How (some) poor places have been transformed

Left Behind: A New Economics for Neglected Places
Paul Collier
Allen Lane
June 2024
304 pages
ISBN: 978-0241279168

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A recurring political narrative across the Western world relates to groups feeling that they have not reaped the same economic rewards as others, or feeling that their regions have been abandoned. Often, this becomes a question of the highest importance politically – one that determines the fate of governments and candidates. Think of the distinction between the “Beltway” and the “Rust Belt” in the United States, or between the Greater London area and post-industrial Northern England.

Sir Paul Collier, Professor of Economics and Public Policy at Oxford University, is one of the foremost development economists in the world, with a lifetime of experience in advising governments and international bodies on how to raise living standards in Africa and elsewhere. His 2007 book, The Bottom Billion, looked at why many poor countries were failing to advance. His newly-published Left Behind: A New Economics for Neglected Places builds on this foundation, and Collier’s expertise in looking at problems on both a national and regional level helps to make this a profoundly valuable work for any student of public policy.

Entire regions are failing in socio-economic terms, and many of them are lashing out politically at those elites concentrated in large and successful cities. Collier takes aim at what he believes is outdated small-government economic dogma as well as the centralising tendencies of government bureaucrats. He is refreshingly open-minded and not afraid to break with the orthodoxies of those who have been heavily involved in the dispensing of international aid abroad and the organisation of the welfare state at home.

As he shows in his analysis of His Majesty’s Treasury in the UK, key decision-makers in the administrative states often come from a lamentably narrow segment of the population. This certainly narrows their worldview and most likely hinders their critical thinking as well. For all of the problems in the developed and developing worlds, progress is being made, and Left Behind is certainly an optimistic work.

“This book,” Collier writes, “is a celebration of the ingenuity and courage with which poor places around the world transform their prospects. It sets out a new economics of place-based transformation – the principles and practical steps by which these triumphs have been attained.”

The successful case studies from around the world are remarkable for their diversity. What joins them together are two factors: shared agency (the steps through which people come together to advance a common purpose) and rapid learning (where groups are willing to experiment and learn from others), two factors which together have the power to close the gaps between affluent and deprived places.

As a native of Sheffield – still a steel-making powerhouse in his youth, but certainly not today – Collier is particularly well-placed to observe how destructive a spiral of economic decline can become. As well as quoting Professors Angus Deaton and Anne Case’s work highlighting the “deaths of despair” in America’s working-classes, he also points to worrying research he has carried out in South Yorkshire, where schoolchildren have come to believe early on that their life prospects are severely limited. This can lead to the sort of “learnt helplessness” and “learnt dependency” which has blighted entire regions.

Communitarianism is at the heart of Collier’s approach: people can only solve big problems together and they have to work together to do so. Little wonder then that Professor Robert Putnam’s magisterial work on the importance of social capital in explaining the economic divide in Italy looms so large here. People do not come together and work together successfully without practice, and it greatly helps if there is a multi-generational bank of experience to draw upon.

The northern Italian city states of the Renaissance era excelled in building lasting social institutions from the choir to the guild, whereas the absolutist Norman rulers in the South of Italy discouraged any such communal activism. The legacy of this historical divide lives on to this day in Italy’s materially and socially impoverished Mezzogiorno. Many similar examples exist, and Putnam’s work on the decline of community in the United States suggests that the problem may be getting worse. It is hard to fix this. As Collier notes, “[s]ocial capital is like a muscle: the more it is used, the stronger it becomes; unused, it atrophies.”

Collier identifies community as being one of the three essentials for creating a more sustainable world, along with states and moral bounds, and the relationship he sees between community and moral behaviour is particularly interesting when considering the more naturally individualistic social context of America and Britain.

“[M]uch of our behaviour is shaped by our community-of-place and our community-of-work. Within them, we care about what other people think of us: that is the glue that induces us to behave well towards each other. That glue is essential to a sustainable society. A world without it – a world of disconnected people – would fall apart. It would be brutal and transactional because people’s selfish instincts would be unrestrained.
In recent decades, both in Britain and America we have brushed close enough to such a society to appreciate how ugly it would be. Only with that communal glue are we able to forge and sustain willing compliance in common purposes,” he writes.

Collier is clearly a progressive in his politics, and tilts leftwards on economic policy. Regardless of whether the reader agrees with all his policy prescriptions, his analysis of important developments appears to be correct, as when he identifies the huge Brexit vote across England’s regions as being as much a rejection of London as it was a rejection of Brussels.

Although he is not a fan of those who propose free market solutions for tackling regional imbalances, Collier is also critical of Britain’s Labour Party and other left-of-centre parties. Their answer to policy problems often tends to be focused on the word “nationalisation,” which Collier rightly suggests would be better described as “centralisation” – a step which simply concentrates power in the hands of a faraway and disconnected administrative elite.

The examples of previously lagging countries and regions which have made significant ground are illuminating. After the trauma of mass genocide, Rwanda has achieved remarkable progress through community-focused environmental policies and the clever use of technological innovations, like overcoming infrastructural and geographic challenges by delivering fresh blood to health clinics using drones.

Though it is not yet a country and therefore unable to access aid funding, the Somaliland region has achieved the stability which Somalia has not; Somaliland’s main clans have come together in a coalition, and fused their militias into an effective security force for the whole region. They are not yet free of Somalia, but they are now free of some of Somalia’s worst features.

The case of Father José María Arizmendiarrieta’s role in developing co-operative businesses in what was then the backward Basque region of Francoist Spain is particularly striking. After years of educating and training young people, Father José identified five who were capable of launching what has grown into the co-operative giant that is the Mondragon Corporation, which now employs 90,000 people. As these worker co-operatives have risen, so has the surrounding region. No longer a laggard, the Basque region is today among the more prosperous parts of Spain.

Although localism is praised in these pages, Collier is realistic about the overall track record. The creation of a devolved Scottish government has not closed the gap between Scotland and England, and when the national government of Colombia shared oil revenues with local governments, it simply empowered local criminals.

Collier is right to acknowledge that building government capacity is often a very slow process, but he occasionally overlooks broader issues such as culture and nationhood itself. Most unfortunately, he criticises the US and other governments for not developing the capacity of Afghanistan’s military, which completely collapsed in the face of the Taliban’s onslaught. This characterisation of that sad affair does a disservice to those many allied soldiers who literally died trying to train Afghan troops, and often died at the hands of their trainees.

For people to work together, there generally does have to be a common identity of some kind – perhaps not a total unity of ethnicity, religion and language, but a unity of some kind and directed to some purpose. Afghanistan’s descent into Islamist medievalism was ultimately a failure of its people: they were not left behind, but chose in their actions and inactions to go backward.

The examples of regional and national failures which he cites – like the failure of Colombia local governments to co-operate in carrying out dredging works which could have rectified a serious problem in the port city of Barranquilla – could have been complemented by additional case studies where democratically-elected political leaders engaged in self-destructive behaviour, and were not held to account by the electorate. Detroit springs to mind, but other examples exist.

Bottom-up solutions like Father José’s co-operatives can work. Top-down solutions – when advanced by visionary leaders like Singapore’s Lee Kuan Yew – can work. One fact remains though; national or regional communities have to want to save themselves in order to be saved. No amount of policy guidance can create that desire within them.