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Comment by Peter Burgess on November 12, 2012 at 12:22pm

Dear Colleagues

This is an excellent analysis of the problems facing the poor bottom billion in resource rich societies. I have worked in many of the countries he talks about ... rich resources, rich ministers, money poor people. The problem has been pretty clear for decades ... rich corporations buying extraction rights for pennies on the dollar, big money for the political elite and big profits for the corporates. 

The two words I was looking for in Professor Collier's talk were 'accounting' and 'accountability'. Accountancy is the tool that enables accountability and makes transparency useful ... accountancy is easy and way more powerful than 'top down' economic analysis. The only reason we do not have accountancy excellence is that both the 'North' which is home to the corporates and the 'South' where the rich ministers control everything of value do not want 'accountancy' and the powerful information that would arguably end the abuse.

There was a time when the word 'corruption' could not be used in any of the institutions engaged in official development assistance (ODA) ... it was the 'C-word'! Then it became OK to talk about corruption ... Transparency International became the 'go to' organization to learn about corruption. But the accountancy tool has remained sidelined. Modern double entry accountancy was invented more than 400 years ago to help keep track of the money invested in 'merchant adventuring' and it still works pretty well for keeping track of the money.

Professor Collier correctly identified the 'auction' or the market as being a good way to discover price or value ... another tool from early economics (Adam Smith Wealth of Nations 1776). But I would argue that the money profit laissez faire capitalist market that determines how resources get allocated needs to be updated. Today there is more surplus than shortage, and profit (self interest) only operates in the area of society where there is profit potential ... in other words it ignores the bottom billion. TrueValueMetrics is accounting not only for money profit but also social valueadd .... which is huge when economic activity reaches the bottom billion.

The Paul Collier talk was compelling ... even though it did not get to the accounting and valuadd possibilities!

Peter Burgess truevaluemetrics