Policy Innovations The central address for a fairer globalization

A publication of the Carnegie Council

Voluntary Standards and the Resource Curse

By Paul Collier

TED, August 26, 2008

In this TED talk, economist Paul Collier explains how the alliance of compassion and enlightened self-interest can help change the divergent course of the world's bottom billion poorest people. Lessons can be learned from the world's last great development success story: postwar Europe. A mixture of aid, open trade, security engagement, and mutual governance support defined that era.

Today, a recent cause for optimism in developing countries has been the boom in commodity prices and discoveries, but often these economic windfalls are accompanied by the resource curse: short-term growth across the board, but long-term impoverishment below initial levels.

Collier finds that democracy, ironically, has an adverse effect in such situations when the focus is on electoral competition alone, whereas a healthy system of democratic checks and balances can put a resource-rich country on the path to sustained prosperity. One innovation in this regard would be the promulgation of voluntary international standards such as the auctioning of extraction rights as opposed to their sale, which is often corrupted through bribery and sweetheart deals.

Collier concludes that only a critical mass of informed citizens in the developed world can override the mere gestures that rich-country governments make toward global development. The cost of spreading voluntary international standards is close to zero.