Books by Paul Collier

Center for Study of African Economies at Oxford

The Plundered Planet

Oxford University Press 2010 333.7 COLLIER - Hillsboro

I started this slow - Collier focuses on governance, while I focus on tools for the powerless. That is where the book ends up. He is an economist, and thinks about incentives.

Collier's focus is on stewardship of resources, natural and economic, for the benefit of the poor and the future. He castigates corporate, government, and "romantic" mismanagement.

Quadrants of 194 countries: wealthy, emerging, Russia/China, and the bottom billion, each about 25% of the world's land.

Resource plunder: extracted by foreign corporations, bribes to government ministers, no lasting value for people. Best management would invest the resources in local development, and in wealthy country markets until local conditions permit development.

Resource extraction: Countries don't know what they have. Countries can change the rules and abrogate contracts. Commodity pricing is extremely volatile. This makes pricing deals extremely difficult, and citizens get less because of the cupidity of their rulers. Many resource-extracting countries end up worse-off economically, creating debt in boom times when they should invest almost all of it.

Norway, Botswana, Malaysia: resources turned into long term growth and security. Transition to prosperity can take a decade, patience is rewarded.

Nigeria: vast oil money, misinvested. The Concrete Armada - ships full of concrete for construction, nowhere to unload or use it, so Lagos pays huge demurrage fees for the ships to wait. Nigerian oil wealth redistributed according to population, not usefulness - and provinces inflate population statistics to get more. Lagos is the choke point - more people moving there, insufficient resources, an underequipped gateway to the world.

p129: Nuhu Ribadu, Nigerian policeman appointed by President Obasanjo to prosecute corruption. Chased out after Obasanjo left office.

p133: absorption problem of managing incresed investment. Manage three things 1) public investment (with tendered bidding) 2) complementary private investment 3) price of purchased capital goods.

veto points checkpoints in the process, stopping abuses.

Cost-benefit analysis can fail to capture immeasurable benefits. Economists unavailable to do the analysis.

p139: doubling city population increases percapita productivity 6%.

Romantics: Anti-tecnnology in Britain (aristos), Anti GMO in Europe, "Food"-ihol in US (but anti-Brazilian sugar biofuel, the efficient kind). Prince Charles: romantic aristocrat (KL: seemingly no education in science or logical thinking). "peasants in aspic"

p146: To facilitate fast response to extraction commodity price crashes, policy should facilitate opening and closing businesses.

p147: capital goods are inelastic - boom time investment drives up construction and equipment cost. contested land titles chokes off construction.

p148: small markets inelastic, unresponsive

p149: slumps are the best time for construction and infrastructure investment

p155: medieval Britain planted yew trees for long bows, but "thanks to technology we can now shoot people more efficiently".

p156: What will the future think of us? when we deplete assets, are we compensating the future with other (technical? structural?) assets?

p159: the future will judge us not for our actions, but for their ideological convenience.

p160: public assets are plundered - overfishing because nobody owns them.

p163: $80B fish catch, $30B subsidies. OECD subsidizes fleets to plunder bottom-billion oceans (Sierra Leone) Somalia fisheries ransacked by foreign fleets, fishermen resorted to piracy.

p165: un-owned fish will be plundered to extinction

p168: Collier proposes assigning nonterritorial ocean fish to UN which sells rights, collected where landed or sold wholesale, and priced to reflect future demand increase.

p177: Assignment of carbon rights creates rent-seeking, lobbying machines, and scamming.

p185: Carbon tax that reflects $40/ton damage, applied globally, leads to global coordination

p187: There is no reason for a government to use a carbon tax to raise its total revenue take sez Collier; nonsense say I. They will raise taxes as much as they can.

p195: Copenhagen summit based on theology of guilt, attribution of blame. Had the poor countries industrialized simultaneously with us, CO₂ levels would be huge. We help them achieve prosperity because we can and we should, not because we've generated more CO₂ since 1940. "Blame" and "rights" will simply shift high pollution industries to them, as it has shifted those industries from California to China.

p210: Food is inelastic, increased demand in Asia raises prices for the poor. CO₂ increases climatic volatility (I thought it moved agricultural zones towards the poles?) so prices will be more valuable.

p211: Urban poor spend half their income on food. Children starve, stunted development, long term cost. food-miles thinking starves and impoverishes. Commercial agriculture 10%-20% more efficient.

