Economics 455W Prof. Alexander Karaivanov
Seminar in Economic
Development akaraiva@sfu.ca
Fall 2016 http://www.sfu.ca/~akaraiva
Office: WMX 3625 Office Hours: Wed 11.30-12.30 pm or by appointment
Course
Outline
Organization
The webpage for the course is:
http://www.sfu.ca/~akaraiva/e455.html
All course materials and announcements will be posted on the webpage in pdf or html format.
Grading
This is a writing-intensive, seminar-style course, thus active in-class
participation is strongly encouraged and rewarded. Your grade will be based on
your performance on a final exam as well as on six short ‘memos’ (comments), on the assigned
discussion papers (see below for more details). In addition, each student must
prepare a (powerpoint or similar) presentation of a
paper chosen from this syllabus and present it in front of the class.
Finally, a short term paper (approximately 12-15 double-spaced pages) due on
the last day of classes will also contribute towards your grade. The final
course grade is determined as follows:
- class participation and in-class presentation: 20% of the
final grade;
- six comments / memos on discussion papers (see list below) 15% of the final
grade;
- final exam: 35%
of the final grade;
- term paper: 30%
of the final grade;
Note: Barring exceptional
circumstances no make-up final exam will be permitted. If I have a reason to
believe that a student has cheated (this includes plagiarism) on any written
assignment, the final, or the term paper, I will give this student a grade
of F for the course. In addition, (s)he would be
subject to disciplinary punishment by the university.
Class readings
Journal articles and other reading material will be assigned for each
week of classes, as listed below. Internet links are provided. You are only required to read the starred (*) items on
the reading list and material from them might be included in the final exam.
All material covered in class, regardless of its source (articles, class notes,
text, presentations, etc.) can also be tested in some form on the final. The
remaining items on the reading list are only suggested readings aimed to deepen your understanding of the
material, to be chosen for the in-class presentation, or to serve as references
for your term paper. All internet links should be accessible from SFU computers
(including the SFU wireless network) but some may not be accessible from
off-campus.
The
textbook Development Economics by Debraj Ray,
Princeton University Press, 1998, (hereafter DE) provides a basic overview of most concepts which will be
covered and can be used as a supplement. However, it is not a required reading.
Taking class notes and participating in class discussions is completely
sufficient for obtaining an A or even A+ in the course.
Discussion papers and the six
memos
There will be a discussion paper assigned for each week of
classes (see a list with the paper names and calendar dates below). The
discussion papers are required reading. You should read them carefully
and prepare one or two questions with which to participate in the class
discussion.
You are also expected to write SIX, maximum half-page long,
memos/comments on six different discussion papers (you can pick any six during
the whole term). In a given week you can submit a comment only for the discussion paper assigned for that week. Comments on past discussion papers will receive a
failing grade. The comment for the current week
must be submitted by email to me by
To assist you, examples of good and bad memos and general
guidelines how to write them are posted on the course website.
Wednesday classes will be entirely dedicated to discussion. You are
expected to have read the weekly discussion paper and be able to talk about it
and comment on it in class. Participation in these class discussions forms part
of your course grade.
Course schedule
Each topic tentatively corresponds to one week of classes, but this
could change as time progresses. I will notify you of any changes. The most
recent version of the syllabus will be always available on the course website.
All internet links below should be accessible for free when accessed
from SFU. From home you may need to login with your SFU email ID and password.
Please let me know of non-working links!
1. Introduction: Concepts,
Methods and Measures of Economic Development
DE, chapter 2
Ray, D. (2000) “What’s
New in Development Economics?” manuscript,
Banerjee, A. (2008) “Big
answers for big questions: the presumption of growth policy”, MIT
Deaton, A. (2010) “Understanding the
Mechanisms of Economic Development”, J.
Econ. Perspectives
Hoff, K. and J. Stiglitz (2000), “Modern Economic
Theory and Development”, in Frontiers
of Development Economics: The Future in Perspective,
G. Meier and J. Stiglitz (eds),
Banerjee, A. and
Steckel, R. (2008), “Biological
Measures of the Standard of Living”, J. Econ. Perspectives
Di Tella and MacCulloch, (2006), “Some
Uses of Happiness Data in Economics”, J.
