Development Economics - Syllabus.pdf

(1)

1

Professur für Volkswirtschaftslehre, insbesondere institutioneller Wandel Prof. Dr. Michael Rochlitz

SoSe 2019

Development Economics, Development Policy

and New Technologies

Syllabus

Course Location: WiWi2 F2340

Time: April 2nd_{– July 2}nd_{, 2019, Monday, 12:00 – 14:00} _{(no class on}

April 15th_{, April 22}nd_{, June 10}th₎

Office Hours: upon appointment, WiWi2, Max-von-Laue-Str. 1, Room F 2040 Contact: Tel. +49 (0)421218 66990, [email protected]

Homepage: https://sites.google.com/site/michaelrochlitz/

1. Content

The objective of the course is to introduce the main questions, theories and methods in the field of development economics, while also to critically question the conventional discourse in the discipline. After an overview of the great debates in the field, a number of classic and contemporary models, theories and strategies of economic development will be introduced. We will then focus on a number of specific topics more in detail, such as industrial policy, population growth, inequality, health and education, the environment, development aid, international trade, as well as the role of domestic and international financial markets.

(2)

2

2. Course Plan

1) Introduction (April 1st_{, 2019)}

2) Classic Theories and Models of Economic Development (April 8th_{, 2019)}

3) Contemporary Strategies of Economic Development: The Great Debate (April 29th_{, 2019)}

4) Industrial Policy and Catching-Up (May 6th_{, 2019)}

5) Population Growth (May 13th_{, 2019)}

6) Inequality (May 20th_{, 2019)}

7) Health (May 27th_{, 2019)}

8) Education (June 3rd_{, 2019)}

9) Economic Development and the Environment (June 17th_{, 2019)}

10) Development Aid (June 24th_{, 2019)}

11) Value Chains and International Trade (July 1st_{, 2019)}

12) International Financial Markets, Investment and Debt (July 8th_{, 2019)}

3. Key Readings

 Easterly W. (2001) The Elusive Quest for Growth: Economists’ Adventures and

Misadventures in the Tropics. MIT Press.

 Sachs J. (2005) The End of Poverty: How We Can Make it Happen in our Lifetime. Penguin

Books.

 Banerjee A., Duflo E. (2012) Poor Economics: A Radical Rethinking of the Way to Fight

Global Poverty. Public Affairs.

 Acemoglu D., Robinson J. (2013) Why Nations Fail: The Origins of Power, Prosperity and

Poverty. Profile Books.

(3)

3

4. Grading System

 1 presentation (25% of the final grade, presentation topics are individually distributed

from week to week)

 1 essay (25% of the final grade, to be handed in by May 31st_{, 2019; ca. 10 000 signs)}

 1 term paper (50% of the final grade, to be handed in by July 31st_{, 2019, ca. 30 000 signs)}

The essay and the term paper have to be send to me by email no later than the due date at midnight (as a pdf, name_essay.pdf, to [email protected]). For every day that the assignment is handed in late, you will get a reduction of 0.3 points of your grade. Please take care to register for the exam (“Portfolio”) until May 1st_{, 2019 at the latest on}_Pabo_.

5. Organization of the Seminars

Each seminar will start with an interactive lecture, introducing the main topic of the class. The lecture will be followed by one of the students individually presenting a research paper on the topic of the class. During the second half of the class, we will then discuss the presentation, as well as a number of additional research papers. Each class will end with a short summary of the main questions with respect to the specific topic, as well as a summary of the points we have learned.

6. Detailed Course Plan

1. Week (April 1st_{, 2019): Introduction}

 Easterly W. (2001) The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics. MIT Press.

 Sachs J. (2005) The End of Poverty: How We Can Make it Happen in our Lifetime. Penguin Books.

 Banerjee A., Duflo E. (2012) Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty. Public Affairs.

(4)

4

2. Week (April 8th_{, 2019): Classic Theories of Economic Development}

 Easterly W. (2001) The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics. MIT Press (chapters 3 & 4).

 Todaro M., Smith S. (2014) Economic Development. Pearson (chapters 3 & 4).

 Lewis A. (1954) “Economic Development with Unlimited Supplies of Labour”, The Manchester School, 22(2): 139-191.

 Solow R. (1956) “A Contribution to the Theory of Economic Growth”, Quarterly Journal of Economics, 70(1): 65-94.

