Critical Evaluation of Collier’s Proposed Agenda Regarding “Poverty Traps”

Generally speaking, poverty cannot be intrinsically viewed as a trap because there would be no possibility to combat it in such a case. Therefore, conflict and bad governance appear as specific poverty traps that impede development. The conflict trap reveals that 73 percent of people included in the poorest billion of the world’s population are either involved in or recovering from civil war. The actual fight against poverty demonstrates that civil war results in a vicious circle. The war practically causes poverty, while the decreased income leads to tensions. The development of a poor country causes a high level of unemployment leading to a great quantity of angry young people ready to fight. In addition, conflict leads to infrastructure destruction, deterring investors and thus resulting in even more limited opportunities. The creation of peace appears as the main contributor to ending poverty.

Paul Collier in his “Agenda for Action” vividly demonstrates that the conflict trap incorporates two points of intervention, including post-conflict and deep prevention. The author’s agenda encompasses aid, security, and charter promulgation. The first two instruments are vividly analyzed and depicted by the author, while the last, being the most important, is merely mentioned. Nevertheless, it is important to understand that for a post-conflict state to reach peace and flourish, it primarily requires the establishment of an adequate rule of law. As long as political institutions are unable to make credible commitments to negotiated settlements and uphold the constitutional law, the conflict cannot be solved, resulting in its repeating. The absence of an adequate rule of law actually minimizes possible positive outcomes of external aid and security. In regard to aid, Collier demonstrates that it should be provided over a decade rather than in a rush due to the fact that the crushing requirements of the early post-conflict period typically collide with the governmental incapacity. Therefore, the author notes that it is much better to provide the most basic services through the independent service authority model. For example, competing organizations might provide the services on the ground at the same time when the authority finances and scrutinizes their performance. Nevertheless, the aid instrument appears insufficient without reforming governmental policies and institutions as it can result in aid bureaucracy. In addition, Collier demonstrates that security is also highly important for post-conflict societies. They typically require an external military presence for an extended period of time. Therefore, both dispatching and receptor governments should anticipate this presence to continue, and they have to commit to this presence. Efficient external presence requires troops with the mandate to fight to preserve the peace as well as contributing governments willing to accept casualties. On the other hand, the post-conflict government should be required to reduce its own army drastically. The post-conflict government has to learn to operate through consent instead of oppression. For this reason, Collier vividly demonstrates that the provision of security is an essential condition for peace-building. Nevertheless, the fact remains that a successful political and governance transition must form the core of any post-conflict peace-building mission. The experience of Liberia and Haiti explicitly display that conflict cessation through security without the change of the political environment, even where state-building is undertaken through technical electoral help and institution creation or capacity building, appears unlikely to succeed. In regard to conflict prevention, Collier demonstrates that trade, aid, security, and charter promulgation are equally important as they appear synonymic to development. Nevertheless, aid appears as frequently co-opted by belligerent groups, which actually encourages the conflict. It has a potential or indirect contribution to the exacerbation of horizontal inequalities, leading to the probability of violence. Furthermore, prevention of the conflict requires normative and soft security dimensions. These actions are minor without appropriate rule of law as only it can equip a framework underlining the social intercourse between people and public authorities, ensuring that the country’s resources are channeled toward shared prosperity. The rule of law appears as the major contributing factor to the sustainability of development efforts, resulting in conflict prevention.

The second poverty trap regards bad governance. Such countries as Somalia, Haiti, Sudan, and Zimbabwe reveal that their governments do not function and benefit from their activities, making the state’s development impossible. Collier estimates that each failed state costs the global economy $100 billion, which are allocated in order to fix the failed state. Collier demonstrates that, first and foremost, governance and policies are supposed to face reforms and changes before the implementation of other instruments, including trade, aid, and security. Collier reveals that trade policy is viewed as premature in relation to law and institutional changes, while aid can lead to corruption intensification. Intelligent aid, in this case, requires substantial reorganization of technical assistance delivery. Nevertheless, the absence of appropriate governance and policies will merely lead to agencies’ resistance regarding the above-mentioned reorganization. Nevertheless, Collier does not mention that reforms should primarily incorporate the implementation of honesty and transparency in government functions and predictability of government behavior according to law, as he primarily focuses on corruption combating and the authoritarian nature of regimes change. Upholding the rule of law requires institutions for government accountability, while those institutions are missing. Therefore, the bad government should be primarily addressed through leadership, legislative, and institutional changes.

