Resource Traps In John Collier's The Bottom Billion

In his book, The Bottom Billion, Collier explores the reasons why poor countries fail to progress despite international aid and support. By his count, there are just fewer than 60 economies whose residents have experienced little, if any, income growth over the 1980s and 1990s. These countries are home to almost 1 billion people, who constitute this ‘Bottom Billion’. He contends that the Bottom Billion countries typically suffer from one or more, what he calls, “development traps” that hinder a country and governments ability to properly develop in unique and specific ways, and the goal of his work is to figure out a way around these traps. One such trap is the Resource Trap. I will examine the scholarship behind the Resource Trap and display how natural resources have the potential to be incredibly beneficial to a nations development or …show more content…
Referencing an occurrence in the Netherlands, where with the discovery of oil, the value of their currency rose in turn creating more expensive exports and less competitiveness in other economic sectors. Describing this phenomenon, Thomas Friedman explains, “The citizens, flush with cash, start importing like crazy, the domestic industrial sector gets wiped out and, presto, you have deindustrialization” (Friedman). While most industrialized countries can avoid this, developing nations such as Venezuela and Nigeria fall victim. What we see is that resource booms can skew employment distribution, leading to a decrease in the capabilities of other sectors. An empirical example of this would be a decline in post-secondary education in pursuit of work in the natural resource sector, which can have long-term negative effects on economic growth and a country’s level of human capital (Sachs and Warner). In all, booming natural resources create a sort of dependency some weaker nations where other vital economic arenas are never properly expanded on leading to long-term