Econ. Perspectives
*Sep. 14 discussion: 1. Meier, G. (2005) “The New Development
Economics”, ch. 8 in “Biography of a subject: an evolution of
development economics,”
AND
2. Easterly, W. (2001), The Elusive Quest for Growth, MIT, prologue and pp. 8-15
2. Poverty and Development
DE, chapter 8
Ray, D. (2000) “What’s
New in Development Economics?”, manuscript, NYU,
(section 4, you can skip the math)
Banerjee, A. et al. (2010), “Targeting the Poor: Evidence from a
Field Experiment in Indonesia”, MIT (pp. 1-38)
Dollar, D. (2002), “Growth is Good for the
Poor”, World Bank
Chen, S. and M. Ravallion (2000), “How did the World’s
Poor Fare in the 1990s?”, World Bank
Ravallion,
M. and S. Chen (2005), China’s (Uneven) Progress Against Poverty, World Bank
research paper.
O Grada, C. (2007), “Making
Famine History”, Journal of Economic
Literature, March 2007.
Bourguignon, F. (2004), “The
Poverty-Growth-Inequality Triangle”, working paper, the World Bank
Besley,
T. and R. Burgess (2003), “Halving
Global Poverty”, J. Econ. Perspectives
Banerjee, A. and E. Duflo (2007), “Aging
and Death under a Dollar a Day”, working paper, MIT
Banerjee, A. and S. Mullainathan (2010), “The Shape of Temptation: Impications for the Economic Lives of the Poor”,
working paper, MIT
Banerjee, A. (2008), “Why Fighting Poverty is Hard”,
working paper, MIT
*Sep. 21 Discussion: Banerjee, A. and E. Duflo, “The Economic Lives of the Poor”,
working paper, MIT
3. Inequality and Development
DE, chapters 6, 7
Anand, S. and P. Segal, “What
Do We Know about Global Income Inequality?”, J.
Econ. Literature
Ravallion, M. (2001), “Growth,
Inequality and Poverty: Looking Beyond Averages”, World Development
Forbes, K. (2000). "A
Reassessment of the Relationship between Inequality and Growth", AER, 90(4).
Ghatak, M. and N. Jiang
(2002), “A Simple Model
of Inequality, Occupational Choice and Development”, JDE
Banerjee, A. and
Deaton, A. (2003), “Health,
Inequality and Economic Development”, Journal
of Economic Literature
Benjamin D., L. Brandt, and J. Giles, (2005), “The Evolution of Income Inequality in Rural China
”, EDCC, 53(4)
Benabou, R. (1996), “Inequality
and Growth”, NBER Macroeconomics
Annual
Milanovic, B. (2011), “More or
Less”, Finance and Development, Sep. 2011 (a
nice update on the discussion article about more recent trends in world
inequality).
Attanasio, O. and L. Pistaferri
(2016), “Consumption
Inequality”, J. Econ. Perspectives
Currie, J. and H. Schwandt
(2016), “Mortality
Inequality: The Good News From a Country-Level
Approach”, JEP
Piketty, T. (2015), “Putting
Distribution Back at the Center of Economics: Reflections on “Capital in the
Twenty-First Century””, J. Econ.
Perspectives
*Sep. 28 Discussion: Bourguignon and
Morrison (2002), “Inequality
Among World’s Citizens 1820-1992”, American Economic Review
4. Coordination Failure and
Multiple Equilibria
DE, pp. 131-154
Ray, D. (2000) “What’s
New in Development Economics?”, manuscript, NYU
(section 3)
Murphy, K., A. Schleifer and R. Vishny (1989), “Industrialization
and the Big Push”, Journal of
Political Economy
Rosenstein-Rodan, P. (1943), "Problems
of Industrialization of Eastern and South-Eastern Europe", Econ.
Journal
Easterly, W. (2006), “The Big Push
Déjà Vu”, Journal of
Economic Literature
Bandiera, O. and I. Rasul, (2003) "Social Networks
and Technology Adoption in Northern Mozambique", mimeo.
