HEC
School of Management
Spring
2008
DEVELOPMENT ECONOMICS:
theory, methods and case studies.
Course Material
Hand Outs
Problem set #3 will be due on Wednesday 6th (February). I will stay after the class on Monday (4th) if you have questions concerning Stata.
This
course will provide an overview of the main ideas in the economics of
development, both from a theoretical and a policy-oriented perspective.
The main objective of this course will be to provide the insights and
analytical framework that will allow students to understand the policy
debates surrounding the economic transformation of poor countries and
to develop their own theory-based thinking on issues related to
poverty. We will cover many topics affecting economic development: :
growth, income and inequality, industrial and fiscal policy,
institutions and governance, human capital, health, gender and the
family, risk and social protection, immigration and urban structure.
While studying each of these topics, we will ask if there is a scope
for policy (by government, international organizations, or NGOs), and
if so, which policies have been tried out. We will then present the
analytical tools needed to assess the success or failure of such
initiatives.
.
Syllabus
(word)
Course outline:
This class will focus on
three major aspects of development economics:
• Key issues in the developing world: growth, institutions, inequality, unemployment, education, health, social protection, migration, etc.
• Instruments of mediation: microcredit, safety nets, progressive taxation…
• Analytical tools and case studies: simple econometrics, game theory, impact evaluation.
Week 1: Poverty and inequality. A panorama.
Introduction to regressions.
1 - Poverty
2 - Origins of poverty
3 - Success stories
4 - Introduction to regressions and impact evaluation
Readings:
Sen, A. - Issues in the
Measurement of Poverty (1979)
World Development Report
2001/2 - Attacking Poverty - Chapter 2: Causes of Poverty and a
Framework for Action (2002)
Cohen, D. and M. Soto -
Why Are Poor Countries Poor? (2004)
Sachs,
J.D., A.D Mellinger and D.L. Gallup - The Geography of Poverty and
Wealth
Rodrik,
D., A. Subramanian, and F. Trebbi - Institutions Rule: the Primacy of
Institutions over Geography and Integration in Economic Development
(2002)
Acemoglu,
D., S. Johnson, and J.A. Robinson - The Colonial Origins of Comparative
Development: an Empirical Investigation (2000)
Week 2: Political Economy, institutions and democracy
Institutional change and economic performance: theory and evidence.
Institutionnal prerequisite for markets, formal and informal institutions, game theoretic approaches.
Logic of collective action, public and private provision of public goods, problems and solutions for externalities.
Social choice theory, individual preference aggregation, social welfare economics.
Democracy, development and growth.
Readings:
Engerman,
S.L., and K.L. Sokoloff - Factor Endowments, Institutions, and
Differential Path of Growth among New World Economies: A View
from
Historians of the United States (1994)
Hausman,
R., L. Pritchett and D. Rodrik - Growth Accelerations (2004)
Bernard,
A.B. - Trends and Transitions in the Long Run Growth of Nations (2001)
Mankiew,
N.G., Romer, D. and D. N. Weil - A Contribution to the Empirics of
Economic Growth (1990)
Case study: the political economy of oil
Week 3: Human capital and development: education, health, nutrition, demographics
Impact of education on growth, rationale of government's involvement, returns measurement.
Trends in population growth and causality with economic development.
Three topics about health: AIDS and its impact on African economies, impact of pollution, generic medicine: can everyone have access to medical treatment?
Fox,
M.P., et al.
- The Impact of HIV/AIDS on Labour Productivity in Kenya (2004)
Lanjouw,
J.O., and W. Jack - Trading Up: How Much Should Poor Countries Pay to
Support Pharmaceutical Innovation? (2004)
Kremer,
M., E. Miguel, and R. Thornton - Incentives to Learn: Merit Scholarships that Pay
Kids to Do Well (2007)
Week 4: The role of insitutions and geography
Big ideas in development.
Deep determinants of growth.
Week 5: Microeconomics of development: agriculture, land, labor, credit markets, migration
End of the rural world? Internal migration, urbanization, infrastructure and public service access.
Urbanization and immigration.
Challenges of environmental issues.
Case study: is immigration really so bad for receiving cities?
Week 6: Growth strategies and role of government: fiscal, industrial and labor policies
Growth diagnosis: theory and empirical evidence.
Taxation and economic efficiency: optimal income and commodity taxes, deadweight loss, behavioral response to taxation, tax incidence, fairness of tax systems.
Industrial policies: self-discovery and information asymmetries, coordination, public intervention targeting.
Labor markets and contracts.
Case study: growth diagnosis of Morocco (Country Economic Memorandum).