 Rostow W. (1962) The Stages of Economic Growth. London: Cambridge University Press.

 Kremer M. (1993) “The O-Ring Theory of Economic Development”, The Quarterly Journal of Economics, 108(3): 551-575.

3. Week (April 29th, 2019): Contemporary Strategies of Economic Development: The Great Debate

 Sachs J. (2005) The End of Poverty: How We Can Make it Happen in our Lifetime. Penguin Books.

 Sachs J. (2009) Common Wealth: Economics for a Crowded Planet. Penguin Books.

 Easterly W. (2006) The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill And So Little Good. Oxford University Press.

 Moyo D. (2010) Dead Aid: Why Aid is not Working and How there is Another Way for Africa. Penguin Books.

 Acemoglu D., Robinson J. (2013) Why Nations Fail: The Origins of Power, Prosperity and

Poverty. Profile Books.

 Banerjee A., Duflo E. (2012) Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty. Public Affairs.

(5)

5

4. Week (May 6th, 2019): Industrial Policy and Catching-Up

 Khan M. (2000) “Rents, Efficiency and Growth”, in Rents, Rent-Seeking and Economic Development: Theory and Evidence in Asia, Cambridge: Cambridge University Press (chapter 1).

 Todaro M., Smith S. (2014) Economic Development. Pearson (chapter 12).

 Aghion P., Dewatripont M., Du L., Harrison A., Legros P. (2015) “Industrial Policy and Competition”, American Economic Journal: Macroeconomics, 7(4): 1-32.

 Chang H. (2003) Kicking Away the Ladder: Developmental Strategy in Historical Perspective. Anthem Press.

 Evans P. (1995) Embedded Autonomy: States and Industrial Transformation. Princeton University Press.

 Khan M. (1998) “Patron-Client Networks and the Economic Effects of Corruption in Asia”, European Journal of Development Research, 10(1): 15-39.

5. Week (May 13th, 2019): Population Growth

 Banerjee A., Duflo E. (2012) Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty. Public Affairs (chapter 5).

 Cameron L., Erkal N., Gangadharan L., Meng X. (2013) “Little Emperors: Behavioral Impacts of China's One-Child Policy”, Science, 339(6122): 953-957.

 Sachs J. (2009) Common Wealth: Economics for a Crowded Planet. Penguin Books.

 Kremer M. (1993) “Population Growth and Technological Change: One Million B.C. to 1990,” Quarterly Journal of Economics, 108(3): 681–716.

 Miller G. (2010) “Contraception as Development? New Evidence from Family Planning in Colombia,” Economic Journal, 120(545): 709–736.

(6)

6

6. Week (May 20th, 2019): Inequality

 Piketty T. (2014) Capital in the Twenty-First Century. Harvard University Press.

 Deaton A. (2003) “Health, Inequality, and Economic Development,” Journal of Economic Literature, 41(1): 113-158.

 Otis E. (2011) Markets and Bodies: Women, Service Work, and the Making of Inequality in China. Stanford University Press.

 Hong-Fincher L. (2016) Leftover Women: The Resurgence of Gender Inequality in China. Asian Arguments.

 Klasen S. (2002) “Low Schooling for Girls, Slower Growth for All? Cross‐Country Evidence on the Effect of Gender Inequality in Education on Economic Development,” World Bank Economic Review, 16(3): 345–373.

 Seguino S. (2000) “Gender Inequality and Economic Growth: A Cross-Country Analysis,” World Development, 28(7): 1211-1230.

7. Week (May 27th, 2019): Health

 Thaler R., Sunstein C. (2008) Nudge: Improving Decisions About Health, Wealth, and Happiness. Penguin Books.

 Bleakley H. (2010) “Malaria Eradication in the Americas: A Retrospective Analysis of Childhood Exposure,” American Economic Journal: Applied Economics, 2(2): 1–45.

 Banerjee A., Duflo E., Glennerster R., Kothari D. (2010) “Improving Immunisation Coverage in Rural India: Clustered Randomised Controlled Immunisation Campaigns With and Without Incentives,” British Medical Journal, 340: c2220.

(7)

7

8. Week (June 3rd, 2019): Education

 Duflo E., Dupas P., Kremer M. (2015) “School Governance, Teacher Incentives, and Pupil-Teacher Ratios: Experimental Evidence from Kenyan Primary Schools,” Journal of Public Economics, 123: 92-110.