Hoff, K. (2000), "Beyond
Rosenstein-Rodan: The Modern Theory of
Underdevelopment Traps", Annual World Bank Conference on Development
Economics (pp. 1-39 only)
*Oct. 5 Discussion: Easterly, W. (2005), “Reliving the '50s: The
Big Push, Poverty Traps, and Takeoffs in Economic Development”, CGD WP 65/2005.
5. Agricultural Organization and Productivity – Theory, Evidence, and
Policy
DE, chapters 11, 12
Besley, T. and Burgess, R. (2000): “Land Reform,
Poverty and Growth: Evidence from India”, QJE.
Shaban, R.
(1987): “Testing between alternative models of sharecropping", Journal
of Political Economy
Huang J., K. Otsuka, and S. Rozelle,
“The Role of Agriculture in China's Economic Development”,
mimeo, 2005
Banerjee, A. and L. Iyer (2005), “History,
Institutions and Economic Performance: The Legacy of Colonial Land Tenure
Systems in India”, American Economic Review, Sep. 2005
Rozelle, S. and J. Swinnen (2004), “Success
and Failure of Reform: Insights from the Transition of Agriculture"
Tokarick, S. (2008), “Dispelling
Some Misconceptions about Agricultural Trade Liberalization”, JEP
*Oct.
12 Discussion: Lin, J. (1992), "Rural
reforms and agricultural growth in China" Amer. Econ. Review
6. Credit Markets in Developing Economies
DE, chapter 14
Ghosh, P., D. Mookherjee
and D. Ray (2000), “Credit
Rationing in Developing Countries: An Overview of the Theory”, ch. 11 in
Besley, T. (1995): "How
do Market Failures Justify Interventions in Rural Credit Markets",
World Bank
Banerjee, A. and E. Duflo (2008), “Do Firms Want to Borrow More? Testing
Credit Constraints Using a Directed Lending Program”, working paper, MIT
Townsend, R. (2004), “Credit Intermediation
and Poverty Reduction”, working paper
Banerjee, A. (2004), “Inequality and Investment”,
working paper, MIT
Banerjee, A. and B. Moll (2009), “Why Does Mis-allocation
Persist?”, working paper, MIT
7.
Risk and Insurance in Developing Economies
DE, chapter 15
Townsend, R. (1994), “Risk
and Insurance in Village India”, Econometrica
Townsend, R. (1995), “Financial
Systems in Northern Thai Villages”, Quarterly Journal of Economics
Jacoby, H. and E. Skoufias, (1998), “Testing
Theories of Consumption Behavior Using Information on Aggregate Shocks: Income
Seasonality and Rainfall in Rural India”, American Journal of Agricultural Economics, 80(1)
Udry, C., (1995) “Risk
and Savings in Northern Nigeria'', American
Economic Review
Karlan et al. (2010), “Crop Price
Indemnified Loans for Farmers: A Pilot Experiment in Rural Ghana”, WP
*Oct. 26 Discussion: Townsend,
R. (1995) "Consumption
Insurance: An Evaluation of Risk-Bearing Systems in Low-Income Economies",
J. Econ. Perspectives
8. Microfinance
Ahlin, C. and R. Townsend (2003): "Using
Repayment Data to Test Across Models of Joint
Liability Lending"
Burgess, R. and R. Pande, (2005), "Do
Rural Banks Matter? Evidence from the Indian Social Banking Experiment"
Morduch, J. (1998): "Does
Microfinance Really Help the Poor? New Evidence from Flagship Programs in
Bangladesh", working Paper, NYU
Morduch,
J. (1999) “The Microfinance Promise” J. Econ. Literature, 37(4)
Karlan,
D. (2005), "Social
Connections and Group Banking", mimeo,
Ananth, B., D. Karlan and
S. Mullainathan (2007), “Microentrepreneurs and
Their Money: Three Anomalies”
Banerjee, A. and
Cull et al. (2009), “Microfinance
meets the market”, J. Econ. Perspectives
Kaboski, J. and R. Townsend (2010), “A
Structural Evaluation of a Large-Scale Quasi-Experimental Microfinance
Initiative”, working paper, MIT
*Nov. 2 Discussion: Armendariz, B.
and J. Morduch (2004): “Microfinance:
Where Do We Stand?”, ch.
