural Resource Trap
Paradoxically, the discovery of valuable natural resources in the context of poverty
constitutes a trap.
In the presence of large surpluses from natural resources autocracies produce more
growth than do democracies.
When there is plenty of money, corrupt leaders tend to embezzle funds, spend on
large, pet project.
Resources reduce the need to tax, undercut public scrutiny.
Landlocked with bad neighbors
Geography matters. Landlocked countries must export to neighboring countries or
through their infrastructures to the coast.
Uganda is poor and Switzerland is rich because they are dependent upon their
neighbors.
All countries benefit from the growth of their neighbors but resource-scarce
landlocked countries must depend on their neighbors for growth.
This includes about 30% of Africa.
Terrible governance and policies can destroy an economy very fast.
Countries who have done better since 1980 have generally exported labor-intensive
manufacturers and services.
Exporters need an environment of moderate taxation, macroeconomic stability and a
few transpot facilities
Persistence of bad governments because the learders of many of the poorest countries
in the world are themselves among the global superrich.
Many of them are simply villains, but there is a shortage of people with knowledge.
Turnarounds are rare because reformers are often suppressed and in danger

Three characteristics encourage a turnaround: larger populations, higher proportion of

people with a secondary education, and recent emergence from a civil war.
Characteristics likely to help outside interventions to work.
o Higher population
o larger population
o greater proportion of population with education
Interventions less likely to work if:
o Leader has been in office a long time

Globalization
globalization is helping the developing world grow faster than the developed
countries, but it is causing the bottom countries to fall further behind because of
global trade, the flow of capital, and the migration of people.
In the past four years, the average country of th ebottom billion has at last started to
grow, but at a slower pace than the other developing countires.
The societies of the bottom billion can only be rescued from within.
Chapter 7 foreign aid
Aid alon is really unlikely, in my view, to be able to address the problems...so highly
politicized that its design is often pretty dusfunctional.
Statistical evidence has diminishing return.
Well intentioned support for the desperately poor country of Chad is likely to end up
financing the army.
Aid as technical assistance can be of help in the turning around of failing states.
Military intervention
Restoration of order
maintaining post conflict peace
preventing coups
They are strikingly cheap and include both our own laws and international norms.
Most conduct is guided by voluntary norms and enforced by peer pressure than by

Rich-country trade policy is part of the problem.

"It is stupid to provide aid with the objective of promoting development and then adopt
trade policies that impede that objective."
Brave people in these societies struggle for change but the odds are against them.
"One of four instruments - aid, security, laws and charters, and trade -- we are using the
first quite badly and the others scarcely at all."

Extreme Climate and Violence

Panel data ---> extreme climate leads to more violence.
Several major civilizations all collapsed during especially dry and hot periods.
Climates line up with periods of civil war.
Psychologists found similar relatiomship that at higher temperatures people are more
aggressive.
27 modern studies that focused on temperature
A lot of political violence in Africa.
Edward Miguel
"Quantifying the INfluence of Climate on Human Conflict."
Introduction
Despite the existence of institutions designed to promote peace, interactions between
individuals and groups sometimes lead to conflict.
Understanding the cuases of such conflict is a major project in the social sciences,
and researchers in anthropology, economics, geography, history, political sciences,
pyshcology and sociology have long debated the extnt to which climatic changes are
responsible.
In low income settings, extreme rainfall events that adversely affect agricultural
income are also associated with higher rates of personal violence and property crime.
Some forms of intergroup violance, such as Hindu-Muslim riots tend to be more
likely after extreme rainfall conditions, reduced agricultural production may be an
important mediating mechanism
Climatic influence on human conflict appears in both high and low income societies,
although some times of conflict such as civil war are rare in high income populations.
TWO most important factors appear to be aggression and scarcity. (physiological)
Deviations from normal preciptiation and mild temperatures systematically increase
the risk of conflict.