The Bottom Billion

Oxford University Press 2007 338.9009 COLLIER - Hillsboro

The war on savings - my neologism

NGOs driven by ideology, hate growth and investment. The headless heart.

p11: "Yet the central problem of the bottom billion is that they have not grown."

G8 2005 meeting, Gleneagles, 2007 meeting, Germany

Poverty Traps

p79: escape rate 2% per year

p81: recent change: 80% of developing countries' exports are manufactures

p82: Krugman Venables: "economics of agglomeration", first factory improves infrastructure for second factory, feedback growth

p83: Madagascar 1990s, export processing zone grew to 300K (of 15M) jobs, strangled by election-losing Admiral Didier Ratsiraka

p86: China makes resource deals to support dictators like Zimbabwe's Robert Mugabe.

p89: Institutional Investor 1(bad)-100(good) country risk scale: Uganda from 5 in 1990? (worst in Africa) to 23 in 1997

p91: capital flight often hidden in fake export pricing. in 1990 author estimated 38% of private wealth held abroad. Bad local investment conditions frighten domestic investors.

p93: Migration is "human capital flight" - education brings remittances but not local development

Aid: usually reactively timed, much after cessation of conflict but not for long term growth.

Military intervention: Best: US in Kuwait, British Operation Palliser in Sierra Leone. Worst: US in Iraq, Somalia, Angola. French in Côte d'Ivoire.

Laws and Charters Banks take loot from corruption, but little oversight, compared to finances for terrorism.

Trade Policy p156: guilt "is contrived, and diverts attention from a practical agenda". "poverty is simply the default option when economies malfunction".

Exodus

Oxford University Press JC6033.C65 2013 PSUlib

An eye-opening book, politically incorrect, about migration from poor to rich countries.

Until the bottom billion catches up with the developed world, migration is how ambitious people escape poverty and war. "Too many" and they form into diasporas in the host countries, unassimilated and conflicting with the indigenous populations. Collier's main prescription is to set limits on migration to maximize the benefits for smaller numbers of migrants.

The main problem is that assimilation slows when a diaspora is big enough and concentrated enough to isolate migrants from the indigenes in mutually suspicious camps. The left favors "cultural diversity" over assimilation (I suppose I should eat lutefisk and wear a cowboy hat), which creates tension, and politically exploitable groups with grievances.

Collier's grandfather Karl Hellenschmidt immigrated from Ernsbach Germany to Bradford England around 1900, married an English wife, and had 6 children by the beginning of World War One. He is interned as an enemy alien, his wife suicides, and his twelve year old son leaves school to run the family shop. Twenty years later, Karl Hellenschmidt Jr. moves and changes his name to Charles Collier and becomes Paul Collier's father.

My grandfather immigrated from Sweden in 1911, and changed his last name from "Löfström" "Lofstrom" when he settled in Oregon. My grandfather probably encountered some anti-European hostility during World War One, but America was (and is) better at assimilating than Britain.

Collier focuses on marginal effects of migration. Migrants as a whole may make some measurable (national income, race riots) better or worse, but what does the next migrant do to the picture? Optimally, we tune the system for so that the first derivative is zero. Diasporas can drive migration far beyond the optimal, making the first derivative bad for everyone.

Beyond the obvious "those XXX ain't like me", Collier's concerns include:

Prosperous nations result from centuries of social experimentation and investment in institutions, paid for by the ancestors of the currently living indigenous people. US citizens are free because their great great great grandparents fought at Yorktown, and great grandparents fought at Gettysburg (sometimes on the wrong side, but risking their lives to settle important questions). They built the network of cities and factories and organizations that made modern life possible, and bequeathed their hard work to us, their biological and intellectual heirs. Migrants do not automatically deserve that legacy, but should be able to earn it by their own contributions.

Many poor countries are lines on a map, imposed by European rulers, that divide and combine hundreds of competing clans. The clans are driven by "honor" and feuds, with in-group loyalty and out-group hostility making coherent nations almost impossible. When African politicians play off ethnic groups against each other, like Kenyatta in Kenya, village-level cooperation fails. Nyerere of Tanzania "emphasized nation over ethnic identity" (p240) resulting in cooperation. "National identity has its uses" says Collier.