5 in Financial Development and Economic
Growth: Explaining the Links
9.
Field Experiments and Policy Evaluation
Gine, X. and D. Karlan
(2006), “Group vs.
Individual Liability: A Field Experiment in the Philippines”, mimeo
Duflo, E., P. Dupas and M.
Kremer (2006), “Peer Effects,
Teacher Incentives, and the Impact of Tracking: Evidence from a Randomized
Evaluation in Kenya”, working paper, MIT
Karlan, D. and M. Valdivia
(2011), “Teaching
Entrepreneurship: Impact of Business Training on Microfinance Clients and
Institutions,” Review of Economics and Statistics, 93(2)
Duflo, E. et al. (2010), “Improving Immunization Coverage in
Rural India: A Clustered Randomized Controlled Evaluation of Immunization
Campaigns with and without Incentives”, working paper, MIT
Crepon, B. et al. (2011), “Impact of Microcredit in Rural Areas
of Morocco: Evidence from a Randomized Evaluation”, working paper, MIT
Duflo, E., P. Dupas and M.
Kremer (2011), “Education, HIV and
Early Fertility: Experimental Evidence from Kenya”, working paper, MIT
Duflo, E. et al. (2010), “The Miracle of Microfinance: Evidence
from a Randomized Evaluation”, WP, MIT
Fafchamps, M. et al. (2010), “When is capital
enough to get female microenterprises growing? Evidence from a randomized
experiment in Ghana”, working paper
*Nov. 9 Discussion: Duflo, E.
and A. Banerjee (2008), “The Experimental Approach to Development”, working paper, MIT
10. Political Economy and
Institutions
Fernandez, R. and D. Rodrik (1991), “Resistance
to Reform: Status Quo Bias in the Presence of Individual-Specific
Uncertainty", American Economic Review
Bourguignon and Verdier (2000), “Oligarchy,
Democracy, Inequality, and Growth”, JDE
Alesina, A., and D. Rodrik (1994) "Distributive
Politics and Economic Growth", Quarterly Journal of Economics
Acemoglu, D. and J. Robinson (2000), "Political
Losers As a Barrier to Economic Development",
AER
Yang, D. and C. Fang (2000), The
Political Economy of China’s Rural-Urban Divide, working paper.
Faccio, M. (2006), “Politically
Connected Firms”, American Economic
Review, March 2006
Rodrik, D. and R. Wacziarg
(2005), “Do
Democratic Transitions Produce Bad Economic Outcomes?”,
AER, 95(2)
Persson, T. and G. Tabellini (2006), “Democracy
and Development: The Devil in the Details”, AER 96(2).
Roland, G. (2002), “The
Political Economy of Transition”, J. Econ.
Perspectives 16(1)
Besley, T. (2016), “Law, Regulation
and the Business Climate”, J. Econ.
Perspectives
Besley, T. and T. Persson (2014), “Why do Developing
Countries Tax so Little?”, J. Econ. Perspectives
*Nov. 16 Discussion: two
book reviews on “Why Nations Fail?” by Acemoglu and
Robinson
1. review by M. Boldrin,
D. Levine and S. Modica
2. review by J. Diamond
11.
Social capital, networks, culture
DE, pp. 155-159
Knack, S. and P. Keefer, (1997) “Does
Social Capital have an Economic Payoff? A Cross Country Investigation”
Nunn, N. (2010), “The
Slave Trade and the Origins of Mis-Trust in Africa”,
AER
Alesina, A. and E. La
Narayan, D. and L. Pritchett (1997) "Cents and Sociability:
Household Income and Social Capital in Rural Tanzania"
Guiso, L., P. Sapienza and L. Zingales
(2006), “Does
Culture Affect Economic Outcomes?” J.