• Key issues in the developing world: growth, institutions, inequality, unemployment, education, health, social protection, migration, etc.
• Instruments of mediation: microcredit, safety nets, progressive taxation…
• Analytical tools and case studies: simple econometrics, game theory, impact evaluation.
Week 1: Poverty and inequality. A panorama.
Introduction to regressions.
1 - Poverty
2 - Origins of poverty
3 - Success stories
4 - Introduction to regressions and impact evaluation
Readings:
Sen, A. - Issues in the
Measurement of Poverty (1979) World Development Report
2001/2 - Attacking Poverty - Chapter 2: Causes of Poverty and a
Framework for Action (2002) Cohen, D. and M. Soto -
Why Are Poor Countries Poor? (2004)
Sachs,
J.D., A.D Mellinger and D.L. Gallup - The Geography of Poverty and
Wealth
Rodrik,
D., A. Subramanian, and F. Trebbi - Institutions Rule: the Primacy of
Institutions over Geography and Integration in Economic Development
(2002)
Acemoglu,
D., S. Johnson, and J.A. Robinson - The Colonial Origins of Comparative
Development: an Empirical Investigation (2000)Week 2: Political Economy, institutions and democracy
Institutional change and economic performance: theory and evidence.
Institutionnal prerequisite for markets, formal and informal institutions, game theoretic approaches.
Logic of collective action, public and private provision of public goods, problems and solutions for externalities.
Social choice theory, individual preference aggregation, social welfare economics.
Democracy, development and growth.
Readings:
Engerman,
S.L., and K.L. Sokoloff - Factor Endowments, Institutions, and
Differential Path of Growth among New World Economies: A View
from
Historians of the United States (1994)
Hausman,
R., L. Pritchett and D. Rodrik - Growth Accelerations (2004)
Bernard,
A.B. - Trends and Transitions in the Long Run Growth of Nations (2001)
Mankiew,
N.G., Romer, D. and D. N. Weil - A Contribution to the Empirics of
Economic Growth (1990)Case study: the political economy of oil
Week 3: Human capital and development: education, health, nutrition, demographics
Impact of education on growth, rationale of government's involvement, returns measurement.
Trends in population growth and causality with economic development.
Three topics about health: AIDS and its impact on African economies, impact of pollution, generic medicine: can everyone have access to medical treatment?
Fox,
M.P., et al.
- The Impact of HIV/AIDS on Labour Productivity in Kenya (2004)
Lanjouw,
J.O., and W. Jack - Trading Up: How Much Should Poor Countries Pay to
Support Pharmaceutical Innovation? (2004)
Kremer,
M., E. Miguel, and R. Thornton - Incentives to Learn: Merit Scholarships that Pay
Kids to Do Well (2007)Week 4: The role of insitutions and geography
Big ideas in development.
Deep determinants of growth.
Week 5: Microeconomics of development: agriculture, land, labor, credit markets, migration
End of the rural world? Internal migration, urbanization, infrastructure and public service access.
Urbanization and immigration.
Challenges of environmental issues.
Case study: is immigration really so bad for receiving cities?
Week 6: Growth strategies and role of government: fiscal, industrial and labor policies
Growth diagnosis: theory and empirical evidence.
Taxation and economic efficiency: optimal income and commodity taxes, deadweight loss, behavioral response to taxation, tax incidence, fairness of tax systems.
Industrial policies: self-discovery and information asymmetries, coordination, public intervention targeting.
Labor markets and contracts.
Case study: growth diagnosis of Morocco (Country Economic Memorandum).
Evaluation & Grading:
Two policy notes (to be handed in at the beginning of the second and fourth class).
Two quantitative case studies (to be handed in a the beginning of the third and fifth class).
One 10-minute oral presentation (date to be chosen during the first class).
No late homework will be accepted. If you can’t make it to the class, make sure you give your homework to one of your classmates.
Grading will be as follow: each of the 5 assignments will account for 15% of the final grade (that is 75% total). The final exam will be a two-hour exam, closed books and will account for 25% of the final grade.
.
Lecture:
Monday
January, 7th 1:30-4:30pm
NO CLASS ON JANUARY 14th
January, 21st 9:00am-12:00pm
January, 28th 1:30-4:30pm
February, 11th 1:30-4:30pm
February, 18th 1:30-4:30pm
.
Office Hours:
Céline: Monday, 4:30-6:00pm
Réda: Monday, 12:00-1:30pm
Downloadable
Documents:
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. Problem Sets:
Problem
Set 2 data
excel
variables
|
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Introduction
to Excel - Online
tutorial (Basic)