Learning objectives
The goal of this course is aimed at obtaining a solid background in Development Economics and also at obtaining the anlaytical tools to understand the facts and the determinants of globalization and further investigate its impact among countries.
Prerequisites
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Course unit content
This course explores some of the major topics in development economics,looking at both empirical and theoretical points of view. It begins by defining the concepts and measurement of development, then proceeds with a more detailed exploration of inequality, poverty, and population growth, pointing out their interconnections with economic development, and the possibility of uneven growth paths. To this end, in order to understand the structural transformation that accompanies the development process, rural-urban interaction and migration are explicitly introduced. It also looks at the markets and institutions that influence the lives of people in developing countries, stressing the role of markets failures and their interrelations. Before concluding, it goes back to aggregate analysis, dealing with the role of initial conditions for development. The course focuses on history versus expectations, analyzing the role of complementarities and increasing returns. Finally, it provides a detailed analysis of the key issues concerning international trade and trade policy.
Full programme
Detailed Syllabus
Chapter 2: Economic Development: Overview
2.1. Introduction
2.2.2 Historical experience
2.3 Income distribution in developing countries
2.4 The many faces of underdevelopment
2.4.1 Human development
2.4.2 An index of human development
2.4.3 Per capita income and human development
2.5 Some structural features
2.5.1 Demographic characteristics
2.5.2 Occupational and production structure
2.5.3 Rapid rural-urban migration
Chapter 5: History, Ecpectations, and Development
5.1 Introduction
5.2 Complementarities
5.2.1 Introduction: QWERTY
5.2.2 Coordination failure
5.2.3 Linkages and policy
Box: Heavy industry as a leading sector: early planning in India
5.2.4 History versus expectations
5.3 Increasing returns
5.3.1 Introduction
5.3.2 Increasing returns and entry into markets
5.5 Other roles for history
5.5.1 Social Norms
5.5.2 The status quo
Chapter 6: Economic Inequality
6.1 Introduction
6.2.2 Economic inequality: preliminary observations
6.3. Measuring economic inequality
6.3.1 Introduction
6.3.2 Four criteria for inequality measurement
6.3.3 The Lorenz curve
6.3.4 Complete measures of inequality
Chapter 7: Inequality and Development: Interconnections
7.1 Introduction
7.2 Inequality, income, and growth
7.2.1 The inverted-U hypothesis
Box: The tunnel effect
7.2.2 Testing the inverted-U hypothesis
7.2.3 Income and inequality: uneven and compensatory changes
7.2.6 Inequality and growth: evidence
7.2.8 Inequality, capital markets and development
7.2.9 Inequality and development: Human capital
Appendix: Multiple steady states with imperfect capital markets
Chapter 8: Poverty and Undernutrition
8.1 Introduction
8.2 Poverty : first principles
8.2.1 Conceptual issues
8.2.2 Poverty measures
8.3 Poverty: empirical observations
8.3.1 Demographic features
8.3.2 Rural and urban poverty
8.3.3 Assets
8.3.4 Nutrition
Box: Nutrition and income: a case study from South India
8.4 The functional impact of poverty
8.4.1 Poverty, credit, and insurance
Appendix: More on poverty measures
Chapter 9: Population Growth and Economic Development
9.1 Introduction
9.2 Population: some basic concepts
9.2.1 Birth and death rates
9.2.2 Age distributions
9.3 From economic development to population growth
9.3.1 The demographic transition
9.3.2 Historical trends in developed and developing countries
9.3.3 The adjustment of birth rates
Box: Three generations
Box: Women’s wages and fertility decline: a study of Sweden
9.4 From population growth to economic development
Chapter 10: Rural and Urban
10.1 Overview
10.1.1 The structural viewpoint
10.1.2 Formal and informal urban sectors
10.1.3 Agriculture
10.1.4 TheICRISAT villages
10.2 Rural-urban interaction
10.2.1 Two fundamental resource flows
10.2.2 The Lewis model
Box: Surplus labor: a natural experiment
10.3 Rural-urban migration
10.3.1 Introduction
10.3.2 The basic model
10.3.3 Floors on formal wages and the Harris-Todaro equilibrium
10.3.4 Government policy
10.3.5 Comments and extensions
Chapter 11: Markets in Agriculture: an Introduction
11.1 Introduction
11.2 Some examples
Box: Labor teams and tournaments in rural West Africa
11.3 Land, labor, capital, and credit
Chapter 12: Land
12.1 Introduction
12.2 Ownership and tenancy
12.3 Land rental contracts
12.3.1 Contractual forms
12.3.2 Contracts and incentives
Box: Is sharecropping associated with lower yields?
12.3.3 Risk, tenancy, and sharecropping
12.4 Land ownership
12.4.1 A brief history of land inequality
12.4.3 Land size and productivity: empirical evidence
12.4.5 Land reform
Box: Operation Barga
Box: Land reforms: South Korea and Mexico
Chapter 13: Labor
13.1 Introduction
13.2 Labor categories
Box: Labor markets in the ICRISAT villages
Chapter 14: Credit
14.1 Introduction
14.1.1 The limits to credit and insurance
14.1.2 Sources of demand for credit
14.2 Rural credit markets
14.2.1 Who provides rural credit?
Box: Formal lenders in Thailand
Box: Informal lenders in the Philippines
14.2.2 Some characteristics of rural credit markets
Chapter 15: Insurance
15.1 Basic concepts
Box: Self-insurance and bullocks
Box: Credit as insurance: a case study from Nothern Nigeria
Chapter 16: International trade
16.1 World trading patterns
16.2 Comparative advantage
16.3 Sources of comparative advantage
16.3.1 Technology
16.3.2 Factor endowments
16.3.3 Preferences
16.3.4 Economies of scale
16.4 Summary
Chapter 17: Trade policy
17.1 Gains from trade?
17.1.1 Overall gains and distributive effects
17.1.2 Overall losses from trade?
17.2 Trade policy: import substitution
17.2.1 Basic concepts
17.2.2 More detail
Box: Learning by doing
Box: Import substitution: Brazil
17.3 Export promotion
17.3.1 Basic concepts
17.3.2 Effect on the exchange rate
17.3.3 The instruments of export promotion: more detail
Box: Case study: ‘Outward orientation’ in South Korea
17.4 The move away from import substitution
17.4.1 Introduction
17.4.2 The eighties crisis
Box: A hot summer in Rio
17.4.3 Structural adjustment
Box: An example: Mexico in the 1980s
17.5 Summary
Bibliography
A selection of chapters from Debraj Ray, Development Economics, 1998,Princeton University Press. Further readings will be provided during the course.
Teaching methods
Lectures.
Assessment methods and criteria
The final exam is written. There are two questions, with similar weight, with a time limit of one hour.
One question deals with theoretical or empirical topics in broad terms, the other concerns an in-depth study labelled in the syllabus as box. Answers must be rigorous, pertinent and complete, because the aim is to show that a good understanding has been achieved.
Other information
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