Econ. Perspectives
Guiso, L., P. Sapienza and L. Zingales
(2004), “The
Role of Social Capital in Financial Development” AER
Greif, A. (1994), “Cultural
Beliefs and the Organization of Society: a historical and theoretical
reflection on collectivist and individualist societies”, Journal of Political Economy
Sobel, J. (2002), “Can We Trust Social
Capital?”, Journal
of Economic Literature
Munshi,
K. (2014), “Community
Networks and the Process of Development”, J. Econ. Perspectives
Voigtlander, N. & Voth, H.-J. (2013), “Gifts of Mars:
Warfare and Europe's Early Rise to Riches”, JEP
*Nov. 23 Discussion: Landes, D. (2006) “Why Europe and the West? Why
Not China?” J. Econ. Perspectives
12. International Issues: Trade, Globalization,
Foreign Aid
DE, chapter 18
Dollar, D. and A. Kraay
(2001), “Trade,
Growth and Poverty”, working paper, World Bank
Winters, L.,
Dollar, D. (2001), “Globalization,
Inequality and Poverty since 1980”, World Bank
Fischer, S. (2003), “Globalization and Its
Challenges”, American Economic Review
Burnside, C. and D. Dollar (2000), “Aid, Policies and
Growth”, World Bank
Easterly, W. (2006) “Planners
vs. Searchers in Foreign Aid”, Asian
Development Review
Banerjee A. and
R. He (2008), “Making Aid Work”, working paper, MIT
Easterly, W. (2003), “Can Foreign Aid Buy Growth?”, J.
Econ. Perspectives
Chong, A. and M.
Gradstein (2008), What Determines Foreign Aid? The Donors' Perspective , JDE
Bourguignon, F.
and M. Sundberg (2007), Aid Effectiveness: Opening the Black Box
, AER 97(2)
*Nov. 30 Discussion: Easterly and Pfutze
(2008), “Where
Does the Money Go? Best and Worst Practices in Foreign Aid”, J. Econ.
Perspectives (no need to read the
Appendix)
More papers on various other topics in
development that can be used for class presentations or as sources for your
term paper. These will not be covered in class.
I may add more papers to this list.
Alesina,
A. and E. La
Montalvo, J. and M. Reynal-Querol, Ethnic Polarization, Potential
Conflict and Civil Wars , AER
Abadie, A. (2006), Poverty, Political Freedom and the Roots of Terrorism ,
AER
Djankov, S. et al. (2006), Who Are China's Entrepreneurs? , AER
Canning, D. (2006), The Economics of HIV/AIDS in Low-Income Countries: The Case
for Prevention , JEP
Bosworth, B. and
S. Collins (2008), Accounting for Growth: Comparing China and India, JEP
Anderson, S.
(2007), The Economics of Dowry and Brideprice , JEP
Stromberg, D.
(2007), "Natural Disasters, Economic Development, and
Humanitarian Aid", , JEP
Duflo, E. et al.
(2009), “Marry for What? Caste and
Mate Selection in Modern India”, working paper, MIT
Duflo, E. and R. Chattopadhyay
(2004), “Women as Policy Makers:
Evidence from a Randomized Policy Experiment in India”, working paper, MIT
Banerjee et al. (2009), “Corruption”,
working paper, MIT
Aker,
J. and
Easterly, W. and Nyarko, Y. (2008), “Is the Brain Drain Good for Africa?”, working paper
Eichengreen,
B. and N. Woods (2016), “The IMF’s Unmet Challenges”, J. Econ. Perspectives
Ravallion,
M. (2016), “The
World Bank: Why It is Still Needed and Why It Still Disappoints”, J. Econ. Perspectives
Hallward-Driemeier, M. and L. Pritchett (2015), “How Business is
Done in the Developing World: Deals vs. Rules”, J. Econ. Perspectives
Jones, C. (2015), “Pareto and Piketty: The Macroeconomics of Top Income and Wealth
Inequality”, JEP
Karlan, D. (2005), “Using
Experimental Economics to Measure Social Capital and Predict Financial
Decisions”, AER
Marx, B., T. Stoker and T. Suri, (2013), “The Economics of
Slums in the Developing World”, J.Econ.Perspectives
Werker, E. and F. Ahmed (2008), “What Do
Nongovernmental Organizations Do?”, J. Economic
Perspectives