This Wonkcast was originally recorded in February 2011. Andy Sumner updates the data from the original Bottom Billion brief in his recent working paper, Where Will the World's Poor Live? An Update on Global Poverty and the New Bottom Billion.
Paul Collier’s 2007 book, The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It, changed the way we think about poverty and development. Collier argued that the majority of the 5-billion people in the "developing world" live in countries with sustained high growth rates and would eventually escape from poverty. The rest—the bottom billion—live in 58 small, poor, often land-locked countries that are growing very slowly or not at all. These countries, stuck in poverty traps, should be the focus of foreign aid, Collier argued.
Andy Sumner, a visiting fellow at CGD and research fellow at the Institute for Development Studies at Sussex University, is boldly challenging that view with more recent data and a new frame of reference that tell a surprisingly different story: three out of four of the world’s poorest people, Andy asserts, live in middle-income countries with impressive growth rates but may nonetheless are trapped in extreme poverty. Andy joins me on this week’s Wonkcast to discuss his work on this “new” bottom billion.
“A lower-caste woman in India is probably as trapped in poverty and as poor as someone in Sierra Leone, one of Paul’s bottom billion countries,” says Andy. Although many large emerging market countries enjoy rapid, sustained growth, he says, high and rising inequality means that the growth “hasn’t been sufficiently poverty reducing.”
“Reducing inequalities makes growth much more effective,” Andy notes. “If you can make growth more effective, you can end poverty much faster around the world.”
This new view has important implications for international efforts to reduce poverty, including for foreign assistance. Aid is increasingly targeted to the countries of Collier’s bottom billion, even though by Andy’s reckoning these countries are home to only one out of four of the world’s poor.
We end by discussing an idea that Andy raised during his visit here at CGD: the notion of “Catalytic Classes,” that is, social strata comprised of people who are not overly reliant on the status quo but are nonetheless prosperous enough that they are not worried about falling into poverty. “When this group gets sufficiently large and has the communications technology to communicate to others, maybe that leads to a lot more pressure for positive change,” says Andy, reflecting on recent events in the Middle East.
Is fostering the growth of “Catalytic Classes” in developing countries an appropriate goal for outsiders? We end our chat with more questions than we began with.
Have something to add? Ideas for future interviews? Post a comment below, or send me an email. If you use iTunes, you can subscribe to get new episodes delivered straight to your computer every week.
My thanks to Wren Elhai for his production assistance on the Wonkcast recording and to Will McKitterick for drafting this blog post.