Paul Collier’s influential book – The Bottom Billion: Why the poorest countries are failing andwhat can be done about it – argues around 60 countries largely from Africa, Central Asia, and Asia(excluding India and China) are home to impoverished one billion poor in this known world whodiverge “from an increasingly sophisticated world economy, integration will become harder, noteasier” (2007: 4). How would BoP model fit in such economies is a fair question to ask.Furthermore, in addition to the above two alleged basic beliefs, there are more on the list. A few of them: among the bottom billion countries, one can also notice sheer absence of capabilities amonggovernments to facilitate business activities and also to rationally regulate such activities. Absentthe “fairly” “competent” “governments”, markets (formal economy) hardly thrive. Moreover, Nobellaureate Joseph Stiglitz, forcefully argues that markets are not efficient on its own, particularly therole of government is crucial and necessary:“At least since Adam Smith, most economists believed that competitive markets are efficient, andthat firms, in pursuing their own interests, enhance the public good ‘as if by an invisible hand.’ Amajor achievement of economic science during the first half of the twentieth century was findingthe precise sense in which that result is true. This result, known as Fundamental Theorem of Welfare Economics, provides a rigorous analytic basis for the presumption that competitive marketallocate resources efficiently. In the eighties economists made clear the hiddeninformation assumptions underlying that theorem. They showed that in a wide variety of situationswhere information is costly (indeed, almost always), government interventions could makeeveryone better off if government officials had the right incentives. At the very least these resultshave undermined the long-standing presumption that markets are necessarily efficient.… The older theory said that no government, no matter how well organized, could do better thanmarkets. If that was true, then we had little need to inquire into the nature of government.”BoP essentially piggybacks, solely, on market-based economic activity mechanism [i.e. approachingmarket as a stand-alone entity]. Thus, BoP assumes everything about the markets is working well.Put differently, given a well-functioning and monitored markets, BoP would be successful.However, this assumption itself will be a huge challenge. Another Nobel laureate Amartya Sen(2006: 136-138) cautions against such presumptions as “[m]arkets do not – and cannot – act alone.There is no ‘the market outcome’ irrespective of the conditions that govern the markets” (p. 137)which could be achieved by public policies to “supplement” market economy to promote theenabling conditions like, regulatory body, distribution of physical resources, human capitaldevelopment, social insurance, prevailing rules of business engagement, political & economicinstitutions and so on. Thus, sole focus on BoP would necessarily overlook such enabler conditionsneeded for a market economy. Atkinson (1995: 30) states that “lack of absolute capabilities” wouldalso “depend on the supply side of economics”; he further argues that high-quality products withlow price would reduce the number of people excluded, at the same time firms might not find it profitable “to supply poor households unless, for example, they are required to do so as part of regulatory process”. In this backdrop, the BoP model anchoring only on economy of volumes might be a challenge.To be fair, Prahalad (2004: 83-85) provides some factors that are essential for market economy,which he calls Transaction Governance Capacity (TGC) – its components are: laws to protect property, micro regulations, social norms, institutions for enforcements. However, all of it wouldonly provide a restrictive and ungenerous outlook on the enabler conditions needed for markets(when compared with what Sen and Stiglitz argue for, most vigorously and eloquently).And, crucially, BoP doesn’t talk about basic or formidable old-school arguments about theessentials needed in poverty reduction: universal literacy, education, employment, health,gender equality, and governance. Of course, Prahalad talks about health issues, but his examplesare restricted to providing minimal assistance for selective ailments that fallunder ophthalmology. Do only eye related selective ailments hinder humans? Health is
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