Learning objectives
a)Knowledge and understanding of: the functioning of markets in developing countries; externalities, increasing returns, coordination failures, and development policies; poverty, inequality, and population growth form normative, positive, and functional point of view; rural and urban structural interaction; globalization and gains from trade, trade policy for developing countries and the role of international institutions.
b) Ability to apply knowledge in order to: understand theoretical models, abstracting from a complex problem the main variables and analysing their interactions; read and understand empirical evidences emerging from tables, charts, and advanced statistic tools.
c)Ability to integrate knowledge and handle complexity, and formulate judgements in order to: understand the stage of economic and social development for a country and its relative performance; understand the effects of economic policies, and analysing sectoral dynamics from a functional point of view in an increasingly internationally open economic and social background.
d) Students will have the ability to address and support their arguments to economic agents as well as to non-specialist audiences, using a proper technical language, and making use of the experience gained by explaining data and analysing empirical evidence.
e) By means of the analysis of case studies through a logical problem solving, students will learn to understand and solve in a largely self-directed manner.
Prerequisites
Basic macroeconomics and microeconomics.
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 market failures and their interrelations. Furthermore, 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 an analysis of the key issues concerning globalization, by pointing out gains from trade, trade policy for developing countries, and their feedback on development and inequality.
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
Case Study: 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
Case Study: 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
Case Study: 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
Case Study: Three generations
Case Study: 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
Case Study: 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
Case Study: 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
Case Study: 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
Case Study: Operation Barga
Case Study: Land reforms: South Korea and Mexico
Chapter 13: Labor
13.1 Introduction
13.2 Labor categories
Case Study: 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?
Case Study: Formal lenders in Thailand
Case Study: Informal lenders in the Philippines
14.2.2 Some characteristics of rural credit markets
Chapter 15: Insurance
15.1 Basic concepts
Case Study: Self-insurance and bullocks
Case Study: 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
Case Study: Learning by doing
Case Study: 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
Case Study: 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
Case Study: A hot summer in Rio
17.4.3 Structural adjustment
Case Study: 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, examples and case studies.
Assessment methods and criteria
Knowledge and understanding, the ability to study and to think strict and clearly about a subject, will be assessed through two open-ended questions dealing with theoretical or empirical topics in broad terms, for up to 20 marks.
The application of knowledge and understanding through a logical problem solving, will be assessed through one open-ended question concerning an in-depth case study for up to 10 marks.
Overall time limit of the exam: 90 minutes.
Other information
Please check professor's webpage for updates on dates of exams, office hours and so on.