Collier writes as if the forces that led to Hitler and Stalin (and Pol Pot and ...) are gone from history, and thus the large and powerful state is mostly a force for (sometimes misapplied) good. He views libertarians as isolated atoms (p232) and unconcerned (p246). While individuals with instruments of power (like military weapons) are dangerous, the book is replete with examples of governments with failed agendas. Those governments sign his paychecks; if he had a different bias, someone else would get the paycheck.

So ... the problems that he writes about are real. How could we arrange things so the problems are mostly solved? Collier favors wise national policies promulgated by beneficent leaders, but does not explain how leaders become beneficent. He partially blames bottom-billion failures on bad leadership, but bad leaders are possible anywhere. North and South Korea are the same ethnicity, and the South has had some terrible leaders, but managed to succeed while the North failed miserably. Maybe freedom and choice have a bigger role than wide leadership.

Economists like Collier are observers and theorists, and seek observations that fit into the structure of the theories they consider worth thinking about. Their question: is a theory true or false? Perhaps better questions are "what theories are we missing, and what data are we ignoring?" I appreciate Collier's quest for new theories and data, beyond the old liberal/conservative divide, but perhaps we need to decentralize the quest, and choose theories and test them in parallel, in many smaller experimental communities. That is what freedom is for - not to isolate people into atoms, but into self-selected experimental groups, trying out new ideas. Most new ideas fail, but the ideas most of us consider to be true started out as new ideas that managed to not fail too badly.

Interesting references:

Page 286, Dercon, S., Krishnan, P., and Krutikova, S., "Migration, Well-Being and Risk-Sharing," Mimeo, Centre for the Study of African Economies, University of Oxford.

Dercon, Stefan, Pramila Krishnan, and Sonya Krutikov, "Migration, Risk-Sharing and Subjective Well-Being," Oxford University, mimeograph (2009) cited here on page 1027.

Page 289, Mercier 2012: The return of the prodigy son: Do return migrants make better leaders?

Experiments:

I'm an engineer. I don't set policy - I design the new tools and situations that policy addresses post hoc.

Nations are bounded geographically because communication used to be slow and local. What about virtual nations , voluntary, self-selected, and planet-wide? This might not produce steel and streets, but as we transition to a global information economy, we can assemble "information nations" enabled by rapid global air and container transport, and connected at the speed of light by encrypted gigabit communication. Arguably, al Queda is such a virtual nation - what if good people worldwide gather into vastly more powerful, productive, and peaceful virtual nations? Information nations need physical hardware, bleeding edge semiconductor fabs are the source of that hardware, and fabs should be built in safe places (like Hillsboro Oregon, except for enormous but rare earthquakes). Can a virtual nation protect its semiconductor fabs from physical, financial, and legislative attack?

Virtual adoption: Biological families are the financial root of migration; they send a son to a rich nation, to build the financial and legal bridge the rest travel on. The migrant son does not assimilate much; the family not much at all. Imagine a better planned process. Families in source and destination countries build a long term merged relationship; the destination family providing education and secure finances at the destination, the source family providing well-trained and friendly domestic (or small business employee) help. The idea is to extract the best cultural values from the source nation, while training a whole family of migrants to arrive at the destination ready to assimilate.

Stepwise migration, beginning in the source country: Collier suggests guest workers and temporary visas to weather source country crises, also student visas; however, when the "temporaries" are released into a pool of free people, they can easily disappear and be very difficult to find and send back. And if they have partly assimilated, made indigenous friends, and contribute socially and philanthropically to the destination country, sending them back is socially destructive and bad for international relations. What if migration is a more drawn out affair, with preparation beginning in childhood (education in destination country language, history, cultural norms), and destination country protection extending to those particular individuals? A 12 year old child who is "50% US" by training and temperment should have some degree of military and legal protection from the US, because they will be a loyal and contributing US citizen someday, just like the future citizens who are fortunate to be born in the US.

We do not need to attempt these experiments at national scale; we can try them with a few hundred people at a time in many different variants. Clinical trials for eventual nation-sized cures.

BooksPaulCollier (last edited 2016-08-27 23:56:59 by KeithLofstrom)