The G-20 (Leaders) Process

Starting from 2008, the G20 (Leaders) appears to be a major multilateral forum on the fundamental ground of its perceived effectiveness as a ‘crisis committee’ in managing the global economic and financial turmoil. On the one hand, the leader’s process might be regarded as suitable for effectively dealing with global economic policy issues. Firstly, it incorporates all the major economic players, representing two-thirds of the world’s population, 90 percent of global GDP, and 80 percent of world trade. Secondly, the encompassment of national heads of state in the negotiations could aid in the facilitation of commitments in key policy areas. Thirdly, due to the fact that the issues discussed by the leader’s process demonstrate a tendency to expand, the G-20 appears as capable of facilitating cooperation by enabling trade-offs among primary concerns, incorporating climate change and trade, which appear as impossible in issue-specific institutions and forums. This optimism is majorly grounded on the G-20’s successes at the height of the financial crisis as the leader’s process performed a unique, solid, and pivotal function in directing the recovery. Furthermore, the G-20 appears as the source of principal decisions concerning fiscal incentives, regulatory reforms, tripling the IMF’s lending capability, and other reaction attempts. In addition, the leader’s process appeared as capable of tasking other international organizations, including the World Bank, the Bank for International Settlements (BIS), and the Financial Stability Board (FSB), in regard to facilitation, control, or implementation of different facets of the response to the crisis. Finally, the G-20 is a crucial forum for major policy initiatives discussion across key countries, which definitely encourages a higher level of cooperation even despite the fact that the agreement on policies is not reached on a permanent basis.

Nevertheless, there are some facts revealing the possible ineffectiveness of the leader’s process. Firstly, the G-20 incorporates a highly diverse set of countries with discrepant political and economic philosophies. Therefore, since the economic recovery becomes more secure, the heterogeneous group with discrepant interests might face challenges and troubles while reaching agreements regarding global economic issues. For example, the G-20 has failed in providing adequate leadership in reacting to the Eurozone crisis. Secondly, the G-20 incorporates the appropriate mix of countries: the European states are over-represented, while some significant emerging-market countries, including Egypt, Pakistan, Thailand, etc., are excluded. This seriously challenges the possible cooperation concerning global economic issues. Thirdly, the G-20 might appear as ineffective since it does not have enforcement mechanisms beyond “naming and shaming.”

Therefore, it may be concluded that the leader’s process will be effective in some instances but not others. In fact, the G-20 could be an effective body during economic duress when countries view cooperation as critical, but less effective when the economy is strong and the need for cooperation appears less pressing. On the other hand, the G-20 might appear effective in facilitating cooperation over merely particular issue areas. It might be effective in coordinating monetary policy across the G-20 countries by equipping a formal structure for finance ministers, central bankers, and leaders to gather and discuss monetary policy issues.

Generally speaking, economic development issues have a tendency to transform into human development issues or policies. Despite the fact that the G20 might appear as effective in dealing with global economic policy issues, the leader’s process is currently not capable of effectively dealing with the related human development subject matter. Firstly, human development is missing theoretically and practically in the guiding principles of the G20 Working Group on Development. For example, women’s issues, which are a significant part of the economic challenges that the G20 should address, are totally neglected. In addition, despite the fact that comprehensive social development should appear at the core of the G20 agenda, the subject matter is lacking. Secondly, universal equity, as well as social and economic security in the global perspective, is also currently missing. Despite the fact that they should become key concerns of the G20 without diminishing respect for national development priorities and strategies, it would appear as challenging for the leader’s process to reach a consensus in a diverse set of countries with discrepant national and human development philosophies.

The leader’s process can actually become effective only after addressing key areas of utmost importance. Therefore, the G20 should assume overall responsibility for a coherent policy of development, including such key areas as trade access, infrastructure, agricultural development, tax policy, funding for education and human resources development, policies on commodity and food price volatility, and anti-corruption. The responsibility should appear as ten-point. Firstly, the G20 should start dealing with poverty reduction and human development as they are essential in underpinning security. Secondly, it should address aid issues in low-income countries. Thirdly, the financial issues of middle-income countries also appear as essential, requiring loans and technical cooperation. Fourthly, the G20 has to address fragile states, reviewing political, diplomatic, and military problems. In addition, development strategies should appear as country-specific, allowing countries to invest in their capability for growth, especially in the health and education combined with the business environment, which lowers transaction costs, support technical change, and encourages innovation. Moreover, successful development should be viewed through managed engagement in the global economy. Furthermore, developed and developing countries are supposed to work together to strengthen the international environment for development. Also, the G20 has to develop a new commitment to multilateralism. The leader’s process has to provide leadership and cooperation in the pursuit of development goals. Finally, the primary focus should shift to the support of effective, accountable, and representative global institutions.

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Therefore, the G20 is supposed to operate within the parameters of past engagement, simultaneously opening new issues for discussion and contributing to the reframing of the development agenda. Only this can make the G20 effective in dealing with numerous related human development problems and issues.