Paul Collier’s last book, The Bottom Billion, proposed that there are four “traps” in which the poorest countries can become enmeshed (a conflict trap, resource trap, geography trap and governance trap). He vividly explains why he thinks that “business as usual” will not lift these countries out of poverty, creating the prospect that 58 countries, home to the poorest billion people, will fall further and further behind the standards of living of the rest of the world.
At a conference at Wilton Park this week a number of people gathered together to review progress since the Africa Commission and Gleneagles Summit in 2005, and to discuss the prospects for a transformation in Africa over the coming years. One participant (one of the authors of the Africa Commission report) argued that the Commission set out a comprehensive action plan which, if implemented across the range of its recommendations, could address these traps and lead to real progress.
I am not so sure. I think there is a fifth trap facing Africa which is more chronic and pervasive than any of the four traps identified by Paul Collier. It is the “unfair rules” trap, and I think it makes it very hard for Africa to make much progress on the other four.
Development and an improved standard of living for people in developing countries will come not from aid but from industrialisation and economic growth. We do not know exactly how to ensure that these economic transformations occur, though there is much we can do to create the conditions in which it is more likely. (Aid can help create the conditions for growth, and can help people to live better lives while the process is under way). But as the world economy becomes more integrated and more globalised, many (though by no means all) of the determinants of a country’s opportunities for economic development are determined by international institutions, systems, rules and agreements.
The “unfair rules” trap is that the rules of the game are determined by the rich for the rich. And the consequence for the poorest countries is that they are having to fight uphill to create conditions for their development; so they continue to fall behind the rest of the world economically. Their relative lack of economic power reinforces their lack of political influence internationally and so makes it harder for them to influence the institutions and rules which contribute to their continued economic marginalisation.
This “unfair rules” trap takes many forms. There is a myriad of complicated rules and institutions that affect a huge swathe of economic and political life. These international agreements range from highly political – such as the global allocation of the right to emit greenhouse gases under the post Kyoto framework for climate change – to the deeply technical such as phyto-sanitary standards which unnecessarily limit exports of groundnuts from Africa to Europe.
On BBC World this weekend there is a debate among a group of African leaders in which Linah Mohohlo, the Central Bank Governor of Botswana, points out that new global rules are currently being devised to promote financial stability – an issue that affects every country in the world – without any participation by Africans.
Consider our attitude to property rights. Rich countries have attached considerable importance to the establishment and global enforcement of intellectual property rights, which enable their firms to secure revenues from the use of their intellectual property. They have, for example, pursued this through the WTO. Whatever you think about intellectual property rights, there is no doubt that they can be expensive for developing countries, both because of the huge revenues that flow from Soweto to Seattle and because of the restrictions imposed on access to vital knowledge rich products such as pharmaceuticals, software and business practices. But consider a parallel property right: the right to emit greenhouse gases. Like intellectual property rights, emission rights are an institutional construct designed to bring about an improvement in economic efficiency (by rewarding innovation in the case of IPRs, and by taxing polluters in the case of emissions rights). Emissions rights, if properly designed, fairly allocated and enforced around the world, would entail a reallocation of wealth from rich countries to poor countries. But while the rich world is happy to insist on the importance of intellectual property rights (of which it is a seller) it is unwilling to consider the establishment of property rights over assets for which it would be a buyer. In the run-up to the summit in Copenhagen, there was no serious discussion of the idea that every citizen should be entitled to an equal share of the atmosphere, and that anyone wanting to occupy more than their fair share should pay compensation to those who are using less. The discourse is limited to the realpolitik of what rich countries are likely to accept.
Of course, it was ever thus. Nobody should be surprised to hear that the rich and powerful set the rules, and that these are not always to the benefit of the poor. But within nation states this dilemma is partly addressed through the political process. Universal suffrage has made it impossible for national institutions, laws and regulations completely to ignore the interests of the poor; though of course there is still a long way to go before the interests of the poor are given the attention they deserve.
But the international system does not benefit from the equal representation implied by universal suffrage within nations. In some international institutions, power is formally one-dollar-one-vote. In many others this is not the formal position, but it is true in practice. The global political system does not rebalance economic power between nations in the way that political processes can within nations.
To address Paul Collier’s four traps will require concerted international action – for example, to take steps to prevent the corruption and patronage that is associated with extraction of natural resources, to limit the sale of arms which fuel conflict, or change trade rules in ways that improve Africa’s prospects of trading with the rest of the world. That is why the trap of “unfair rules” is so profound: for as long as Africa remains politically weak in the international system, it is hard to envisage how the international cooperation is required will be brought about.
I find it hard to see how a transformation can be brought about unless we find a way to address the problem “unfair rules”. For as long as Africa remains economically disadvantaged, it is marginalised in the setting of rules and governance of global institutions. This in turn profoundly affects its ability to escape Collier’s four traps, and so limits its prospects for development, and thus locks in the growing divergence from the rest of the world. Africa seems to be likely to be caught in the jaws of this trap for as long as there is no political process that allows African countries to obtain more power and influence within these international institutions than their relative economic weaknesses entails.