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The New Bottom Billion: Andy Sumner
February 28, 2011
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.
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2 Responses to “The New Bottom Billion: Andy Sumner”
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March 4th, 2011 at 3:17 pm
[...] it gets at the growing problem of inequality within a society. According to Andy Sumner’s recent talk “three out of four of the world’s poorest people live in middle-income countries with [...]
March 29th, 2011 at 11:06 pm
The core question is to target poor countries or poor people.
I live and work in Vietnam, where a number of grant development agencies are planning to phase down, or phase out their development assistance during 2011-2015. This policy is largely based on Vietnam having reached middle-income country status in 2010 , but also to the evident reduction in poverty from 58% of Vietnamese households in 1992 to about 13% in 2010 .
There are a couple of concerns about the above indicators dictating departure decisions. Firstly, they do not account for the size of a country. With 86 million persons, Vietnam is the 13th most populous country in the world , and so while only 13% of households may be in poverty, that converts to 11 million persons – more than the total population of Laos, or Togo, or Burundi, Eritrea, Tajikistan, or the Central African Republic. Further, an increasing share of those 11 million are the (relatively) “left behind” ethnic minorities in the central and northern highlands. Geographic (or even ethnic) targeting should therefore be given higher priority as a share of any ongoing poverty-focused development assistance. That may be a more appropriate strategic change than just leaving 11 million people in absolute poverty.
The other concern is the arbitrary nature of “middle-income”. At US$1,160 per capita in 2010 , Vietnam was still very far from being “rich”. Middle-income is a World Bank classification that stretches up to $11,905 per capita, or just to $3,855 per capita for “lower middle income”. It would be quite reasonable to argue for a contraction of the “middle” by counting those under $1,825 per capita as “low income” countries (below $5 per day).