The Plundered Planet: Why We Must — and How We Can — Manage Nature for Global Prosperity

  • Paul Collier
Oxford University Press: 2010. 288 pp. $24.95 9780195395259 | ISBN: 978-0-1953-9525-9

Better governance is often called for to solve global challenges. In The Plundered Planet, former World Bank economist Paul Collier argues that a shared ethic for the management of natural resources and environmental liabilities could pull the world's most impoverished people out of poverty and address climate change at the same time.

Following up on his 2007 book, The Bottom Billion, Collier — currently director of the Centre for the Study of African Economies at the University of Oxford, UK — here identifies two holes in the web that protects the planet and its poorest inhabitants. One hole is created by bad governance, the other by the limitations of good governance. Together, these gaps make natural assets, such as a country's mineral wealth, vulnerable to plunder while making it difficult to manage natural liabilities such as carbon emissions.

To address the first problem, of governments requisitioning a country's resources without being held accountable, Collier maps out a way to encourage domestic leaders to harness natural assets for their citizens' benefit. His solution is to assess the worth of extracted materials and reinvest a proportional amount in society. To address the second problem, that of the absence of international bodies to regulate natural assets and liabilities, Collier calls for global cooperation between governments. Carbon emissions, for example, could be reduced if all nations agreed to and upheld a universal carbon tax. To ensure compliance, including even the poorest nations, Collier suggests using “carrots and sticks”: supplying aid while applying constraints such as trade restrictions. He believes that such domestic and international schemes will ultimately be delivered by pressure from informed citizens and civil-society organizations that promote transparency and accountability.

Given the scale of the challenge, Collier sees governments as the main actors. He recognizes that his case hinges on the accountability of the governments of the bottom billion. But his top-down proposal misses the point that accountability cannot emerge when economic power is concentrated rather than dispersed. An informed citizenry is not enough: ordinary people in poor countries already know that they are getting a raw deal but lack the economic leverage to force their governments to change.

Access to mobile phones in Bangladesh has contributed to increased individual productivity and income. Credit: G. M. B. AKASH/PANOS

Dispersed power makes it harder for individuals or groups to corner resources or advance state policies that favour narrow interests. Power is centralized in governments that receive their revenue not from their own citizens but from outside — from aid, say, or mineral wealth. This channels resources to elites, strengthens bureaucracies and discourages entrepreneurship and innovation.

In the absence of dispersive forces, the continued mineral extraction prescribed by Collier would accrue wealth to state coffers. The provision of aid would similarly undermine government accountability.

Collier applauds Botswana for the way its sound government reinvested diamond wealth in agricultural support for its people, rather than plundering its natural assets for narrow gain. But he neglects the fact that it was dispersion of power that engendered this accountability. With poor soil and erratic rainfall, Botswana's limited agriculture surpluses prevented tribal chiefs from concentrating power, forcing them to rule by consensus. Local chiefs were left in place by colonial British rulers, preserving the tradition of discussion and consensus-building.

Although the land in Botswana did not attract Europeans, cattle could tolerate it. When the country became independent in 1966, there were 40,000 cattle owners nationwide, with 2,500 owning more than 100 animals. A broad coalition of cattle owners became the ruling party. This government served vested interests by assisting the export of beef and building infrastructure in rural areas. National and individual interests became aligned towards greater production. Tribal and geographical diversity prevented consolidation of power, leading to the accountability that later helped Botswana to put its diamond wealth to good use.

A similar process gave power to the people of the United States in the late eighteenth century. The property owners — mostly farmers on relatively equal standing — organized their democracy together. By contrast, in Britain, citizens gained power from a narrow elite over centuries as technology and commerce allowed them to expand their economic clout and demand checks and balances. Regardless of how the dispersed power structure was achieved, it was preserved by innovations and technology in both the United States and Britain.

Better than Collier's government-led prescription would be to empower the bottom billion as problem solvers. People are a country's biggest natural asset, and their engagement can bring about economic progress. Nearly two decades ago, I started an effort to provide widely accessible mobile-phone services in Bangladesh, leading to the creation of the company Grameenphone. A competitive multibillion-dollar telecommunications industry has since grown up there, based simply on products and services that increase people's productivity and income. In parallel, mobile-phone technology has attracted billions of dollars in investment to other countries that lack drinking water, health care and electricity, such as in sub-Saharan Africa.

The money invested in mobile-phone infrastructure in poor countries did not come from state mineral wealth. Instead, individuals' ability to pay, stemming from their increased productivity, attracted investment. Entrepreneurs capitalized on this opportunity to provide a service. As economist Joseph Schumpeter noted in the 1930s, entrepreneurs — armed with ideas but not necessarily money — can rearrange the means of production to boost economic growth. In other words, empowered by tools and schemes that enhance productivity, the poor can tackle problems without relying on coordinated efforts by governments. It is a virtuous cycle: citizens advance their businesses and states collect more taxes, making them more accountable to the populace. The supply of aid or a reliance on centralized mineral wealth destroys or prevents this link from emerging.

The Plundered Planet is right to highlight the importance of government accountability in addressing poverty and climate change. But it will be the dispersion of power, fuelled by entrepreneurship and innovation, that will ultimately empower individuals to create accountability and solve global problems.