 Miguel E., Kremer M. (2004) “Worms: Identifying Impacts on Education and Health in the Presence of Treatment Externalities,” Econometrica, 72(1): 159–217.

 Chaudhury N., Hammer J., Kremer M., Muralidharan K., Rogers H. (2006) “Missing in Action: Teacher and Health Worker Absence in Developing Countries,” Journal of Economic Perspectives, 20(1): 91–116.

 Schultz P. (2004) “School Subsidies for the Poor: Evaluating the Mexican Progresa Poverty Program,” Journal of Development Economics, 74(1): 199–250.

9. Week (June 17th, 2019): Economic Development and the Environment

 Collier P. (2010) The Plundered Planet: Why We Must – And How We Can – Manage Nature for Prosperity. Oxford University Press.

 Eaton S., Kostka G. (2014) “Authoritarian Environmentalism Undermined? Local Leaders’ Time Horizons and Environmental Policy Implementation in China”, The China Quarterly, 218: 359 – 380.

 Economy E. (2007) “The Great Leap Backward? The Costs of China's Environmental Crisis”, Foreign Affairs, 86(5): 38 – 59

 Wu et al. (2017) “Incentives and Outcomes: China’s Environmental Policy”, Capitalism and Society, 9(1): 1-41.

 Khan M., Zheng S. (2016) Blue Skies Over Beijing: Economic Growth and the Environment in China. Princeton University Press.

 Ma Jian (2014) The Dark Road. Penguin Books.

(8)

8

10. Week (June 24th, 2019): Development Aid

 Todaro M., Smith S. (2012) Economic Development. Pearson (chapters 1 – 4).

 Klitgaard R. (1990) Tropical Gangsters: One Man’s Experience with Development and Decadence in Deepest Africa. Basic Books.

 Bourguignon F., Sundberg M. (2007) “Aid Effectiveness: Opening the Black Box”, American Economic Review, 97(2): 316 – 321

 Djankov S., Montalvo J., Reynal-Querol M. (2008) “The Curse of Aid”, Journal of Economic Growth, 13: 169-194

 Easterly W. (2007) “Was Development Assistance a Mistake?”, The American Economic Review, 97(2): 328-332.

 Azam J., Thelen V. (2014) “The Geo-Politics of Foreign Aid and Transnational Terrorism,” Revue D’Économie du Développement, 22: 263 – 288.

 Moyo D. (2010) Dead Aid: Why Aid is not Working and How there is Another Way for Africa. Penguin Books.

11. Week (July 1st, 2019): Global Value Chains and International Trade

 Rodrik D. (2017) Straight Talk on Trade: Ideas for a Sane World Economy. Princeton University Press.

 Pascali L. (2017) “The Wind of Change: Maritime Technology, Trade, and Economic Development,” American Economic Review, 107(9): 2821-2854.

 Krueger A. (1997) “Trade Policy and Economic Development: How We Learn,” NBER Working Paper No. 5896.

 Giuliani E., Pietrobelli C., Rabelotti R. (2005) “Upgrading in Global Value Chains: Lessons from Latin American Clusters”, World Development, 33(4): 549-573.

(9)

9

12. Week (July 8th, 2019): Financial Markets, Investment and Debt

 Banerjee A., Duflo E. (2012) Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty. Public Affairs (chapters 6-9).

 Banerjee A., Glennester R., Kinnan C. (2015) “The Miracle of Microfinance? Evidence from a Randomized Evaluation”, American Economic Journal: Applied Economics, 7(1): 22-53.

 Levine R. (2005) “Finance and Growth: Theory and Evidence”, Handbook of Economic Growth, 1(A): 865-934.

 Todaro M., Smith S. (2014) Economic Development. Pearson (chapters 13 & 14).

 Asongu S. (2013) “How has Mobile Phone Penetration Stimulated Financial Development in Africa?”, Journal of African Business, 14(1): 7-18

 Besley T., Burchardi K., Ghatak M. (2012) “Incentives and the De Soto Effect”, The Quarterly Journal of Economics, 127(1): 237-282.

 De Soto H. (2000) The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else. Richmond: Black Swan.

 Greenwood J., Sanchez J., Wang C. (2013) “Quantifying the Impact of Financial Development on Economic Development”, Review of Economic Dynamics, 16(1): 194-215.

 Karlan D., Morduch J. (2010) “Access to Finance”, Handbook of Development Economics, 5: 4703-4784.